India private banking: A princely sum
Liechtenstein royalty target India’s wealthy.
Until recently, you could count the number of successful international private banks in India on your two thumbs. Sometimes on one.
Morgan Stanley and UBS both exited onshore wealth management. Last year, Euromoney revealed Citi was cutting its losses, part of a plan to get out of 13 Asian and EMEA markets.
The direction of travel seemed clear. India was too expensive for foreign lenders bruised by cut-throat competition, razor-thin pricing and the cost of serving a narrow and scattered set of high-net-worth families.
Or was it? HSBC scrapped its onshore wealth management business in 2015. But in July, its India chief executive Hitendra Dave unveiled plans to return within 12 months, bearing a full suite of private wealth products. It aims to cater to wealthy non-resident Indians, which it serves out of London, Dubai and Singapore.
Now it’s the turn of LGT to get in on the act.
Owned by the Princely House of Liechtenstein, a wealthy European micro-state whose chief exports include sausage skins and false teeth, the firm said on October 21 it would offer “comprehensive” wealth management via its local arm, LGT Wealth India.
It’s not a sudden move. In 2019, Validus Wealth, a provider with 200 staff in 14 cities including Mumbai and Delhi founded by former DSP Merrill Lynch banker Atul Singh, underwent a business transfer agreement with LGT.
LGT chairman Prince Max von und zu Liechtenstein said the firm aimed to be a top-three private client business “in the next five years”.
Rivals gave the announcement a cautious thumbs-up. “They’re placing themselves in the global corridor, which is good positioning,” said a veteran private banker. “But the space is crowded and LGT has no brand recall in India, so they will find it difficult.”
Good luck, Prince Max. You’re going to need it.