Singapore Banks Target India’s Ultra-Rich Amid Wealth Boom

As India’s millionaire population surges, Singapore’s banks are stepping up efforts to capture a slice of the booming wealth management market. The city-state’s favorable regulatory landscape and tax advantages make it an attractive destination for India’s ultra-high-net-worth individuals (UHNWIs).

A report by HSBC Global Research, titled “The Rise of Asian Wealth,” projects that by the end of this decade, India will surpass Southeast Asian nations in the number of millionaires. This growth is driven by India’s robust economic expansion and a friendlier regulatory environment, contrasting with China’s slowdown and increasingly complex regulations.

“With this tremendous growth, private banks in Asia are expanding their teams to increase coverage of this important market,” said Tommy Leung, head of global private banking, South Asia, at HSBC.

Singapore, known for its stable financial center and long-term wealth preservation, has become a magnet for India’s UHNWIs. The city-state offers significant tax incentives for setting up family offices, which require a private banking account with a Singapore-licensed institution. Compared to India’s capital gains tax of up to 25%, Singapore imposes no such tax.

The shift in wealth is also reflected in the rising number of Indian family offices in Singapore and Dubai. Rajesh Mahadevan, head of global south Asia and Africa at Deutsche Bank, noted a “visible migration” of UHNW clients from India to these financial hubs.

Meanwhile, China’s economic challenges have slowed the growth of its high-net-worth population. “The regulatory environment in China has become increasingly complex, making it more challenging for foreign financial institutions to operate smoothly,” said Kevin Teng, CEO of Singapore-based wealth management firm Wrise.

As Indian investors increasingly look to park their wealth back home, non-resident Indians (NRIs) have played a significant role, sending around $125 billion back to India in 2023 alone. The exceptional performance of Indian capital markets has bolstered this trend.

To capitalize on this global flow of funds, banks like HSBC, Citi, Deutsche Bank, and DBS Bank are leveraging their international networks. Vikas Jaidka of DBS Private Bank highlighted the growing demand for personalized, cross-border wealth management solutions among NRI clients, who are also increasingly relying on digital platforms for round-the-clock portfolio management.

Source: The Banker