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S'pore private banks want bigger share of Asia market

Singapore private banks have enjoyed steady growth in their assets under management (AUM) over the last four years, despite rising competition from global firms. DBS Private Bank and Bank of Singapore look poised to capture a greater share of the pie in China and Southeast Asia.

SINGAPORE: Singapore private banks have enjoyed steady growth in their assets under management (AUM) over the last four years, despite rising competition from global firms.

Two key players - DBS Private Bank and Bank of Singapore - have both outperformed the industry AUM growth rate in recent years, and look poised to capture a greater share of the pie in China and Southeast Asia.

A recent report by PwC estimated that AUM in the Asia-Pacific region will more than double, between 2012 and 2020, to hit more than US$16 trillion.

Singapore-based wealth managers like DBS Private Bank and Bank of Singapore are hoping that they will benefit as clients opt for banks which they deem are safer.

Renato de Guzman, CEO of Bank of Singapore, said: "One of the elements is flight to safety, in view of the sub-prime crisis in the US, the European debt crisis, the problems in Cyprus, also what has been happening in Switzerland in term of data loss, issues in the US with regards to confidentiality, it also made people consider in terms of where they put their money."

Tan Su Shan, group head of consumer banking and wealth management at DBS Bank, said: "There is an increasing strength in local private banks because globally most banks have decided to go back to their home turf. The banking industry is getting more local, potentially less global, more regional as well."

DBS Private Bank said its AUM for high net-worth individuals with investable assets of over S$1.5 million has increased at a compound annual growth rate of 21 per cent.

In 2013, the AUM for this group was S$69 billion.

At Bank of Singapore, the AUM for clients with investable assets of over US$1 million came in at S$62 billion in the first quarter of 2014.

In the past four years, Bank of Singapore has also managed to nearly double its AUM from S$33 billion in 2010 to S$58 billion last year.

Industry players said the wealth management market in Asia is set to grow further in the coming years, supported by rising intra-regional trade, urbanisation and a growing population of the middle class.

China in particular will remain a key focus for Singapore private banks.

Mr de Guzman said: "When you think about the possibilities with regards to China in terms of loosening capital controls, that's going to be a tremendous growth area, when you see a lot of the high net worth in Asia, mostly entrepreneurs, they also look to diversify their assets globally."

Meanwhile, DBS Bank's acquisition of Societe Generale's Asian private banking business will fuel its ambition to be a top private bank in the region.

The S$278-million deal could be completed by October.

Ms Tan said: "I hope with the deal it gives me more capacity both in terms of people, platform and product to grow quicker, to do more and to really create stickiness with our clients, and widen our client network. I hope that will enable us to become part of the big five soon."

According to industry data, DBS was three places off the top five in 2012. The top five private banks in Asia (except Japan) were UBS, Citi, HSBC, Credit Suisse and JP Morgan. 

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