CHINA
ICBC
The bank offers a package of services to meet customers’ needs: asset liquidity, safety and profitability. The services include asset management, discretionary portfolio services, advisory, alternative investment, financial management, cross-border financial services and wealth inheritance.
Last year it initiated new services that tailor special accounts for ultra high-net worth investors, helping the customers to preserve and increase their wealth.
Assets under management of ICBC PB increased to Rmb631.6 billion ($103.5 billion) as of the first quarter of this year, a 13.4% year-on-year growth compared to last March’s Rmb556.8 billion. The bank had about 37,000 clients with minimum personal assets of Rmb8 million in March.
As the first financial institution on the mainland to establish a private banking business, in 2008, the bank has established 36 private banking centers and 400 service centers, covering major cities in the country.
It is also expanding globally, offering private banking services in 14 countries and regions such as the US, Australia, Argentina and Singapore.
HONG KONG
HSBC
HSBC wins the award for best private bank in Hong Kong given its excellence in trust and succession planning and its relatively low cost/efficiency ratio.
The bank is in the enviable position of not having to search far for clients; many are already using HSBC’s commercial and investment banking arms.
Increased collaboration with other parts of the bank is resulting in a lower-cost, end-to-end service for the territory’s business-owning families.
Given its economies of scale HSBC’s private bank’s cost efficiency ratio is relatively low at 53.5%; for example costs are partly kept low by pushing its equities flow through its bigger markets business and automation.
HSBC’s private bank excels in wealth advisory, an area that keeps private banking clients up at night. Private Wealth Solutions has about 300 professionals in the region dedicated to wealth structuring and succession planning with about $60 billion in AUM. This business has been working with families in Hong Kong since the 1940s and is a significant fee generator.
In a world where products are basically commodities, HSBC delivers a broader product range than most. It stands out in the alternatives space, HSBC’s private bank is one of the biggest hedge fund investors in the world.
INDIA
Kotak Wealth Management
Kotak Wealth Management has a long-standing reputation as a firm that banks India's ultra rich families and track record, with over 15 years of experience in wealth management.
It stands out from competitors due to its focus. Kotak Wealth Management has a dedicated asset advisory team as well as a dedicated team for family office services, created to meet the needs of very rich families.
This includes a wide gamut of services including portfolio return, succession planning, tax optimisation and philanthropy. In terms of heft, Kotak Wealth Management advises and manages the wealth for more than 40% of India's top 100 families.
Compared to its peers, Kotak Wealth Management also has a larger product range. It has built a formidable suite of products, including equity, private equity, real estate funds, structured products and mutual funds. Kotak has built a name for itself as a trusted adviser and, in terms of bench strength, it also runs one of the largest wealth management teams in India.
INDONESIA
Bank Mandiri
The bank retains the award it won last year after its move to raise the bar on membership requirements resulted in a reduction of customers and funds under management but increased revenues.
After raising the minimum requirement for customers from Rp500 million to Rp1 billion, Bank Mandiri saw its customer base drop from 55,000 to 36,800, which allowed it to focus on a smaller pool.
This heightened level of exclusivity allows the bank to offer its products – bonds and equity referral, mutual funds and bancassurance – in a more concentrated way.
And the move appears to have been successful as the service, branded Mandiri Prioritas, generated revenues of Rp1.9 trillion in 2013, up from Rp1.6 trillion in 2012.
Customers can now complete transactions in 54 outlets across Indonesia, separate from regular branches and serviced by more than 200 personal bankers, meaning a banker-customer ratio of 150-200 per banker.
KOREA
Citi
In recent years, Korean banks have made strides toward developing strong wealth-management capabilities, and FinanceAsia has duly recognised that progress. But recently their focus has wavered. The model they are all trying to copy, however, continues to advance.
Leadership in wealth management never sits still. Korean banks wishing to compete with Citi thought they were catching up thanks to closer collaboration among their securities and lending arms, and providing premium services. But technology is making these efforts antiquated. Private banking is increasingly about using a digital offering to enhance the customer experience, and Citi is at the forefront of this shift.
Moreover, while Citi does have certain advantages as a global firm (such as offering seamless transaction services to wealthy Koreans travelling abroad), it provides local services that a Korean bank could, in theory, match. Given the wired nature of Korean society, it is all the more notable how unimpressive the Korean banks’ digital offering appears.
Better apps and mobile banking services combined with physical expansion of branches and a growing roster of investment seminars nationwide enable Citi’s private bankers to match customers with research, products and loans. Increasingly these are not just wealthy individuals, but companies, as Citi marries its experience in digital consumer banking with corporate clients.
The result is a massive rise in the number of private client customers (44% year on year, 2013 versus 2012) and, thanks to enfolding clients from the corporate network, a Korean customer base of over 310,000.
MALAYSIA
CIMB Private Banking
CIMB Group established Malaysia’s first full-service private bank in 2002, and its ascension to undisputed market leader has been nothing short of stellar since then.
Over the past year, the focus of the bank’s client acquisition and retention strategy has been on developing its key client segments as well as their families, enabling the institution to deepen its client relationships and capture a larger share of their wallet contents.
