FinanceAsia is pleased to reveal the rationale for the winners of its annual Best Private Bank awards for countries across Asia.
The competition was extremely tight this year, with numerous financial institutions proving their resilience in a difficult regulatory and banking environment.
For the winners from China, Hong Kong, India, Indonesia and Malysia, please click here.
The write-ups will also appear in the next print edition of FinanceAsia.
PHILIPPINES
BDO PRIVATE BANK
BDO Private Bank has the support of its universal bank parent BDO Unibank, but is separately organised to focus on the emerging wealthy and high-net-worth market segment. The bank claims to offer comparable services to leading offshore wealth managers. It is hard to disagree.
BDO offers a full range of international capital markets products through an open architecture platform, providing peso and foreign currency settlement accounts, wealth advisory services ranging from financial planning to portfolio-based investment management, and a full suite of trust options and family office services such as succession planning and philanthropy advice. More than 55% of the bank’s clients are business owners, so BDO also gives support with corporate governance, financial and regulatory reporting.
Last year, BDO focused on further growing its nascent discretionary management business, recruiting extra relationship managers and expanding its product offering to include, for example, private equity.
That push has already yielded results. BDO attracted 13% more clients and 16% more investible assets, after targeting high-net-worth individuals and families with assets between $500,000 and $5 million — but unlike its domestic rivals, eschewing cash services such as retail lending and credit cards.
SINGAPORE
DBS PRIVATE BANK
DBS is among the 10 largest private banks in Asia-Pacific and has the highest assets under management (AUM) in its domestic Singapore market.
It might be expected that such a large private bank would struggle to grow rapidly. Think again. The acquisition of Societe Generale Private Banking in 2014, the success of a drive to gain new clients, and the ability to garner trust from its existing client base has helped DBS’s private bank achieve a 22% compound annual growth rate in AUM during the past four years.
DBS divides its clients into two segments, the private bank catering for high net worth individuals (HNWI) with more than S$5 million ($3.75 million) and, since 2011, the Treasures Private Client arm servicing those with S$1.5-5 million. Last year, both categories contributed to a 39% rise in DBS’s profit as the customer base grew 18%, generating stronger fee and interest income, and offsetting higher costs.
The sheer size of the DBS Group and the range of investment options it can offer while adopting an open architecture platform give the private bank an edge. But its greatest strength is perhaps its ability and willingness to innovate and embrace new products and technologies.
In 2015, it was the first Singapore bank to offer its ultra-HNWI clients access to private equity deals. The bank introduced a managed advisory investment service that combines discretionary portfolio management with client participation. It has also revamped its online trading portal along with other digital services, something that appears to have complemented the job of its legions of relationship managers.
SOUTH KOREA
SHINHAN PRIVATE WEALTH MANAGEMENT
In an evolving regulatory environment for the Korean wealth management industry, Shinhan Private Wealth Management (PWM) has been in the vanguard. The firm has created an integrated banking and securities business model, introducing a broad range of private banking services supported by new technologies.
The result has been an impressive 9.1% growth in assets under management and a 9.3% rise in client sign-ups in 2015. That well exceeds its domestic rivals and maintains a dominance it has held for the past five years. Revenues, meanwhile, rose 10.8% in 2015.
Shinhan categorises its wealth clients into three segments depending on their investible assets, providing intensive coverage for those with assets of more than W5 billion ($4.5 million) and a personalised service to those with W300 million or more. It is also expanding its geographical coverage, with 27 branches in Seoul and the country’s six largest cities and opening 16 PWM lounges last year.
Shinhan is focusing on increasing its fee-based advisory business, which means extending its product range to include commodities and real estate, in addition to accessing global financial securities markets. It also provides consultancy services for tax, trusts and philanthropy, as well as expertise for specialist legal and business advisory services.
South Korea is particularly tech-savvy, so clients expect their private bankers to incorporate the latest and smartest digital platforms and apps. Shinhan’s new S-solution Portal makes the grade, and the bank constantly upgrades risk management, data analytics and relationship management systems. It is even confronting the fintech challenge head on by developing a robo-advisor.
TAIWAN
CTBC PRIVATE BANKING
CTBC continued to expand its private banking franchise both within Taiwan and across Asia-Pacific. Last year, it set up new domestic branches and gained potential new affluent clients by buying Taiwan Life Insurance. Following its acquisition of Tokyo Star Bank in 2014, CTBC signed a memorandum of understanding with Japan’s Aozora Bank and opened a new Kuala Lumpur office. CTBC now services high-net-worth individuals in 12 offshore markets, including the US.
Assets under management grew 17% in 2015 to $20.357 billion, well ahead of its Taiwanese rivals. CTBC is also the country’s leading provider of bancassurance and mutual funds. The bank has prospered by giving its high net worth clients a full portfolio advisory service encompassing three formalised planning levels: healthcare and retirement; succession; and what it calls “desire and ambition” – basically, wealth preservation and increment. It also gives them full access to international securities and real asset markets, and says it takes the training of its relationship managers and portfolio advisers seriously.
Like other Taiwanese private banks, CTBC has enthusiastically embraced digital technology in order to improve clients’ ability to monitor their portfolios, measure risk and execute trades. CTBC’s edge over its competitors is largely due to its size and the resources it can allocate to improving its service.
THAILAND
PHATRA WEALTH MANAGEMENT
Thailand’s Capital Account Liberalisation Masterplan comes into effect later this year, opening the country’s wealth management industry to foreign competition. Domestic incumbents have had to prepare for a tougher environment as global private banks with big reputations and resources will soon tap into what has been a protected market.
None have been as dynamic as Phatra Wealth Management in meeting the challenge. During the past year, it introduced new products and re-shaped its organisational structure. As a result, its total assets under management (AUM) grew by 11% to Bt334 billion ($9.6 billion) — excluding cash deposits — and discretionary AUM rose 34.2% to Bt110 billion. The firm attracted 689 new clients to take the number up to 6,231, including 80% of people on Forbes’ list of Thailand’s 50 wealthiest.
Phatra’s new products include the country’s first hedge fund with a market neutral strategy, what it claims is the first domestic beta fund to deliver better risk-adjusted return than the market index over the long term, and a pioneering accumulator structured product. Phatra was also the first financial institution to gain approval from the Bank of Thailand to offer collateralised Lombard loans to its clients.
In preparation for increased competition, Phatra redesigned its business structure, increasing the specialisation of individual bankers in a bid to improve speed and efficiency. It also developed a platform to embrace external asset managers in order to extend the range of its products and services. Finally, it has launched a new online platform in 2015 and added a second digital phase this year to enable clients to manage their portfolio while on the move.
Foreign competition is still going to a major threat to Phatra’s business in the coming years. But it has shown that it is more than up for the challenge.
Correction: A previous version of this story stated that CTBC bought China CITIC Bank (International). This is false. The two banks did consider mutual investments, but the deals were cancelled.
