Leadership Awards

 

Salem: Veteran who is well-placed to observe longer-term trends

Both the winners of The Asset’s inaugural Leadership Awards in Private Banking, Wealth Management and Investment – Citi Private Bank’s Bassam Salem and Yuanta Futures’ Carolyn Chou – have played key roles in shaping the organizational structure of their firms. Topping this is ensuring their companies are set up to make the most of the opportunities presented in Asia’s fast-changing marketplace and advising on wealth growth and preservation.

“Private banking is the art of giving exceptions,” remarks Salem, CEO of Citi Private Bank and winner of The Asset’s inaugural Private Banker of the Year award. A 30-year industry veteran, he is well placed to observe the longer-term trends impacting the industry.

“For clients to differentiate among private banks, they would need to look at how long you have been in the business, not only as a firm but as individuals,” says Salem, who first joined Citi Private Bank in 1985 and then rejoined as CEO for the Asia-Pacific region in 2011. He stayed for 15 years during his first period at Citi Private Bank: working as investment head for both the Asia-Pacific and the Europe/Middle East/Africa division, private banking head for Asia-Pacific, division executive for global investment services in the US and product head in Switzerland.

Like many of his entrepreneur clients, Salem then joined a start-up venture in 2001 – seeing the boutique private bank, EFG Bank, become a listed company. He worked as partner and CEO Middle East and India, investment head for Asia-Pacific, headed the Singapore office, started the Bangkok and Jakarta offices and launched EFG’s Middle East business in Dubai.

Yuanta Futures vice-chairman and general manager Carolyn Chou has also worked across the banking, securities, asset management and futures industries in Taiwan. The breadth and depth of her experience has prepared Chou for a leading role in fostering partnerships across the Greater China region.

She has led the company to achieve 20%-32% overseas futures market shares in Hong Kong, Taiwan and Singapore, across asset classes. The firm’s Hong Kong branch is key to providing Taiwanese clients access to overseas products, which they are restricted from investing in at home. Alongside growth overseas, the firm has established five branch-offices covering the whole of Taiwan, from north to south.

 

Chou: Leading role in fostering partnerships in Greater China

Chou plays a lead role in devising and executing a consultancy-led strategy. Her team has visited 137 of the 155 futures companies in China, introducing the company’s trading software, which is recognized by four mainland exchanges. She is also leading joint promotion discussions between Yuanta Futures and a number of futures companies in the mainland. The platform is well positioned to provide a gateway for access to overseas futures products, via the company’s Hong Kong branch.

 

Giving exceptions

Salem explains that segmenting clients into three categories – with investable assets of US$100,000-US$1 million, US$1 million-US$10 million and more than US$10 million – provides a clear structure for private bankers seeking exceptions for their clients – ranging from waiving fees to temporarily raising a credit limit. He sees this as harder to do in a private bank where all clients receive the same proposition. In this case, junior bankers will tend to seek the same price for their clients as those offered to wealthier clients, jeopardizing the sustainability of the business model.

To some extent, the argument also points to the validity of more specialized business models, focused on specific client segments. This year marks the introduction of wealth management specialist categories, focused on non-bank providers of wealth management services to targeted client segments.

Undoubtedly, the unceasing requirement to comply with a broader swathe of regulations has seen some private banks become more internally focused, shifting attention away from clients. At the same time, clients continue to be distracted by news about banks incurring fines, stress testing and counterparty risk limits to the benefit of non-bank specialist wealth managers. But even here the picture differs by country, with securities companies rising as a key challenger to private banks in China, for example, while trust companies decline.

As the source of Asian wealth shifts away from export-focused businesses, the position of banks at the centre of the picture will inevitably decline as a more diverse set of wealth managers rises to cater to the needs of an equally more diverse group of wealthy individuals.

 

Bank focus

For now, the enduring low interest rate environment continues to mean that banks remain firmly at the centre of Asia’s wealth management universe. The trend has been for local, onshore private banks to increase the range of local currency collateral that they accept for the extension of credit.

As other sources of fee income growth – such as credit cards – are dwindling, wealth management is seen as a holy grail, enabling banks to convert low cost funding in the form of deposit into sticky, fee-generating wealth management products. At the same time, many are lowering the entry threshold for access to their private banking offering – to US$500,000 in many markets – and are more akin to priority banking services, dedicated on promotions and special offers, much like credit card promotions. The challenge for local banks is developing a client-concentrated, private banking culture.

