Introduction
This report looks at the size and composition of the wealth market in India, analyzing the
opportunities that exist for regional and local players and providing the best strategies for entry.
Competitive dynamics and customer tendencies are analysed, including an insight into the offshore
nature of investors in these markets.
Scope of this report
- Macroeconomic and savings and investment data collected directly from governmental sources such
as the Reserve Bank of India
- Insight into the Indian financial services market obtained through in-depth interviews with the
main wealth managers and private bankers
- Sizing and forecasting of mass affluent and high net worth individuals generated from
Datamonitors proprietary Global Wealth Model
Research and analysis highlights
India is both attracting foreign wealth managers to set up business and domestic banks to set up
wealth management businesses. Going forward this is a trend that is likely to continue, with Indias
key advantages attracting more and more competitors.
The attractiveness of Mumbai as a location for banks is backed up by the figures on deposits held
by foreign banks in India. Of the total value of deposits held by foreign banks USD16bn 49.2% is in
Maharashtra and all of this is in urban/metropolitan areas of which Mumbai is a large part.
In the view of many in the industry there is a challenge of client education that must be
addressed going forward. The primary area of concern is in equity investment and the need to invest
long-term rather than short-term. This is not a problem that is confined to India, many other
countries around the globe have similar problems.
Key reasons to read this report
- This report forecasts the market to 2008, allowing you to plan strategies on the basis of
detailed market information
- Allows wealth managers to monitor threats and opportunities posed by their main competition
- Helps plan products and services by giving key information on customers financial services
preferences
CHAPTER 1 EXECUTIVE SUMMARY
Introduction
What is this report about?
Who is the target reader?
Macroeconomic Background
Population and GDP
Economic growth is strong, but GDP per capita remains low
Interest rates
FDI
Retail savings and investments
Regional wealth
Affluent individuals
Customer profile
Offshore tendency
Restrictions on offshore investment
Though there is some money flowing offshore
Non-resident Indians (NRIs)
Affluent individuals and their assets
Financial services
The stock market
Banking structure
The players
Onshore Private Banking and wealth management
Wealth management is at an immature stage in India
Private sector retail banks dominate wealth management
Products and services are relatively simplistic
Future outlook
Customer outlook
Wealth market outlook
Domestic banks scale advantages are highly important in an unaware and immature market...
...but international competitors have greater product and service capabilities
Foreign competitors investment management propositions are more sophisticated
Indias advantages will continue to attract wealth managers
CHAPTER 2 INTRODUCTION
What is this report about?
Who is the target reader?
How to use this report
Report Methodology
CHAPTER 3 INDIA
Introduction and macroeconomic background
Population and GDP
Indias population is large and - for the most part - poor
Economic growth is strong, but GDP per capita remains low
Interest rates
FDI
Retail Savings & Investments
Regional wealth
Affluent individuals
Customer profile
Offshore tendency
Restrictions on offshore investment
Return on investment
Though there is some money flowing offshore
Non-resident Indians (NRIs)
Affluent individuals and their assets
Mass affluent
High net worth
Financial services
Liberalization of rules surrounding foreign entry
Regulations prohibit foreign majority ownership
Domestic banks are in need of capital
Changes in ownership rules are just part of a broad range of regulatory changes
The stock market
Banking structure
Local players
Foreign entrants
Onshore private banking and wealth management
Wealth management is at an immature stage in India
Private sector retail banks dominate wealth management
Products and services are relatively simplistic
Competition is clustered around the mass affluent customer segment with few true private banking
services availiable
Restrictions on portfolio management
The competitors
ABN AMRO
Deutsche Bank
HSBC
HDFC Bank
ICICI Bank
Future outlook
Customer outlook
Mass affluent segment
High net worth segment
Wealth market outlook
Domestic banks scale advantages are highly important in an unaware and immature market...
...but international competitors have greater product and service capabilities
Foreign competitors investment management propositions are more sophisticated
Product manufacturing expertise is needed, and being utilized in India
Indias advantages will continue to attract wealth managers
Data
CHAPTER 4 APPENDIX
Definitions
AAGR
CAGR
Gini index
Liquid assets
Liquid asset bands
Research methodology
The Global Wealth Model
The UK sub model
Asia-Pacific sub model
Forecasting methodology
Datamonitors wealth numbers compared with others numbers
Bespoke Wealth Market Sizing
Further reading
Datamonitor Asia-Pacific Wealth Reports
Datamonitor Asia-Pacific Insight Reports
Datamonitor Global Wealth Service: Competitor Tracking
Datamonitor Financial Services Consulting
Asia-Pacific contacts
List of Tables
- Table 1: Total deposits and credit outstanding by banking group, September 2004
- Table 2: Datamonitors wealth market coverage
- Table 3: Deposits held by population at all commercial banks split by state of branch, September
2004
- Table 4: Total deposits and credit outstanding by banking group, September 2004
- Table 5: Major wealth managers within India, 2004
- Table 6: Comparison of domestic and foreign competitors private banking product and service
range, 2004
- Table 7: GDP and S&I growth over the 1998-2003 period
- Table 8: Indian retail liquid assets, 1998-2003
- Table 9: NRI deposits by type, 1999-2003
- Table 10: Number of Indian mass affluent individuals, 1998-2003
- Table 11: Liquid assets of Indian mass affluent individuals, 1998-2003
- Table 12: Number of Indian high net worth individuals, 1998-2003
- Table 13: Liquid assets of Indian high net worth individuals, 1998-2003
- Table 14: Forecasted retail liquid assets, 2003-2008
- Table 15: Forecasted number of Indian mass affluent individuals, 2003-2008
- Table 16: Forecasted liquid assets of Indian mass affluent individuals, 2003-2008
- Table 17: Forecasted number of Indian high net worth individuals, 2003-2008
- Table 18: Forecasted liquid assets of Indian high net worth individuals, 2003-2008
- Table 19: Wealth markets that have been modeled using the Global Wealth Model
List of Figures
- Figure 1: Savings and investment assets in India have exhibited strong growth over the last five
years
- Figure 2: The liquid wealth of mass affluent individuals in India grew at a rate of 17.2% CAGR
over the 1998-2003 period
- Figure 3: Positioning of key wealth mangers according to broad customer segment and product
range, 2003
- Figure 4: Those individuals with more than USD150,000 will own approximately 50% of total retail
liquid wealth in 2008
- Figure 5: Methodology diagram and report structure
- Figure 6: Major components of Indian GDP, %, 2003
- Figure 7: Indias bank rate has been reduced by the Reserve Bank in recent years in an attempt
to stimulate investment
- Figure 8: Savings and investment assets in India have exhibited strong growth over the last five
years
- Figure 9: Deposits remain the primary investment vehicle but are decreasing in importance among
Indian investors
- Figure 10: The market for NRI deposits is valuable and growing fast
- Figure 11: The liquid wealth of mass affluent individuals in India grew at a rate of 17.2% CAGR
over the 1998-2003 period
- Figure 12: The number of Indian HNW individuals in the USD3M+ liquid asset band grew by 20.6%
AAGR over the 1998-2003 period
- Figure 13: Positioning of key wealth mangers according to wealth of customer segment and breadth
of product range, 2004
- Figure 14: Those individuals with more than USD150,000 will own approximately 50% of total
retail liquid wealth in 2008
- Figure 15: The mass affluent population will grow at a rate of 10.4% over the 2003-2008 period
- Figure 16: There will be 45,300 more high net worth individuals in India in 2008 than in 2003
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