UBS is expanding its wealth management business in Kowloon and the New Territories, having signed a lease on a new office at One Peking Road in an effort to woo wealthy entrepreneurs.
"For us it’s more like a strategic decision to go to Kowloon to focus on the entrepreneur and to show this important group of prospective clients that we want to come your way," said Jean-Claude Humair, regional market manager Hong Kong of UBS Wealth Management in a briefing held at the bank's main office at the International Finance Centre, with a bird's eye view of the new office with UBS's signage.
To beef up its presence in Kowloon, the bank plans new hires and to re-locate existing staff so that they can be closer to clients. “Our intention is to move 50 people to Kowloon when we open in the first quarter next year, of which about 30 [are] client advisers,” said Humair. “Two-thirds already work for UBS. This year my intention is to hire another 10 client advisers to complement the existing people who are already moving to Kowloon,” he added.
In addition to hiring client advisers, UBS will also hire about four wealth planners for the Kowloon office to advise clients on longer term needs such as life insurance, succession planning and philanthropy.
UBS has roughly $70 billion of assets under management in Hong Kong's domestic private wealth market, making it the Swiss bank’s largest market within Asia Pacific, where it manages a total of $270 billion of assets.
According to Humair, UBS is the largest player in Hong Kong with a market share of about 9%-10% of Hong Kong's high-net-worth and ultra high-net-worth individuals. At UBS, high net worth clients are those that have assets of $2 million to $50 million while ultra high net worth clients have assets over $50 million.
The Swiss bank has traditionally enjoyed more traction among clients based on Hong Kong Island. At present, two thirds of UBS’s private wealth clients are on Hong Kong island and the remaining one third are in the New Territories and Kowloon, the lands adjacent to Hong Kong which stretch to the border with mainland China.
The Swiss bank is targeting wealthy entrepreneurs to whom it hopes to cross-sell other investment banking products, from IPOs to bonds. "We would like to increase our entrepreneur [market share] to a double digit penetration," said Humair.
At present, UBS's market share among entrepreneurs is in the high single digits for Hong Kong Island and mid-to-low single digits for Kowloon.
UBS is expanding in Kowloon as other Chinese and regional banks including Bank of China, ICBC, DBS and Hang Seng have stepped up their presence chasing the wealthy in Hong Kong.
“Over the past couple of years in terms of competitor landscape … we have seen an upgrade of local banks who would like to tap a share of this market and also China banks [are] more involved in the wealth management space,” said Humair.
Humair said that the "sweet spot" that UBS is targeting is the entrepreneur with $5 million-$25 million — a segment which may not have had much exposure to wealth management in the past and which typically banks with commercial banks.
The bank has signed a lease for the 23rd and 25th floor at One Peking Road with a total area of 23,000 sq ft and is expected to open shop during the first quarter of 2016.