Swiss Bank UBS AG To Close Its Commercial Banking, Wealth Management Operations In India
June 24, 2013 5:23 PM EST
Swiss bank UBS AG (NYSE:UBS) will be pulling out of the wealth management and commercial banking sectors in India, making it the second multinational bank in two months to end wealth management operations in India.
The Zurich, Switzerland-based UBS has started winding down its commercial banking and wealth management operations in India as part of its global strategy to shift focus to the company’s “core strengths” in its active markets, according to a Bloomberg report citing a person familiar with the matter.
The move will help the company to rationalize its overheads by exiting from a "capital intensive business" strategy to focus on businesses that require less capital worldwide, according to UBS's annual report.
However, a spokesman for UBS in Hong Kong, said the bank will continue its operations in its core areas, including in India, media reports said. "We'll continue with our core business of equities and investment banking," the Wall Street Journal reported.
In a similar move last month, Morgan Stanley (NYSE:MS), sold the Indian arm of its wealth management business, which contributed to less than 5 percent of the bank's revenues, to UK's Standard Chartered Plc. (LON:STAN), for an undisclosed amount.
The winding down of UBS's wealth management and commercial banking arms in India will be completed in two years, and will involve cutting 50 jobs, according to media reports that cited a person familiar with the matter.
UBS was given a scheduled bank status by the Reserve Bank of India in March 2009 and it started its commercial banking operations in 2010.
And though the bank holds a full-fledged banking license from the RBI, it had limited its commercial banking services mostly to large companies and wealthy individuals providing foreign exchange, fixed income services and commercial borrowings through its Mumbai-based branch.
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