UBS bites the dust in India

Just like all the other big banks.

"Another one bites the dust". UBS is the latest in line of big western banks to be exiting the Indian wealth management industry. UBS will also be winding down its foreign exchange business in India as part of its global strategy to conserve capital.

A UBS spokesperson told Private Banker International that, over a span of two years, the Swiss banking giant will shut its single branch in Mumbai and "concentrate on its core businesses" rather than on capital intensive businesses, even though it is keeping its corporate client service division (including M&A, equities and debt capital market services) intact in the country.

Quite recently, Morgan Stanley surrendered its wealth management unit in India by selling it to Standard Chartered. Previously, Goldman Sachs also exited India’s wealth management arena. 

What makes India such a difficult market to survive in for foreign players?

Like most countries across the globe – now more than ever – regulation is a key concern, one that is amplified when it comes to India. With high entry barriers and a wing-clipped approach to the product universe, the Reserve Bank of India only keeps tightening controls.

This year, in the annual monetary policy statement on May 3, the RBI proposed a new banking structure involving differentiated licencing regime for domestic and foreign banks instead of granting a universal banking licence.

Beyond regulation, however, a bigger factor may be the fact that nuances around how the wealth management business, particularly, works in India is actually quite local.

A market like India has a number of things going for it. According to the World Wealth Report 2013, released by Capgemini and RBC Wealth Management, India experienced 22.2 per cent growth in its HNIs population, second only to Hong Kong in the Asia Pacific region.

But the key to understanding and thriving in a market like India is to have a deep rooted view of the local sentiment and clients’ trust that local banks have.

Indian family offices have a bigger trump card having handled key rich families’ wealth over generations, but the trust factor that local private sector banks such as ICICI, HDFC, Axis Bank, Kotak Mahindra Bank, to name a few, have achieved is tough to compete with. And they are catching up with global best practices fast.

Another factor that gives local banks an edge, perhaps, is the fact that India is a completely onshore market, everything being rupee denominated, and the investment products on offer are still relatively basic, unlike Western mature markets.

When I spoke to Atul Singh, managing director and head of global wealth and investment management for Merrill Lynch in India, back in 2011 for a feature, he told me that foreign banks such as Merrill Lynch, Barclays, JP Morgan, Citibank, and Credit Suisse, being experienced players globally, have taken the lead in developing innovative products targeting the HNWI and UHNWI. But the challenge in India, as an industry, is "how to make money from assets" due to the product universe still being fairly vanilla.

It’s not just India that is difficult to deal with, though. Russia is even more notorious for western bank exits, with Barclays and HSBC quitting retail and commercial banking operations in the region over the last couple of years. Reason? Local banks’ dominance, with most of the market share taken by Russia’s largest lender by assets, Sberbank, followed by VTB.

French bank Societe Generale’s Russian subsidiary, Rosbank, has been in the limelight for the wrong reasons recently with its CEO, Vladimir Golubkov, being fired and acquitted on bribery charges. But SocGen, being one of the few foreign banks still holding its ground in the statedominated banking sector, has shown optimism with its chief executive, Frederic Oudea, saying the lender aims to deliver a "sustainable return on equity of over 15 per cent" in Russia by 2015. Let’s see.

As for India, it will be interesting to note how local banks up their ante with another Western lender exiting, mould themselves to further regulatory changes, and how the other remaining foreign banks make space for themselves and the global approach they offer. "Pressure on people - people on streets". Queen really has said it all.

Photograph: Getty Images

Meghna Mukerjee is a reporter at Retail Banker International

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Rarely has it mattered so little if Manchester United won; rarely has it been so special they did

Team's Europa League victory offers chance for sorely needed celebration of a city's spirit.

Carlo Ancelotti, the Bayern Munich manager, memorably once said that football is “the most important of the least important things”, but he was only partly right. While it is absolutely the case that a bunch of people chasing around a field is insignificant, a bunch of people chasing around a field is not really what football is about.

At a football match can you set aside the strictures that govern real life and freely scream, shout and cuddle strangers. Football tracks life with such unfailing omnipresence, garnishing the mundane with regular doses of drama and suspense; football is amazing, and even when it isn’t there’s always the possibility that it’s about to be.

Football bestows primal paroxysms of intense, transcendent ecstasy, shared both with people who mean everything and people who mean nothing. Football carves out time for people it's important to see and delivers people it becomes important to see. Football is a structure with folklore, mythology, language and symbols; being part of football is being part of something big, special, and eternal. Football is the best thing in the world when things go well, and still the best thing in the world when they don’t. There is nothing remotely like it. Nothing.

Football is about community and identity, friends and family; football is about expression and abandon, laughter and song; football is about love and pride. Football is about all the beauty in the world.

And the world is a beautiful place, even though it doesn’t always seem that way – now especially. But in the horror of terror we’ve seen amazing kindness, uplifting unity and awesome dignity which is the absolute point of everything.

In Stockholm last night, 50,000 or so people gathered for a football match, trying to find a way of celebrating all of these things. Around town before the game the atmosphere was not as boisterous as usual, but in the ground the old conviction gradually returned. The PA played Bob Marley’s Three Little Birds, an Ajax staple with lyrics not entirely appropriate: there is plenty about which to worry, and for some every little thing is never going to be alright.

But somehow the sentiment felt right and the Mancunian contingent joined in with gusto, following it up with “We’ll never die,” – a song of defiance born from the ashes of the Munich air disaster and generally aired at the end of games, often when defeat is imminent. Last night it was needed from the outset, though this time its final line – “we’ll keep the red flag flying high, coz Man United will never die" – was not about a football team but a city, a spirit, and a way of life. 

Over the course of the night, every burst of song and even the minute's silence chorused with that theme: “Manchester, Manchester, Manchester”; “Manchester la la la”; “Oh Manchester is wonderful”. Sparse and simple words, layered and complex meanings.

The match itself was a curious affair. Rarely has it mattered so little whether or not United won; rarely has it been so special that they did. Manchester United do not represent or appeal to everyone in Manchester but they epitomise a similar brilliance to Manchester, brilliance which they take to the world. Brilliance like youthfulness, toughness, swagger and zest; brilliance which has been to the fore these last three days, despite it all.

Last night they drew upon their most prosaic aspects, outfighting and outrunning a willing but callow opponent to win the only trophy to have eluded them. They did not make things better, but they did bring happiness and positivity at a time when happiness and positivity needed to be brought; football is not “the most important of the least important things,” it is the least important of the most important things.

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