Financial investment--Targeting Non-Resident Indians in Wealth Management Industry2005-2006

CHAPTER 1 INTRODUCTION 8

What is this report about? 8
Who is the target reader? 8

CHAPTER 2 THE MARKET OPPORTUNITY 9

A brief history of Indian migration 10

There are three key reasons why financial instiitutions should consider targeting the NRI population 11

They have differentiated needs 12
Remittance services 12
Offshore investment 14
Other expatriate needs 16

NRI populations around the globe are large 22
The Middle East is attracting Indian workers in their millions 23
North America offers skilled work in banking and tech sectors 24
Europe and the UK in particular have been long-time destinations for Indians 25
Indian-born populations in Asia-Pacific are sizeable too 27

There are significant proportions of wealthy individuals among their number 29
Overseas Indians tend to have higher average income than local residents 29
The number of wealthy Indians around the world 31

CHAPTER 3 COMPETITIVE DYNAMICS 34

There are four ways in which financial institutions are targeting NRIs around the globe 34

Leveraging existing customer bases 34
The Indian banks all look to leverage their existing customer bases 34

Partnerships between foreign and Indian firms 35
Lloyds TSB and ICICI spotted an opportunity in the UK market 35
Indian bank Indusind is looking to tie up with several overseas banks in an effort to target NRIs 37

Targeted wealth management products and services 37
SG Private Bank is building a regional business targeting NRIs 38

Sponsorship and promotion 39
Citi NRI chooses sponsorship to raise its profile in the NRI community 39
Standard Chartered has also been linking its NRI customers with events 40

CHAPTER 4 APPENDIX 41

Data 41

Definitions 44

AAGR 44
CAGR 44
Gini index 44
Liquid assets 45
Liquid asset bands 45

Research methodology 45

The Global Wealth Model 46

The UK sub model 46
Asia-Pacific sub model 46
Forecasting methodology 46
Wealth numbers compared with others' numbers 47

Bespoke Wealth Market Sizing 48

Further reading 49

Asia-Pacific Wealth Reports 49
Asia-Pacific Insight Reports 49
Global Wealth Service: Competitor Tracking 50

Financial Services Consulting 50
Asia-Pacific contacts 51

List of Tables

Table 1:   Value of NRI deposits by type, 1999-2005 41
Table 2:   Foreign direct investment into India by country, 2002-2005 41
Table 3:   Stocks and flows of NRIs into countries around the world, 2005 42
Table 4:   Proportion of NRI populations that are affluent, 2005 43
Table 5:   Wealth markets that have been modeled using the Global Wealth Model 48

List of Figures

Figure 1:   NRI deposits have been growing in value rapidly in recent years and were worth almost USD33bn as at March 2005 13
Figure 2:   Money transmission is clearly an important service offering for expatriates around the world 14
Figure 3:   Foreign investment flows into India have increased markedly since 2004, with Mauritius being the largest contributor 15
Figure 4:   Investment advisory services offered by an offshore bank are considered important 16
Figure 5:   Understanding of income tax position is a large concern for expatriates 17
Figure 6:   The tax or legal implications of buying property abroad are of concern to expatriates 18
Figure 7:   In general all investment services were deemed to be useful, but portfolio management, property investment and collective investments were the most popular 19
Figure 8:   Tax planning and advice were considered the most important advisory and planning services that an offshore bank could provide to expatriates 20
Figure 9:   Expatriates were less interested in insurance products. Private health insurance was considered the most important for an offshore bank to provide 21
Figure 10: Of the 20 countries studies, the Middle Eastern countries were home to the largest number of NRI 23
Figure 11: The UAE and Saudi Arabia are home to 2.6 million NRIs between them, with many more arriving each year 24
Figure 12: The US is home to one of the world's largest Indian populations, and saw more than 70,000 arrive in 2005 25
Figure 13: Europe - and in particular the UK - is home to a large number of NRIs, with more than 30,000 arriving each year 26
Figure 14: The Indian born population around Asia-Pacific is substantial, although many have been outside of India too long to be considered NRIs 27
Figure 15: British Asians are more likely to be self-employed than any other UK ethnic group 30
Figure 16: Large proportions of the NRI populations in each country are either mass affluent of high net worth 32
Figure 17: The proportion of NRIs that are considered affluent compared to the domestic population is particularly favorable in Thailand, Singapore, Indonesia, China and Ireland. 33
Figure 18: A selection of the domestic Indian banks offering NRI services 35