Wealth Management in India 2007

Published by: Datamonitor

Published: Oct. 10, 2007 - 45 Pages

Table of Contents

Overview

Catalyst

Summary

Executive Summary

India's economy is booming, which has resulted in onshore savings and investments balances increasing strongly

India's wealthy population represents a very attractive market for onshore wealth managers

Table of Contents

Table of figures

Table of tables

Chapter 2 Market overview

Introduction

Economic conditions in India have been favorable, with further room for growth

Historic GDP growth levels have been strong

Services accounted for 53% of the country's economic growth

But the country remains poor

And average wages are low - one reason for its popularity as an outsourcing hub

As a result, India's onshore liquid asset market has boomed

The majority of Indian retail savings and investments are in deposits

Indian direct equity balances increased strongly

After declines in 2004-05, mutual fund balances recovered in 2006

Retail bond balances increased most significantly

Indian investment tastes are relatively simple, but growing in sophistication

The majority of Indian savings are held in deposits

Indians are shifting their attention towards equity investments

Offshore investments by resident Indians is restricted

But Non-Resident Indians are an important customer group for onshore providers

However, the regulatory environment is hindering potential growth

Foreign players remain restricted in their acquisitions of Indian banks

The Reserve Bank has tight ownership rules for Indian banks

Foreign bank regulation to be eased in the future

Restrictions on portfolio management

Despite a slowdown in 2004, the Indian affluent population and their onshore liquid assets grew strongly

There were around 1.2 million wealthy individuals in India in 2006

Wealthy individuals in India held USD294 billion in onshore liquid assets in 2006

2008-9 will be characterized by struggling economies worldwide

Rising interest rates, excessive borrowing and negative savings rates have combined in a perfect storm that will upend most of the world's economies

The widespread securitization of loans will compound this problem

And the US economy is not healthy enough to 'expand' itself out of this market

Foreign direct investment may also boost the economy, however foreign investors are pulling money out of the US markets

A continued Treasury sell-off may further depress the dollar and force interest rate hikes ...

Another major terrorist attack in the US would destabilize the economy further

Market capitalization will fall worldwide as US stock markets continue their jitters

India's wealthy population represents a very attractive market for onshore wealth managers

There will be around 2 million wealthy individuals living in India by 2011

Wealthy individuals in India will hold over USD510 billion in onshore liquid assets by 2011

Data

CHAPTER 2 Competitive Dynamics

Introduction

Competitive interest is intensifying

There have been many entries into India's wealth management space by foreign players in the last few years

But the local banking and investment companies are well-established

Public sector banks hold 72% of deposits

State Bank of India is the largest bank based on total deposits

Punjab National Bank

Canara Bank

ICICI Bank

HDFC Bank

Wealth Management operations

ABN AMRO

Citibank

HDFC Bank

HSBC

ICICI Bank

Standard Chartered Bank

APPENDIX

Definitions

Aggregate

CAGR

High net worth (HNW)

Liquid assets

Liquid asset bands

Mass affluent

Mass market

Non-Resident Indian (NRI)

Retail

Methodology

Global wealth Model

The UK sub model

Global sub model (for all other countries)

Forecasting methodology

Continuous refinement to the understanding of liquid wealth distribution

Datamonitor's wealth numbers compared with other wealth numbers

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Indian annual GDP growth, 2000-2001 to 2006-2007

Table 2: Contribution to GDP by Industry sector, December 2006

Table 3: Chinese and Indian GDP per capita, Purchasing Power Parity in USD, 1996-2005

Table 4: Indian onshore retail liquid asset balances in USDm, 2002-06

Table 5: Indian onshore retail liquid asset balances in INRm, 2002-06

Table 6: Market capitalization of the Bombay Stock Exchange, 2002-2006

Table 7: NRI deposit inflow of commercial banks in India in USDm, year-end March 2002-06

Table 8: Number of wealthy individuals segmented by liquid asset band, 2002-06

Table 9: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2002-6

Table 10: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2007-11

Table 11: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2007-11

List of Figures

Figure 1: India's GDP growth has averaged 8.8% over the last 7 years

Figure 2: Major components of Indian GDP, December 2006

Figure 3: India onshore retail savings and investments balances in USDbn, 2002-06

Figure 4: The market capitalization of the Bombay Stock Exchange increased 58% compounded annually, 2002-06

Figure 5: The NRI Deposit market is valuable and growing fast

Figure 6: Wealthy individuals declined slightly in 2004 but recovered by 2006

Figure 7: Onshore liquid assets of wealthy individuals in India have grown strongly

Figure 8: The number of wealthy individuals in India is expected to grow 10.5% compound annually from 2007 to 2011.

Figure 9: Aggregate onshore liquid assets of wealthy Indians will grow 11.0% compound annually from 2007-2011

Figure 10: State Bank of India controlled 23% of the banking market in 2005-06

Abstract

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