Kotak Wealth Management
Kotak’s private banking business has a 14-year track record and offers the widest range of wealth management solutions in India and has emerged as the country’s biggest player. It provides financial advice and manages wealth for more than 43% of India’s top 100 families and advises roughly $4.47 billion of high-net-worth money.
The bank’s client base comprises more than 1,900 wealthy clients, from entrepreneurs and business families to rich bankers. It offers a dedicated team for family office services, created to meet the needs of the very rich. It provides comprehensive solutions for building, preserving and transferring family wealth. It has also pioneered dedicated desks for structured products and estate planning, as well as offering closed-end portfolio management structures, dedicated alternate asset solutions, index-linked products, real estate funds for non-institutional customers and highly customised structures.
The Kotak Mahindra group has a significant presence in various businesses including commercial banking, auto finance, stock broking, asset management, life insurance and investment banking. This broad presence gives clients access to asset classes such as equity, debt, private equity, real estate funds, insurance, quasi private equity and mutual funds. Products can also be tailored in-house for clients with strategic needs.
BDO Private Bank
BDO Private Bank stands out as the Best Private Bank in the Philippines for tailoring its services to meet clients’ needs, offering bespoke investment strategies and reviewing portfolios regularly. The bank increased its dominance of the high-net-worth, mass-affluent market over the review period, growing its assets under management by 24% to $5.1 billion between March 2012 and May 2013. Its client base swelled from 5,800 customers to 6,370 customers during the year, while its average client portfolio grew by 8.5% to Ps38 million. BDO has long-term relationships with the country’s successful entrepreneurs and influential families. The cornerstone of its service offering is to preserve the wealth of future generations by establishing and managing trusts, helping with estate planning and advising on life insurance. BDO Private Bank is supported by its rock-solid parent, which allows it to offer peso and foreign currency settlement accounts, multi-currency deposits and fixed-income securities and derivatives. Meanwhile, its investment management options are greatly assisted by access to the research and origination capabilities of stable-mate BDO Capital. The bank also has expertise in family office services, offering investment and asset management, family office administration, and corporate governance and reporting.
Bank of Singapore
Singapore has developed into a private banking hub and Bank of Singapore continues to defend this award, thanks to its strong and focused private banking franchise. It has benefited from its parent OCBC’s solid rating, and its name underscores the safety that the city state offers very rich individuals. The private bank is run independently from the commercial bank and Bank of Singapore has its own IT and product development units, which sit within the private bank itself. As a result, its products are driven by the needs of its private banking clients rather than by the corporate or commercial bank.
The bank grew its asset under management by 35% to $43 billion as of end December 2012 and, by the end of March 2013, its assets had further expanded to $44 billion. The private bank serves a diverse group of clients in key markets including Southeast Asia, Singapore and the Indian sub-continent. Bank of Singapore also offers proprietary research in key areas that include economics, global fixed income, global equities, foreign exchange and estate planning services. However, it is worth noting that its competitor DBS has also been closing the ground on the competition.
Phatra Private Wealth Management
Phatra Private Wealth wins the private banking award in Thailand for the second consecutive year. While its assets under management may not match the large universal banks, the difference is that Phatra’s AUMs do not include cash deposits — they are all generating revenue to the wealth management division. Among its rivals, Phatra comes closest to offering an open architecture platform and its clients have access to 1,255 different mutual funds. And despite growing competition, as of May 2013, the bank managed Bt238 billion, up by 54%. Its revenue rose by 40% during the period under review.
It continues to offer a personalised service for its wealthy clients. During the past year, it has increased the number of dedicated staff from 85 to 108. The average number of high net worth clients per financial consultant stood at 88 in May 2013, a decrease from the average of 100 a year ago. The firm also has a strong equity franchise, and has been active on major IPOs and is able to offer its high-net worth clients the opportunity to participate in transactions.