While interest in discretionary portfolio management is rising, client interest is on both the liability as well as the asset side of their balance sheet, favouring those who can offer corporate and investment banking solutions, as well as investment advice. Entrepreneurs listing their companies on a stock exchange continue to seek private bank partners which can provide single stock lending, for instance, allowing them to retain – and borrow against – shares in their company. They also seek cross-border abilities which are also the preserve of larger financial institutions. As Salem puts it, our “edge is our balance sheet, our products, our own asset management team”.

At the same time, a recent report – titled ‘Business before wealth’ – on wealth management needs and preferences on high net worth (HNW) business owners in Asia, Africa and the Middle East produced by Standard Chartered Private Bank and Campden Wealth Research highlights that lawyers and accountants are the most trusted advisors among the wealthy, not private bankers. Further, 85% of respondents to the survey undertaken in conjunction with the report stated that they consult lawyers and accountants about wealth planning, while only 50% discuss these issues with their private banker.

The promise of wealth transfer between generations is one factor underpinning the interest in expanding wealth management operations in Asia. Many are pulling back, in the face of “expensive premises, a highly regulated market, extremely high costs in terms of hiring people and cost to income ratios close to 100%”.

Notably, the award period witnessed DBS Bank acquire Societe Generale’s Asia ex Japan private banking operation. More recently, Brazil’s BTG Pactual bought Swiss boutique BSI Bank. The deals saw the two vaulted over the US$100 billion mark in terms of HNWI assets under management (AUM).

More consolidation is expected. At the same time, as some participants exit, others continue to expand. “We believe there are significant opportunities that come with focusing on clients who have roughly C$1 million-C$5 million in investable assets,” says Myra Cridland, senior vice-president and head, BMO Harris Private Banking, Canada and Asia. “We do have clients who have connections to Canada and to the US. We are uniquely positioned to assist them given that we offer private banking services in all three markets,” she adds. Banks are focused on deepening penetration in fewer markets. HSBC, for example, is centred on 10 Asia-Pacific markets for wealth management, down from 18 at the start of 2013.

Undoubtedly, Asia presents a large and growing market, yet many assets are onshore, local currency denominated. Market participants such as Societe Generale have decided to concentrate on investment spending on capabilities aimed at manufacturing products for local banks such as DBS Bank to sell. As part of the sale of its Asia private banking business, a memorandum of understanding was signed between DBS and Societe Generale to leverage each others’ strengths over the longer term, with DBS offering more European-linked products and services into its existing customer base.

 

 

Regional Awards

 

Best Private Bank, Asia
Citi Private Bank

Citi Private Bank is recognized as Best Private Bank, Asia. Citi’s Wealth Management AUM in Asia-Pacific rose to US$251 billion at end-May 2014 from US$210 billion at end-March 2013 across five market segments – emerging affluent, affluent, HNW, ultra-high net worth (UHNW) and mega wealthy. The private bank pursues clients with more than US$10 million of investable assets, with Citi Private Client targeting those with US$1 million-US$10 million and Citi Gold focused on those with US$100,000-US$1 million.

By mid-2014, client AUM passed the US$250 billion milestone, thanks to strong execution in markets ranging from China to India, which saw an onshore presence added a year ago to its established onshore network – building on strong twin bases in Hong Kong and Singapore. Through these two centres, clients can access the full range of investments (advisory, discretionary/managed and alternatives), banking and trust needs from private banks as well as those of Citi, including a full range of corporate, trading and investment banking services. Leveraging linkages between Citi private bank, the global consumer group, institutional clients group and external partners is a key emphasis.

The private bank has the full range of services to cater to the needs of all five segments, with entrepreneurs being the key focus. Citi Private Bank’s Investments Lab tailors comprehensive strategies to suit client’s individual needs – from asset-liability balancing and interest rate hedging to managing single-stock concentration risk. Impressively, managed investments’ share has risen from 25% of revenues three years ago to 40% today, reducing the risks inherent in an advisory model and helping to maintain the private bank’s industry leading (among foreign banks) cost-to-income ratio.

A sustainable business model reassures clients that the private bank has a long-term view. With 60 offices in 25 countries – including 12 Asia-Pacific markets – it can claim to be the most global private bank. The private bank boasts over 5,000 clients in Asia, including a third of Asia ex Japan’s billionaires. More broadly, Citi wealth management business services 630,000 clients across 13 countries.

