Demand for wealth management is growing

Updated: Jul 31 2006, 05:47am hrs
UBS AG of Switzerland, worlds largest wealth manager with $170 billion invested in assets and is one of the worlds top five global investment bankers which has decided to set up its India Service Centre (ISC) in Hyderabad. With an investment of $50 million, ISC wouldl provide UBS businesses with knowledge services, including research and analytics, BPO, including transaction and data processing and IT infrastructure support.

In Hyderabad for the official inauguration of the ISC, Clive Standish, group chief financial officer and member, group executive board, spoke to FEs Satya Naagesh Ayyagary, with the typical bankers caution on the global and Indian capital market. Excerpts.

How do you view and explain the recent meltdown in the Indian stock market

Looking at the context in which it has happened, it is an unbelievable growth and performance. For instance, inflation rates have been going up, and so are interest rates in the western markets.

So, volatility has come back in the emerging markets. One has to understand that markets do not keep going up all the time. If that were the case, we would all be somewhere else.

So, you would say the correction was a consequence of the chain of events and it was natural

Well, it is not an unhealthy correction. It is OK. In fact, the correction was needed so as to create a healthier base.

There is a lot happening in the global equity markets with a lot of cross-border capital and funds moving around. How do you see the equity markets globally and where does India figure in that

In the equity markets, the appetite for emerging markets with an above average GDP growth is quite strong. Moreover, a lot of cash is going around looking for investment and the medium and long term outlook is good. However, short-term volatility will always be there. As far as FIIs are concerned, global funds do move around. It is true that foreign investors push the market up.

But when there is a squeeze, the exit gets narrower. One should remember that people have short memories.

Whats your outlook for the Indian market

I think it is coming of age. And it will become significant in the next few years.

Is it true that you have applied for a bank branch licence in India Also, will you be looking at retail commercial banking in India

It is true that we have applied for a bank branch licence. But we do commercial banking at the retail level only in Switzerland. It is unlikely that we will deviate from that path. Also, we decided not to have a JV partner.

Whats your focus in the Indian market

Our global focus is on wealth management individual and private and we are the worlds largest wealth manager. Then we focus on asset management and investment banking. Our growth driver is of a one firm approach.

Further, the demand for wealth management in India is growing strongly in India and we would like to participate in that. In fact, we have a longstanding relationship with India with operations in Mumbai and now in Hyderabad. Also, we are one of the top two FII brokers in India.

Where does the India Service Centre (ISC) fit in UBS scheme of things

In fact, the ISC in Hyderabad is part of our organic growth plan. It is the most significant of UBS offshoring initiatives.

This is representative of our continuing determination to provide our businesses with a flexible and efficient infrastructure. In addition, by matching the global revenue base with a diversified global cost base, concentration risks are reduced.