Morgan Stanley to start India wealth business

Morgan Stanley to start India wealth business

By Reuters

Singapore: Morgan Stanley plans to launch private wealth management services in India next year, its first onshore wealth business in Asia, and expects to hire around 100 private bankers, an executive said on 8 October.

“That will be our first buildout on an onshore private wealth business in Asia," said Leslie Menkes, a Singapore-based managing director for the Wall Street bank’s private wealth management arm, while speaking at the Reuters Wealth Management Summit.

The bank expected it would be managing around $1 billion (Rs3,943 crore) in private banking assets in India at the end of three years, he said.

Morgan would be competing against Citigroup and Merrill Lynch as the three U.S. banks aggressively try to tap India’s fast-growing private banking market. India had 100,000 millionaires in 2006, up 21% from a year earlier, according to a Merril Lynch/Capgemini report.

Merrill said in March it plans to expand to cover at least 10 Indian cities in the next three years, from five cities now. A senior Citigroup executive told Reuters in February that the bank plans to double the number of bankers dealing with wealthy non-resident and resident Indians from about 100, by the end of 2008.

Citi’s Smith Barney broking unit, which handles clients with assets of at least $1 million, plans to grow from one office now to a presence in 12 Indian cities.

Menkes said Morgan Stanley’s focus in India would be mainly on the rupee-based business targeting wealthy clients who have $5 million in assets or 40% of India’s 100,000 millionaires. Internationally it targets clients who have $25 million in assets.

“We will open for business in the middle of next year. We will certainly open in Mumbai, Delhi and Calcutta and probably in Bangalore," he said, adding by the end of 2010 it wants to be in eight locations in India.

Menkes said the bank already has hired four senior executives from Merrill Lynch to setup the private banking business. He said that the Indian onshore operation would be followed by the launch of a similar business in China.

Menkes, who is head of the private banking unit that covers Southeast Asia, Australia/New Zealand and India, said that its Asian private wealth business has seen over 50% growth this year, led by China, Hong Kong and Taiwan.

He said that the bank’s Asian private banking assets were expected to grow by about 50% this year from around $25 billion at the end of 2006.