ICBC Private Banking
Private banking is still a young industry in China and various reports suggest that most clients use the private banks primarily to gain access to a wider range of investment products. ICBC Private Banking is tapping into this demand with a range of investment options across fixed-income, equity, funds, insurance and structured products as well as alternative investments.
Among its latest initiatives is a pooled investment portfolio that combines the assets of clients with similar preference to maximise their demand for liquidity, security and profitability. The early success of this scheme is evident by the fact that the assets under management (AUM) reached Rmb130 billion ($21 billion) in the first year.
But it is also offering other services such as discretionary portfolio management, advisory wealth inheritance and cross-border financial services, which puts it at the forefront of the development of a more traditional private banking industry onshore for those who don’t have the option of moving their assets abroad.
ICBC Private Bank’s AUM increased by 20% to Rmb556.8 billion in the year to March and its number of clients grew by a similar amount in the first quarter to exceed 30,800. It opened 26 new private banking centres in China’s major cities in 2012 on top of its existing 10 and this year it is expanding into second tier cities. It is also planning to expand its international presence from Hong Kong, Singapore and Europe into new markets, including the Middle East and Australia.
HSBC Private Bank
HSBC doesn’t break out the performance for the private bank in Hong Kong, but notes that the city is at the heart of its Asian operations which was the largest contributor to net new money in 2012 with $1.9 billion. Similarly, the key reason why private banking clients choose to deal with HSBC is not its position as the largest domestic bank in Hong Kong, but the fact that it gives them access to a vast regional and global footprint with a strong anchor in Hong Kong.
With more than 1,400 employees in Asia, HSBC Private Bank has the depth to offer a full range of integrated banking and wealth management solutions, including a dedicated trust and estate planning arm that focuses specifically on the transfer of wealth between generations. This is particularly important in Hong Kong and Asia where so many companies are still family-owned and a key differentiator for HSBC. The same unit also helps clients navigate regulations and taxes across multiple geographies and jurisdictions.
Another special unit provides consultations for ultra-high-net-worth clients who own a business, offering them extended services, via its Global Banking and Markets division, within corporate finance, capital raising, M&A and strategic partnerships.
Clients can choose between investment opportunities with more than 60 external investment managers in Asia and HSBC’s own in-house discretionary multi-manager solutions. The bank also leverages its own global hedge fund platform that has $32.7 billion of alternative assets under management to source exclusive opportunities for its clients in Asia and offers access to private equity investments and real estate through club deals and co-investments. One of its latest additions is to offer securities borrowing and lending to its private bank clients in Hong Kong and Singapore – a popular funding tool among wealthy individuals in Asia.
Indonesia’s growing wealth has provided domestic banks with ample opportunity to expand their offering to affluent and high-net-worth customers. Indeed, the race to sign up customers has sometimes proceeded too fast amid intense competition, but Bank Mandiri has taken a lead among the domestic banks in offering a professional service.
Earlier this year, it increased the minimum balance requirement for wealth management customers to Rp1 billion (roughly $100,000) from Rp500 million as part of a strategy to raise the level of customer service it offers.
Increasing the exclusivity of its private banking product also helps to reduce the inefficiency that bedevils mass-market banking in Indonesia — fewer customers concentrated in fewer centres should help it to reduce costs and further improve margins.
The bank has also upgraded its business intelligence infrastructure in a project that includes consulting, analytics, software development and reporting automation. It extends to wealth management as well as mass banking and electronic banking, meaning that all three platforms offer a uniform product.
Shinhan Private Wealth Management
All banks in Korea have established wealth-management arms, traditionally catering to affluent but not necessarily rich customers. Shinhan PWM’s domestic business is quickly growing, but the area enjoying the most success is its private bank, aimed at the upper end of onshore private banking.
Shinhan recorded 13.4% growth year-on-year in the assets under management for its top-tier private banking customers. At $12.6 billion, this is still small relative to some of the securities companies, which traditionally dominate this space, but it is growing more quickly; the wealth-management AUM for the mass affluent is also growing but more slowly, and now accounts for another $35 billion of assets.