CIMB Private Banking’s assets under management stood at $6.3 billion as of April 2014, representing an increase of 39% from $4.5 billion in April 2013. According to the bank, AUM has grown by an average of 31% per year in the last four years.
In tandem with the group’s continued efforts to expand regionally, CIMB Private Banking established an offshore platform in Singapore in early 2013. With the aid of this, it is now able to offer clients cross-border collateralisation, a solution that has been growing in demand.
The uncertainty of global markets in recent years has highlighted the effectiveness of CIMB Private Banking’s active asset allocation approach to managing investment portfolios. This has set the institution apart from other market players that continue to advocate buy-and-hold investing strategies.
A notable differentiator in its portfolio management is the incorporation of foreign currency, which enables diversification away from the Malaysian ringgit.
PHILIPPINES
BDO Private Bank
BDO’s private banking business continues to grow strongly, in line with the country’s advancement as a developing nation.
The average portfolio of its 6,680-strong private client base now stands at Ps40 million with total assets under management of Ps255 billion as of April, against Ps204 billion at the end of 2012. More than half of the bank’s customers are business owners, while another 15% are professionals and 11% have inherited their wealth.
Fee-based income from wealth management activities increased by 32.25% from end-2012 to end-2013 and the bank boosted the number of professionals in its wealth advisory and trust team.
Over the past 12 months it has expanded its offshore product platform to include global Exchange-Traded Funds, venture capital funds and insurance products. BDO Private Bank is also slowly introducing derivative products to its high-net-worth customers, starting with asset swaps on Philippine and Asian sovereign bonds.
In the area of distribution, it is in the process of evaluating a new customer-portal to complement its direct interaction with clients.
SINGAPORE
DBS
Singapore remains Southeast Asia’s private banking hub, making competition stiff for the award.
This year, DBS stood out from its peers as it increasingly becomes the go-to bank local clients trust with their wealth. Eighty percent of DBS’s private banking business came from Singaporean wealthy individuals, with its high-net-worth assets increasing by 21% year-on-year in 2013 to S$69 billion ($55.5 billion ) from S$57 billion in 2012. These assets grew an additional 3% to total S$71 billion in the first quarter.
The bank also experienced impressive year-on-year revenue growth. This was largely driven by its non-interest income, which accounted for 67% of its total revenue growth in 2013, compared to 60% in 2012. The non-interest income has risen further in the first quarter of the year, accounting for 71%, showcasing the bank’s ability to de-couple its revenues from the interest-rate cycle.
And although the private bank’s expenses increased by 27% year-on year — largely a result of increases in staff costs and technology investments — DBS’s revenue growth far outpaced expenses, as the bank experienced a reduction in its cost-to-income ratio, which totalled 57% at year-end 2013, and fell to 48% by the end of the first quarter.
DBS may spend a lot on technology, but the private bank is attempting to be a pioneer in this area. It claims to be the first bank in the world to use artificial intelligence to provide contextualized wealth advice to its high-net-worth clients. It entered into an agreement with IBM to use Watson Engagement Adviser, a cloud-based, cognitive computing technology system that combines artificial intelligence with finance — based on the machine that famously beat human opponents on television gameshow Jeopardy. At DBS, Watson can read and process reams of research that is both relevant and customised. The relationship managers in turn pass that on to their clients.
TAIWAN
CTBC Bank
CTBC, previously known as Chinatrust Commercial Bank, has taken strategic initiatives to strengthen its position as one of the most global Taiwanese financial institutions and to deepen the breadth of products and services it offers customers.
Its private banking service has already secured 37,775 clients with assets under management of $16.3 billion in the domestic market.
To recruit more clients from the competitive market, the bank was the first to launch a “family membership” scheme to deepen its relationship with customers’ family members.
Six months after launching in April last year, the total number of wealth management customers and assets under management grew 7% and 9% respectively, year-to-date. This represented year-on-year growth of 33% and 40%, respectively.
Compared to 2012, across all the segments, the number of customers and AUM saw a strong double-digit increase.
The bank widened the breadth of serviced areas to overseas markets through acquisitions. It bought Japan’s Tokyo Star Bank for $542 million through a 100% share swap transaction and Manulife Taiwan for $24 million in cash.
THAILAND
Phatra Private Wealth Management
It was a challenging year for wealth management in Thailand due to the political stalemate, which hurt the country’s growth. In spite of these difficult conditions, Phatra managed to register 15.2% growth in assets under management as of April 2014.
Unlike the universal banks, where a large portion of their assets under management are client deposits, Phatra Private Wealth Management’s assets under management are investable assets.
Its merger with Kiatnakin Bank in 2011 has also opened up a broader potential captive client base of high net worth individuals and, as of April this year, Kiatnakin had successfully referred 662 clients to Phatra, with total assets under management of Bt10 billion.
Phatra has more of an open architecture platform compared to the universal banks and offers clients access to a wide range of investment products, from stocks, mutual funds, options and futures to structured products. Phatra’s private wealth platform provides clients access to about 96% of Thailand's mutual fund products.
Also noteworthy is its strong research team, which is reputable in Thailand and Southeast Asia and its dedicated private wealth management research team of six analysts. In addition, its clients have access to regional and global research publications by Bank of America Merrill Lynch.
