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New Delhi, July 11

India is emerging as one of the most preferred private banking destinations at a time when the global private banking and wealth management industry is witnessing a boom in the M&A (mergers and acquisition) activity, global consultancy firm, KPMG, said in a report.

In its report titled `Hungry for more - Acquisition appetite and strategy in the global private banking and wealth management industry', KPMG has said that with its robust and liquid financial markets enabling exits on a timely basis to realise gains, India is a "good resource deployment avenue." The study, the third in the annual series, is based on interviews with 147 private banks around the world.

"India's economy is growing at eight per cent per annum and is going through a transformation to the next level of maturity. This enables double digit returns on most asset classes, which is not so in a majority of countries, making India a preferred private banking destination," the Transaction Services Head of KPMG, India, Mr Abizer Diwanji, said.

High savings rate

"In addition, an emerging trend in India is a high savings rate given increased earning levels. This has resulted in a robust private banking capital-raising avenue. Indian private banking capital would soon fund deployments to a significant part of our capital needs," he said.

According to the report, the growth of personal wealth in Asian economies is providing the greatest impetus to the M&A activity. About 45 per cent of all deals in 2005 took place in the Asia-Pacific region, with a majority of respondents naming China and India, as countries they sought expansion in, the report said.

With over 90 per cent of private banks opining that there are good prospects for the industry over the next three years and 89 per cent actively seeking acquisition targets and considering acquisition if the right opportunity arose, the level of activity is likely to persist, it added.

(This article was published in the Business Line print edition dated July 12, 2006)
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