Swiss bank JB may start Indian ops, eyes acquisitions
May, 10th 2011
Swiss private bank Julius Baer is considering various options to start an onshore office to target rich clients in India and is not ruling out an acquisition to enter one of the world's hottest markets for millionaires.
"We are seriously contemplating to open an onshore entity in India," Thomas Meier, Julius Baer's chief executive for Asia and the West Asia and a member of the bank's executive board, told Reuters in an interview in Singapore.
He said the bank believes an onshore approach has become essential for key markets like India, where there is an increased demand for local financial products.
"You see a big flow of funds (going) back into India attracted by the phenomenal growth and this is likely to continue," Meier said.
In order to tap money going back into India as well as Indian domestic clients, the Swiss lender needed a proper licence to operate in India, he added.
Currently, Julius Baer has teams of private bankers in Singapore, Dubai and Zurich to handle rich non-resident Indians.
In Asia, it has large operations in Singapore and Hong Kong that cater to both domestic and offshore clients as well as an onshore presence in Jakarta for Indonesia's wealthy. Julius Baer has a representative office in China.
He said one of the options is to obtain a non-bank financial company's (NBFC) licence.
An NBFC licence allows an institution in India to engage in the business of loans and advances, acquisition of shares, stock, bonds, debentures and securities.
Meier said he would not exclude an acquisition in India, citing Julius Baer's recent purchase in Brazil of Sao Paolo-based GPS, the country's largest independent wealth manager.
Global players such as Credit Suisse, Standard Chartered, Barclays and many local players are aggressively expanding in India, aiming to hire hundreds of bankers between them to boost growth.
The number of US dollar millionaires in India and their collective wealth rose by more than 50% in 2009, according to Capgemini and Merrill Lynch. There were 126,700 millionaires in India at the end of 2009.
Only about a tenth of an estimated $477 billion worth of wealth held by Indian millionaires is managed by professional advisers, industry executives have said.
Julius's Meier said the bank is confident it can do well in India as it has built up a strong Asian business since 2006 despite cut-throat competition from rivals.
"My business is profitable," he said, but declined to give details. "Any business case in the end would like to turn (a) profit after three to four years and despite a rather difficult year in 2008, we managed to achieve what was expected from us."