Swiss bank UBS shuts down Indian branch, to surrender licence
22 Jun 2013
Swiss bank UBS AG has decided to close its banking unit in India. It will surrender its Indian banking license and close its banking unit, covering fixed income, foreign exchange operations and credit services which are capital intensive.
The bank has already closed its only branch in India, which is in Mumbai. It is planning to surrender its banking licence to the Reserve Bank of India next week, according to widespread reports which, however, the bank has so far refused to confirm.
However, UBS will continue its corporate client service business, which includes mergers and acquisitions, equities and debt capital market services.
UBS has been largely focussing on the wealth management business, covering foreign exchange, fixed income and credit services.
The move to surrender the banking licence surprised many, as UBS had named Nitin Jain its new India head for fixed income, currencies and commodities business only nine months back, in September 2012.
''The appointment underlines the continuing importance of India as key fixed-income, currencies and commodities market for UBS in the region,'' the Swiss bank had said in a statement at the time.
Reportedly, UBS is frustrated after years of attempting to enter the retail banking business in the country have come to nought in the face of government regulations.
The bank's profitability in India has been under stress in the past few years. Its profit per employee in the country almost halved to Rs54.8 lakh in 2011-12, from Rs1.09 crore the previous year. Return on assets also narrowed to 0.48 per cent from 1.63 per cent during this period.
In 2011-12, UBS' India net profit fell 47 per cent to Rs31 crore. It incurred losses in treasury bank and wealth management businesses.
