MUMBAI/DUBAI Oct 4 J. Safra Sarasin Group, a
Swiss private bank, is shutting its Indian joint venture after
it was unable to build significant scale in a competitive market
hit by slowing economic growth, sources with direct knowledge of
the matter said.
India remains a difficult market for global wealth managers,
who were drawn by its longer-term prospects only to find
revenues being squeezed by cut-throat competition, high staff
costs and subdued markets.
Opportunities for growth in India have also been limited by
regulations that restrict product offerings, as well as by what
some analysts believe to be the concealment of billions of
dollars of personal wealth from tax officials.
Sarasin Alpen, a joint venture between J. Safra Sarasin and
Dubai-based Alpen Capital, is in the process of leaving India
nearly three years after setting up operations in Asia's
third-largest economy, the sources said.
Its exit takes place within months of Morgan Stanley's
sale of its India wealth management arm to Standard
Chartered Plc, while Societe Generale,
France's No. 2 listed bank, is selling its Asia private banking
Sarasin Alpen had assets under management of around $100
million, according to the sources, two of whom have direct
knowledge of the matter. By comparison, large wealth managers in
India such as Standard Chartered and Bank of America Merrill
Lynch each manage assets worth between $3 billion and $4
billion or more.
Assets of the venture, which one of the sources said had
roughly 20 staff in its India unit, will be handed back to
clients, or in some cases the relationship manager will move
with his client assets to another private bank, one of the
The sources declined to be named as they were not authorised
to speak to the media. A spokesman for J. Safra Sarasin in
Basel, Switzerland, declined to comment. A spokeswoman for Alpen
Capital referred a Reuters query to J. Safra Sarasin.
J. Safra Sarasin's decision to shut the Indian joint
venture, which also offers wealth management services in some
countries in the Middle East, was also a result of its renewed
focus on core markets in Europe, one of the sources told
India, whose economy is growing at its slowest pace in a
decade, had 164,000 millionaire households last year, down from
190,000 in 2010, according to the Boston Consulting Group's
global wealth report.
(Editing by Tony Munroe and David Holmes)