Barclays India wealth unit sees assets rising

Barclays India wealth unit sees assets rising

Mumbai: The Indian wealth management unit of Britain’s Barclays expects its business to expand 25% annually for at least three to five years as it taps into the country’s growing rich, a top official said.

Barclays started its Indian private banking operations last November and has more than 100 staff in five large cities, including Mumbai and Delhi, catering to individuals with at least $1 million in investable surplus.

“We are likely to increase our staff by another 15-18% this year, both on the coverage side and support side," Satya Bansal, chief executive of the Indian wealth unit, told Reuters in an interview.

He did not disclose assets under advisement but Robert Morrice, chairman of Barclays in Asia Pacific, told a Reuters summit in Tokyo in July the Indian wealth unit was on target to have more than $1 billion in assets by the end of 2009.

“We would be expecting a growth rate of 25% per annum," Bansal said.

The London-listed firm, which reported an 8% jump in half-year profits on Monday, is boosting its Asia presence at a time when rivals such as Citi, Bank of America-Merrill Lynch, Royal Bank of Scotland and UBS are trimming their operation.

Consultant Celent forecasts Indian wealth industry to manage about $1 trillion worth of assets by 2012, an opportunity that has attracted the likes of Morgan Stanley, Societe Generale and Credit Suisse.

Bansal estimates major wealth managers tapping clients with at least $1 million will be collectively managing about $20 billion, while the opportunity was worth at least $100 billion even now, leaving plenty of scope for new players like Barclays.

“We are in a business build-up mode and the best time to build the business is when chips are down because that’s when the right talent is available," Mumbai-based Bansal said, adding he had hired some senior bankers from outside India.

“Global talent heading back home is a blessing for us," he said.

The world’s rich lost a fifth of their wealth in 2008 and their number fell 15% as the financial crisis wiped out two years of growth, according to a Merrill Lynch-Capgemini report. Their wealth dropped below 2005 levels to $32.8 trillion.

The number of rich in India fell by nearly a third to 84,000 in 2008, the fastest drop in the world after Hong Kong, as a 52% fall in Indian shares hurt the net worth of individuals.

However, risk appetite has improved now and cash in client portfolios are down, in some cases by as much as 50%, Bansal said.

Risk control is gaining favour and the rich were now more willing to seek organised and professional help, expanding opportunities for private banks in India, he said.

Bansal, whose firm also competes with local players such as JM Financial and Kotak Mahindra Bank, said a vast pool of wealthy individuals remained untapped by private banks and the main opportunity was in expanding the market.

“A large amount of opportunity lies not with the competition but expanding the market," said Bansal, who earlier worked for ICICI Bank’s South East Asia private banking unit.