 

Best Private Bank, Asia
UHNWIs and Japan
Barclays

 

Last year’s Rising Star among Asia’s best private banks for ultra-high net worth individuals (UHNWIs) is this year’s winner. Barclays’ 2013 revenues from the UHNWI segment (defined in this case as those with over US$20 million of investable assets) were greater than total revenues for Barclays’ Asia private banking franchise in 2010.

Growth momentum has accelerated in recent years – following the setting up of an India onshore business in 2009 and a joint venture in Japan with SMBC and SMBC Nikko Securities in 2010. The focus on the UHNWI segment has increased, with the establishment of a Greater China desk in Singapore in 2011 and a very significant increase in UHNWI AUM in Hong Kong last year in the wake of the recruitment of a team of experienced relationship managers. Firm foundations are rooted in strong offerings across key markets – from onshore India and Japan to offshore China and Indonesia alongside a successful non-resident Indian franchise.

In Japan, the SMBC Barclays division of SMBC Nikko Securities benefited from the increased dedication and commitment of its Japanese partner on the wealth management sector. The partners strengthened their offering to include access to a platform in Singapore for SMBC clients. The joint venture model continues to perform well, combining Barclays’ research expertise and innovative propositions, SMBC’s strong network of clients and Nikko’s infrastructure and operational support. At the same time, the appetite for global investment opportunities among Japanese clients continues to expand.

 

Best Private Bank
Asia HNWI

J.P. Morgan Private Bank

 

J.P. Morgan Private Bank is recognized as Best Private Bank, Asia HNWI in recognition of its success building out its private wealth management (PWM) unit focused on the high-net-worth segment (serving clients with a net worth of US$10 million-US$30 million). Investment in the franchise highlights its commitment to the market, beyond its traditional focus on the ultra-high-net-worth segment (catering to those with a net worth of over US$30 million).

Client facing staff levels rose by 10% last year. Strong growth in discretionary mandates underpinned growth, with high levels of interest in developed market investments over the awards period playing to the banks’ strengths. Reportedly, the first quarter of 2014 witnessed the private bank’s strongest quarter ever in terms of net new money inflows.

Beyond investing, capabilities extend to tax and estate planning, family office management, philanthropy, fiduciary services and special advisory services. At the same time, the bank offers a comprehensive range of credit solutions, including mortgages in Hong Kong, Singapore, the US, France, Switzerland and the UK as well as single-stock lending and aircraft financing. The private bank’s alternative investment platform leverages the bank’s global reach.

A high (12:1) ratio of clients per client advisor (across the private bank) ensures adequate attention is given to individual needs. The bank employs a team approach, rather than relying on a single point of contact with employee compensation linked to both long and short-term goals and not based on commission.

 

Best Boutique Private Bank

Julius Baer

 

Julius Baer is recognized as Asia’s Best Boutique Private Bank for the fifth year in a row. The independent private bank’s global AUM rose to 274 billion Swiss francs by end June 2014 – including 56 billion francs derived from the acquisition of Merrill Lynch’s non-US international wealth management (IWM).

The integration has served as a renewed catalyst for growth, bringing demands for platform upgrades and new investment. Asia is seeing net new money growth in the high double digits, even before inflows related to the IWM integration.

The acquisition sees Asia rise to account for over 20% of group AUM (excluding European clients booked in the region), substantially increasing the size of the total workforce in Hong Kong and Singapore and boosting headcount to over 1,000 people. Asia’s share of group employees has increased from 15% of the total in 2012 to a fifth.

At the same time, the gap between global and Asia’s gross margin has narrowed. Since expanding its global footprint to Asia in 2006, Julius Baer has opened full service branches in Hong Kong and Singapore, a representative office in Shanghai, investment advisory office in Jakarta and a 60% stake in TFM, a wealth management firm in Japan, to service high net worth clients there.

Since reaching a strategic collaboration agreement with Australia’s Macquarie Group in October 2011, it has forged additional alliances with Bank of China Limited and Bank of America Merrill Lynch to cater to its clients’ corporate and investment banking needs.

The IWM integration process in India is ongoing and following the completion, an onshore presence will be added in the country. Asset transfers in Hong Kong and Singapore were completed between May 2013 and February 2014, in several phases.

For the first time last year, the private bank hosted 180 clients at the Julius Baer Next Generation Summit in Asia. An impressive list of guest speakers included economist Paul Krugman, Air Asia’s Tan Sri Tony Fernandes, Yungfeng Capital’s David Yu and Fosun’s Liang Xinjun.

