Credit Suisse Group taps BNP Paribas bankers for India wealth push

 Credit Suisse Group hired nine private bankers from BNP Paribas to build its wealth management business in India and capture “booming demand” in a market dominated by local firms.

The Zurich-based bank recruited one managing director, two directors, three relationship managers and three assistant relationship managers to be based in Mumbai, Benjamin Cavalli, the South Asia private banking head, said in a statement on Tuesday.

“The Indian market has significant opportunities that both our investment banking and wealth management businesses can capture,” Cavalli said. The Swiss bank provides services ranging from financing, debt and capital market transactions, as well as trading, he said.

Credit Suisse is on a hiring spree in markets from China to Southeast Asia as it seeks to tap more business with rich Asians and boost revenue in the region. India’s total wealth has quadrupled since 2000 to $12.6 trillion last year, the bank estimates. Credit Suisse wants Asia to make up 25 per cent of group revenue in a couple of years, from 17.5 per cent now, Bloomberg reported in August.

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BNP exit

Ravinder Singh and Ravi Malani are among the new hires from BNP Paribas, which is the fifth-largest private bank in India, according to Asian Private Banker data. The French bank said in June that it plans to exit its onshore wealth management business in India.

Singh, a managing director and strategic client adviser for India onshore, led a team of 60 at BNP Paribas. Malani joins Credit Suisse as a director and senior product manager, while Brijesh Majali comes on board as director and team leader of relationship managers and their assistants who are also joining from BNP.

Credit Suisse has some catching up to do in the India wealth business. Although it’s the second-largest private bank in Asia excluding mainland China, it ranked 13th on assets managed for the rich in India, trailing local lenders such as Kotak Wealth Management, ICICI Bank Private Banking and IIFL Wealth, Asian Private Banker data show.

While BNP is leaving the India wealth market, some others are wanting in. Oversea-Chinese Banking’s private bank, Bank of Singapore, last year agreed to partner with Mumbai-based Edelweiss Group in a deal that allows locals to access the Singapore firm’s investment offerings. Cavalli is also expanding his team in Southeast Asia.

On Monday, he said he hired former HSBC Holdings veteran Bie Lan Oey to help drive its wealth business in the region.

BNP Paribas, Credit Suisse sound a note of caution on record market run

A slowing economy hasn’t stopped India’s benchmark equity index from climbing to a series of records this year, but this divergence may have run its course, according to BNP Paribas.

Asia’s third-biggest economy probably grew 4.6 per cent last quarter, which would be the slowest since the first three months of 2013, according to a Bloomberg survey ahead of Friday’s data release. Meanwhile, the Sensex closed at a new high on Wednesday and is up nearly 14 per cent for 2019. Stocks have climbed mainly since late September, when the unveiling of a corporate tax cut boosted the outlook for corporate earnings.

“Our recent meetings with policy makers and industry experts confirmed that there is unlikely to be a significant uptick in economic data in the near term,” Abhiram Eleswarapu, the firm’s Mumbai-based head of equity research, wrote in a note. “The index rally we had cautiously called for may be done for now.”

This view echoes that of Credit Suisse, which expects the growth slump to last longer than anticipated based on its interaction with investors. “With growth continuing to fall in October-November, it seems unlikely that FY20 would see any growth in EPS and FY21 should see meaningful cuts too,” it said in a report this week.

Investors are, however, unfazed by the economic slowdown. Net foreign buying in Indian stocks has reached $3.2 billion so far this month, set for the biggest tally since March, according to official data.