MUMBAI/DUBAI: 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 arm.
Sarasin Alpen had assets under management of around $100m, 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 $3bn and $4bn 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 sources said.
The sources declined to be named as they were not authorised to speak to the media.
Reuters
