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DBS, BOS shift to fast gear as private banks power ahead in Asia

Private banks are hiring, and clocking higher incomes and double-digit gains in AUM, with Asia being where the wealth creation is now

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The private banking business in Asia is firing on all pistons, and increasingly, Singapore's champions DBS and OCBC are among the shakers and movers, not just the Swiss giants.

Singapore

THE private banking business in Asia is firing on all pistons, and increasingly, Singapore's champions DBS and OCBC are among the shakers and movers, not just the Swiss giants.

The business is fiercely competitive and cost cutting continues to be seen and heard; yet those staying the course are reporting more of everything - additional hiring and impressive double-digit gains in assets under management (AUM) and higher income.

UBS's study on global billionaires last year found Asia to be leading the way in wealth creation. The region minted a new billionaire every three days, led by China. Of the 210 new billionaires created, 113 billionaires were Asian entrepreneurs.

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While the two Swiss private banks UBS and Credit Suisse, Citibank and HSBC dominate the private bank landscape, DBS is moving up the league table fast - even as its local rival OCBC, via its Bank of Singapore (BOS) unit, is snapping at its heels.

The Singapore banks are also expanding into the Middle East and London.

Tan Su Shan, DBS Bank group head of consumer banking and wealth management, said: "We have continued to deliver consistent robust growth over the past few years and were the only Singapore bank to break into the top five largest private banks in Asia-Pacific."

Following the acquisition of Société Générale Private Banking Asia in 2014, DBS Private Bank has leapfrogged over other international rivals, going from eighth place in 2015 to fifth last year, reported Private Banker International.

In Q1 2017, DBS total wealth management AUM hit S$171 billion, up 14 per cent year on year, Ms Tan noted.

"Our total income increased by 34 per cent year on year, driven by markets as well as new investment and insurance products launched this year," she added.

DBS is spreading its wings to non-traditional markets - London and Dubai.

Earlier this year, DBS obtained a licence to run a wealth-management office in London, specifically to serve ultra high net worth (UHNW) clients and family offices looking to Asia for an edge for both their business and investment needs, said Ms Tan.

"DBS's UK wealth-management business continues to grow rapidly, with a particular focus on the UHNW client segment with a nexus to the UK, including inbound Chinese investors, the non-resident Indian (NRI) community, as well as wealthy Europeans targeting an allocation to faster-growing Asian markets."

The DBS London wealth management business expects to double its headcount to 12 relationship managers (RMs) next year, she said.

RMs are also being added to the Dubai office to serve the growing group of clients and prospects, she said. The bank aims to triple the number of RMs in Dubai to 25 within the next 12 months, she said.

The Dubai office is the primary hub for servicing wealthy clients across the Middle East and Africa, said Ms Tan.

Alongside the traditional NRI clients in the Middle East, the bank is rapidly developing a footprint in the Gulf Arab segment, select Africa markets, as well as in the expatriate segments across those markets.

OCBC's Bank of Singapore has been no less active. It has ramped up rapidly in the Middle East, where it has had a representative office since 1996; last year, it acquired the Barclays wealth business.

BOS opened a branch in the Dubai International Financial Centre earlier this year. It now has close to 100 employees there.

Kirit Chauhan, the bank's market head for Middle East, the sub-continent and Africa, said: "We serve a mix of Middle Eastern and NRI ultra-high and high net worth individuals, including wealthy families."

Dubai's position in the Middle East is similar to Singapore's role in Asia. Both serve as strategic economic hubs, supporting wealth growth and investments for individuals and businesses in the region, said Mr Chauhan.

"We have been able to successfully replicate our Singapore business model in Dubai to support the growing affluence and economic activities."

Bahren Shaari, chief executive of BOS, said that, based on Boston Consulting Group's Global Wealth 2017 report, private wealth in the two key regions where the bank has a presence - the Asia-Pacific, and Middle East & Africa - rose by 9.5 per cent and 8.5 per cent respectively.

These are way above last year's global average, and this strong growth is expected to continue in the next five years, he said.

In the first quarter of 2017, the bank's AUM grew 49 per cent to US$85 billion (S$115.6 billion), and its revenue rose 51 per cent year on year.

"This growth is derived from the assets that we acquired from Barclays' wealth and investment business, as well as assets of our original client base, which we have grown a fair bit," said Mr Shaari.

"We are realising the synergy from the acquisition - a larger client base and a broader product platform that we can offer to our clients.

"The acquisition has reinforced our coverage of ultra-high net worth and high net worth individuals, and strengthened our foundation to attract new clients in our core markets - South-east Asia, Greater China and the Middle East, namely the Gulf Cooperation Council countries," he said.*

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