 

Best Wealth Manager, Asia, China, Indonesia and Singapore;

Best Private Bank, Singapore

DBS Bank

 

DBS Bank has continued to build out its wealth offering – including the HNWI-focused DBS Private Bank (over S$5 million of investable assets) and DBS Treasures Private Client (TPC, catering to clients with S$1.5 million to S$5 million) in Singapore and Hong Kong as well as DBS Treasures in the additional markets of China, India, Indonesia and Taiwan (targeted at mass affluent clients with minimum liquid AUM ranging from the equivalent of S$50-S$85,000 in the latter four markets to HK$1 million in Hong Kong and S$350,000 in Singapore.)

DBS Bank is recognized as Best Wealth Manager, Singapore for the fourth year in a row; Best Wealth Manager, Indonesia and Best Private Bank, Singapore for the second time; and Best Wealth Manager, Asia as well as Best Wealth Manager, China for the first time.

The scale that a strong base delivers meant that DBS Bank had the necessary operating capacity to proceed with the acquisition of Societe Generale’s private bank arm in March 2014. The deal boosts DBS’s wealth management AUM from S$94 billion to S$125 billion (US$101 billion) – placing the bank among an elite group of wealth managers to cross the US$100 billion mark.

It also added 60 relationship managers (RMs) in one swoop, split between Singapore and Hong Kong. While significant deepening of capabilities is occurring in the two financial centres, broadening is also taking place at the Treasures-level.

In China, DBS Bank has grown its RM team to 180 across 10 cities in 30 centres concentrated in Shanghai and Beijing. DBS was the first foreign bank to receive a Shanghai Free Trade Zone license, boosting its capacity to meet clients’ cross-border needs. In addition, it gained an onshore unit trust license in July 2013. Its education efforts have seen over 60,000 customers attend online investment seminars that it has hosted.

In Indonesia – with an entry-level of US$50,000 AUM for Treasures clients – it has focused on five core affluent cities served by some 160 RMs in total. Over the last three years, AUM has increased by more than 50% among some 30,000 customers, the majority of whom are business owners who value DBS Bank’s treasury offering in particular – encompassing FX, fixed income and structured deposit products.

DBS Private Bank’s success has been underpinned by the banks’ ability to provide liquidity and hedging solutions.

More recently, economies of scale have been reaped across offerings – including discretionary portfolio management (DPM), where the bank is on target to cross the S$1 billion AUM target within three years from launch in 2012; fund business AUM has risen threefold over the past three years; and the innovative Watson Wealth Advisory Tool (an artificial intelligence collaboration with IBM) offering is scheduled to go live in 2015. A strong push across digital platforms is boosting efficiency in private banking and wealth management.

A memorandum of understanding to provide Societe Generale products builds on the approach taken in the past, such as the sale of DBS Asset Management (which saw the group acquire a 7% stake in Nikko Asset Management). Partnerships enable the bank to deliver local, Asian and global products depending on the appetite within each market it serves.

 

Wealth Management Specialist, Asia; Best Wealth Manager, India

IIFL Private Wealth Management

 

Since starting out in 2008, IIFL Private Wealth Management has been quick to establish a presence across 21 cities in India and around the world, focusing on the non-resident Indian (NRI) segment. It is recognized as India’s Best Wealth Manager for the fourth consecutive year and as Wealth Management Specialist, Asia, for the first time. It is unique in providing an integrated advisory, trust, distribution, asset management and private equity platform.

Last year, it gathered US$400 million with the launch of pioneering alternative investment funds (AIFs) across equity, real estate and high yield debt alongside bespoke AIFs for larger family offices. It also introduced a first of its kind 10-year year fixed maturity plan (or FMP) scheme, with inflation-indexed bonds as the underlying. They have demonstrated leadership in packaging products which allow its client base a multitude of ways to invest in India’s growth story – introducing the market’s first ‘apartment fund’ last year, to buy unsold apartment inventory, addressing the liquidity needs of real estate developers on the one hand and investors’ appetite for yield on the other.

High domestic interest rates make it that much more essential that any funds not invested in high-yielding bank deposits are deployed in ways that achieve a high risk-adjusted return. The firms’ growth to over US$9 billion assets under advisement (AUA) and 300 financial advisors in just six years since launch is testament to the appeal of the firm’s ‘advisory practice, alignment of interests and ownership mindset philosophy.