Shinhan is also adding wealthy clients more quickly than its competitors, with 17.9% year-on-year growth in private banking client numbers, to more than 24,000. (Its mass-affluent wealth management service has another 160,000 clients.)
The extra business is also adding to the division’s net income, up a sturdy 6.6% year on year to end May 2013.
Shinhan is at the forefront of integrating the private bank with its commercial bank, investment bank and joint-venture asset management company. Its clientele is not as savvy or wealthy as those trading products at securities companies, but this approach is allowing banks such as Shinhan to compete a bit more head-on, and the product range is starting to converge as well. In an era of poor returns on domestic asset classes, such growth is telling.
CIMB Private Banking
CIMB established Malaysia’s first full-service private bank in 2002, and now provides a suite of offerings to customers with a minimum of $1 million. It has recently built its services around a “one bank” concept in a bid to convert its business relationships into private banking business. As a result of this, CIMB has captured a bigger share of wallet while deepening client relationships.
The strategy is clearly paying off, as CIMB says new client acquisition contributed more than 16% of total assets under management during the past 12 months. As of May 2013, assets under managements at the private banking business have grown to M$15.9 billion ($5 billion), represening an impressive increase of 39% from M$11.5 billion in May 2012. This follows a 35% increase the previous year. The unit has an outstanding loan book in excess of M$1.1 billion from a base of 2,961 clients.
Clients’ growing confidence in CIMB’s advisory-led investment approach has also produced a substantial increase in discretionary mandates, funds and unit trusts to 24%, up from 21% a year earlier, contributing up to M$1.2 billion of the total assets under management.
As CIMB expands its banking business outside Malaysia, it says that it has also attracted offshore customers, particularly Islamic customers from the Middle East.
BDO Private Bank
BDO Private Bank stands out as the Best Private Bank in the Philippines for tailoring its services to meet clients’ needs, offering bespoke investment strategies and reviewing portfolios regularly. The bank increased its dominance of the high-net-worth, mass-affluent market during the review period, growing its assets under management by 24% to $5.1 billion between March 2012 and May 2013. Its client base swelled from 5,800 customers to 6,370 customers during the year, while its average client portfolio grew by 8.5% to Ps38 million.
BDO has long-term relationships with the country’s successful entrepreneurs and influential families. The cornerstone of its service offering is to preserve the wealth of future generations by establishing and managing trusts, helping with estate planning and advising on life insurance. BDO Private Bank is supported by its rock-solid parent which allows it to offer peso and foreign currency settlement accounts, multi-currency deposits and fixed-income securities and derivatives. Meanwhile, its investment management options are greatly assisted by access to the research and origination capabilities of stable-mate BDO Capital. The bank also has expertise in family office services, offering investment and asset management, family office administration, and corporate governance and reporting.
Taipei Fubon Bank
The private banking division of Taipei Fubon Bank has been growing steadily since it was set up in 2008 to cater specifically to clients with at least $1 million of managed assets and the impressive performance in the past year shows that it has now firmly established itself as a key player in the upper segment of the market.
For sure, it is still small compared to rivals such as CTBC Bank, which count customers with as little as $100,000 of investable wealth as private bank clients, but Taipei Fubon Bank’s targeted focus on the country’s richest individuals is attracting attention among those who are eligible to use its services.
In the past 12 months it has grown its number of clients by 47% to 6,235 and its assets under management has more than doubled to NT$209 billion (just under $7 billion). To deal with this growth, the team dedicated to high-wealth clients has increased by 312% to 202 people, including 148 relationship managers.
In addition to the usual mutual funds, insurance policies, estate planning services, trusts, structured products, and foreign bonds, the bank also offers its clients professional investment products such as lower-rated investment grade bonds and commodity ETFs, giving them the opportunity to further diversify their investments. All its clients have access to a 24-hour global secretarial service and the bank also arranges a variety of activities for family members, including networking events for second generation successors and a series of popular money management camps for kids aged 11 to 13.