Mehta will be an executive director at SG private banking, based in Mumbai, and will report to Singapore-based Balakrishnan Kunnambath, managing director and global market manager for the Indian sub-continent. Kunnambath was overseeing SG private banking in India in addition to his regional role and, with effect from June 16, Mehta will head the business for India. "In Asia, SG manages around $20 billion of private banking assets," says Kunnambath.
Mehta joins SG from Unitis Tower Wealth Advisors, where he was CEO. Unitis is a locally owned wealth management firm servicing high-net-worth-individuals, both resident in India and non-residents. Mehta moved to Unitis in March 2005 from Edelweiss.
SG forayed into private banking in Asia in 1998 and currently has five main booking centres on the continent: Hong Kong, Singapore Japan, India and China. It set up an onshore wealth management business in India in November 2005 and currently has offices in Mumbai and New Delhi with around 50 people devoted to the private banking business onshore.
The Merrill Lynch Cap Gemini Asia-Pacific Wealth Report 2007 concluded that India has the second-fastest-growing HNWI population in the Asia-Pacific after Singapore. The Wealth Report defines HNWIs as those with more than $1 billion in financial holdings (excluding their primary residence) and estimates the population of HNWIs grew by 20.5% in India over the previous year to a cumulative value of $352.7 billion.
Recent McKinsey research estimates that Indian households save 28% of their disposable income, which is a high savings rate by global standards. But Indians deploy only half of their savings in financial assets. The rest goes towards housing, funding machines required for small-scale businesses and into unproductive assets like gold. McKinsey suggests that bank deposits, equities, and bonds combined represent just 160% of GDP in India, compared with 220% in China and 420% in Japan.
Findings by the Wealth Report and McKinsey point to one thing: the wealth management business in India is set for exponential growth. Not surprisingly, international banks such as SG are expanding their private banking departments to cater to this. But competition is heating up, both from the global players and because a number of local players such as HDFC Bank, ICICI Bank and JM Financial are also enhancing focus on this market.
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