Barclays Plc's India private banking unit expects its business to expand by a third over the next three years as the British bank looks to capture a bigger share of the growing wealth in Asia's third-largest economy, said a top executive.
Barclays, which has about 130 employees in India's private banking business, also plans to raise the headcount by 20 percent to 25 percent in 2011, its India wealth unit Chief Executive Satya Bansal told Reuters in an interview.
Asia, home to more than 3 million millionaires, has become a battleground for private banks as global and Asian players compete for market share in a region that is fast outpacing the United States and Europe in economic growth.
"The market is quite buzzing with activity despite the fact that there are some headwinds in terms of the overall mood in the market," Bansal said.
"We are looking for a compounded annual growth rate of 30 percent to 35 percent in India for the next three years on a higher base," he said, referring to its assets under management in India.
Barclays launched its India private banking unit in late 2008, and has seen its business growing by more than 50 percent annually so far on a relatively smaller base, Bansal said. He declined to disclose the current assets under management.
Asset under management in the sector are poised to rise to $1.2 trillion by 2014 on the back of a fast-growing economy and rising incomes, up from $780 billion last year and $330 billion in 2008, according to a report by consultancy firm Celent.
Global banks such as Barclays, Credit Suisse and Standard Chartered and many local players are fast expanding their wealth management business in India, aiming to hire hundreds of bankers between them.
"It's a relatively small market but with a huge potential and its natural for the global wealth management firms to take a notice of this market for future growth of their business," said Bansal, who earlier worked for ICICI Bank's South East Asia private banking unit.
Wealth in India and China will increase at a compounded annual growth rate of 18 percent and 14 percent, respectively from end-2010 through 2015, faster than 5.9 percent growth in global wealth to about $162 trillion, according to a recent report by the Boston Consulting Group.
Private banks are hiring aggressively in India, which has 190,000 millionaire households - small compared to 5.2 million such households in the United States and 1.1 million in China - but it is one of the fastest growing markets in the world. However, unavailability of a large number of skilled bankers is a challenge for the sector, Bansal said.