UBS resets India strategy with 360 ONE deal

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.

In 2019, it signed a deal with Sumitomo Mitsui Trust in Japan to create a venture, majority-owned by UBS, expanding services for wealthy and ultra-wealthy clients. In March this year, UBS acquired full ownership of a securities joint venture in China where it serves wealth clients.

Under the UBS-360 ONE deal, clients from both firms will have access to onshore and offshore wealth management solutions, 360 ONE said.

360 ONE's ability to offer global wealth solutions to its Indian client base and offer domestic solutions to UBS' large global client base, especially institutional clients, is likely to give it a "significant edge over competitors", analysts at Citi said in a research note.

360 ONE provides investment and financial advice to more than 7,500 wealthy and ultra-wealthy families in India, with $68 billion in assets under management.

UBS also runs trading, global banking and asset management businesses in India and has several large service centres across the country.

($1 = 85.2000 Indian rupees)

(Reporting by Selena Li in Hong Kong, Hritam Mukherjee and Kashish Tandon in Bengaluru and Ira Dugal in Mumbai; Editing by Himani Sarkar and Edwina Gibbs)