Morgan Stanley set to sell India unit: report

Morgan Stanley has launched the sale of its India private wealth management unit, which manages about $1 billion including loans, Reuters reported citing sources with knowledge of the matter. The firm entered the highly fragmented and competitive Indian market just four years ago.

Wealth management platforms are usually sold for about 2 to 3 per cent of the assets under management, although the sources said it was not yet clear what price tag the unit could fetch, according to the report.

Morgan Stanley has initiated a strategic review of the division, a process that typically ends with a sale, sources said.

The review is part of the bank's efforts to withdraw from subscale wealth management operations globally, one of the sources said.

The sources declined to be named because the sale process is not public. A Morgan Stanley spokesman declined to comment, according to Reuters.

The bank's India unit sale underscores a growing trend of consolidation in Asia's wealth management industry as private banks struggle to earn profits due to rising regulatory costs and wafer-thin advisory fees.

India is a particularly difficult market for wealth managers as cut-throat competition, high staff costs, weak markets and limited product offerings have squeezed fee revenue.

Many foreign players had scrambled to open up shop in India a few years back to take advantage of robust economic growth, only to find themselves struggling, the report adds.