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By Selena Li and Hritam Mukherjee
HONG KONG/BENGALURU (Reuters) - UBS said on Tuesday it would sell its Indian wealth business to 360 ONE WAM and take a stake of nearly 5%, worth some $220 million, in the Mumbai-based asset manager, adding that it might consider boosting its ownership.
360 ONE's shares shot up 7% in Mumbai afternoon trade.
The transaction underscores the Swiss bank's efforts to consolidate global business platforms and sharpen its focus in key markets amid regulatory concerns about its size since it took over Credit Suisse in 2023.
Bain-backed 360 ONE said in a statement it would buy most of the bank's wealth and asset management business in India - which had been largely Credit Suisse operations - for 3.07 billion rupees ($36 million). That includes the local stock broking and distribution business, discretionary and non-discretionary portfolio management services business and residual loan portfolio.
UBS will, however, take over serving 360 ONE's clients in Singapore, subject to regulatory approvals. The companies will also explore opportunities for collaboration on asset management products and investment banking services.
Despite the increasing number of wealthy individuals in India, one of the world's fastest-growing economies, foreign private banks have struggled to boost revenues in the country due to stiff competition with deeply entrenched local players and regulatory limitations, leading many to exit the market.
Jin Yee Young, co-head of UBS global wealth management APAC, told Reuters in an interview that the deal brings together "complementary" elements that the two firms have.
She said that UBS, which plans to acquire warrants for a 4.95% stake in 360 ONE - worth about 19 billion rupees ($223 million) as of Monday's close - could boost that holding but did not elaborate.
Going forward, UBS India's operations will be focused on investment banking and equity capital markets, Mickey Doshi, who heads UBS India and joined the firm from Credit Suisse, said in the same interview.
The fixed-income business, which Credit Suisse was active in prior to the merger, is no longer a focus, he said.
Doshi did not say whether UBS will give up the local banking licence required for the fixed-income business. UBS in 2013 gave up an Indian banking licence but acquired a fresh one after taking over Credit Suisse.
UBS shares dipped 0.7% in Zurich morning trade.
ASIA WEALTH PARTNERSHIPS
UBS' wealth partnership model in India contrasts with its efforts to expand in other Asian wealth markets in recent years.