UBS to raise India investment bank staff

MUMBAI (Reuters) - UBS will nearly double its investment banking staff in India to up to 180 in the next year as it prepares to offer more services and retain its share of the increasingly competitive business, the head of UBS in India said.

UBS (UBSN.VX) tops the merger and advisory table so far this year, up from seventh spot last year, data from Thomson Financial showed, leapfrogging rivals including Morgan Stanley (MS.N), Citigroup (C.N), JPMorgan (JPM.N) and Merrill Lynch MER.N.

"Our challenge and our desire is to remain among the top three investment banks in India," Manisha Girotra, managing director and chairperson for UBS India, told the Reuters India Investment Summit on Thursday.

"It's becoming a very competitive market, with big investment banks all hiring people and going after the same market share. So it's hard to keep your share ... it's like being on a treadmill and the incline gets steeper," she said.

UBS ranks seventh this year in Indian equity capital raising, according to Dealogic, and competition among investment banks was fierce, with low fees and many deals crowded with several underwriters, Girotra said.

"You just have to do a lot of deals to make your bread," she said, adding that M&A advisory still offered good money.

The competition extended to staffing. Hiring and retention of talent were the biggest challenges, Girotra said, and took up 30-40 percent of her time.

UBS, which employs about 1,600 people in India now, will increase its broking and investment banking team in India from 100 now, Girotra said, and add 1,000 people to its offshoring facility that services its U.S. and European operations.

STAGGERING WEALTH

Indian companies have announced $22.3 billion worth of outbound acquisitions this year, Thomson Financial data show, approaching last year's record $24 billion.

UBS has advised on deals including Vodafone's (VOD.L) purchase of Hutchison Whampoa's (0013.HK) controlling stake in an Indian mobile services firm for $11 billion and Hindalco's (HALC.BO) $6 billion buy of Canada's Novelis.

A global credit crunch has not curbed the appetite of Indian firms aiming for a more global profile, said Girotra, who earlier headed the investment bank arm of Barclays (BARC.L) in India.

Instead, there may be a greater number of smaller deals and a change in the way that deals are financed, she said.

"It obviously can't continue the way it has ... the kind of targets and the kind of financing may be restricted," she said.

"What we will see is an increased number of smaller deals, and activity across the spectrum, not just large companies."

UBS, the world's largest wealth manager, is also awaiting regulatory approval to offer additional services including fixed income, wealth management and high-end retail banking in India.

Globally, UBS has had a turbulent year. It closed Dillon Read Capital Management in May and in October announced its first group quarterly loss in five years. But it has said its wealth management business was poised for strong growth.

India's benchmark share index .BSESN has risen nearly six times since the start of 2003 on the back of robust economic growth that averaged 8.6 percent over the past four fiscal years, creating wealth and catapulting firms onto the global stage.

The number of millionaires in India rose by nearly 21 percent to more than 100,000 in 2006, the Merrill Lynch/Capgemini wealth report showed, and foreign banks have been ramping up private banking operations to tap a market valued at about $600 billion.

"The amount of wealth you see accumulating is staggering. We can't wait to get started," Girotra said.

(Additional reporting Tony Munroe; Editing by John Mair)