 

Wealth Management Specialist, Hong Kong

London and Capital (L&C) Asia

 

The award period witnessed a pick-up in interest in the services provided by specialist wealth managers across the region. The eight-man team at London and Capital (L&C) Asia has been a pioneer in the field since it was established in 2010, and is recognized as Best Wealth Management Specialist, Hong Kong. It positions itself as a clients’ private investment office within a regulated multi-family office structure and aims to be ‘a lot of things to a limited number of clients’.

London and Capital Group, which had total end-2013 AUM of almost US$4 billion, has a large minority equity stake in the Asia franchise. In return, clients of Hong Kong-based L&C Asia enjoy group-level investment support, with a weekly presentation from the group’s London-based chief investment officer (CIO) that they can participate in via video conference, for instance. The group also produces its own discretionary management strategies such as the ‘star portfolio’ which serves as the basis for one of the bespoke discretionary managed account offerings.

Demand picked up over the award period. Despite its DPM penetration in Asia accounting for more than twice the industry average in terms of AUM share, L&C Asia’s clients remain mostly advisory. In contrast, discretionary mandates dominate in the case of the London office. Further, differences exist and the model required adjustments in Asia. For instance, clients in London open an account with L&C, which then decides which custodian to use. In Asia, the client opens an account with a custodian private bank directly, with regional clients providing L&C Asia with a limited power of attorney over their private banking account

 

 

 

Country Awards

 

 

Best Private Bank, Malaysia

CIMB Private Banking

 

CIMB Private Banking is recognized as Malaysia’s Best Private Bank for the fifth year in a row. Over the past year, the focus of its client acquisition and retention strategy has been on nurturing key client segments as well as their families, enabling the institution to deepen and extend its relationship with clients.

Another year of impressive growth had its AUM rise by 39% to US$6.3 billion by end April 2014 – in excess of 31% average annual AUM growth over the past four years.

In tandem with CIMB Group’s continued efforts to expand regionally, CIMB Group Private Banking established offshore platforms in Indonesia, Thailand, and Singapore in early 2013.

Increased demand for cross-border collateralization of assets has also been seen over the award period. Uncertain global market conditions highlight the effectiveness of CIMB Private Banking’s active asset allocation approach to managing investment portfolios – setting the institution apart from other market players.

In Malaysia, a notable differentiator in CIMB Private Banking’s portfolio management is the incorporation of foreign currency, allowing diversification away from the ringgit.

 

Best Private Bank, Philippines

BDO Private Bank

 

Also retaining its title for the fifth consecutive year is BDO Private Bank. It has continued to post strong growth and plans to expand its geographical coverage beyond Metro Manila, Cebu and Davao amid rising wealth. AUM has risen to 255 billion Philippine pesos (US$5.83 billion) at end-April 2014, up 13% year-on-year and 36.8x since Banco de Oro acquired Banco Santander Philippines in 2003.

Clients have increased 6.1-fold over the same period. An end to automatic upgrades from parent, BDO Unibank, after reaching the US$500,000 asset threshold and restrictions on sole investment SDAs (special deposit accounts) held with the central bank, saw the rate of client growth slow last year. The average customer portfolio stands at 40 million pesos.

A sustained rise in fee-based income has accompanied a greater focus on recurring income from discretionary and advised mandates. The wealth advisory and trust teams have been expanded in recent years, providing more support for relationship managers.

 

Best Wealth Manager, Taiwan

CTBC Bank

CTBC Bank is recognized as Taiwan’s leading wealth manager for the fifth straight year. The bank has stayed focused on its core strengths amid increasing competition and a widening gap between private and government banks when it comes to wealth management.

The launch of a new wealth management service in April 2013 was followed by double digit year-on-year customer and AUM growth. It has built on a family membership scheme launched in January 2013, which offers advisory services on tax and succession planning and allows all household assets to be taken into account to reach the minimum AUM thresholds of NT$6 million, NT$30 million and NT$60 million. Inflows from other banks have followed.

At higher wealth levels, the bank has built on its Private Plus offering (targeting clients with net assets of NT$30 million and above), breaking down the barriers between the credit and wealth management departments within the bank. Further, it views acquisitions of Tokyo Star Bank and Manulife Taiwan (announced last year) as adding depth to its product offering.

Best Wealth Manager, Hong Kong

HSBC

 

HSBC was recognized as Hong Kong’s leading wealth manager for the fourth year in a row as the bank continued its strong performance in the market. The award period witnessed an enduring focus on transformation, with a range of initiatives launched in the city – in tandem with rollouts across the region.

Milestones revolved around added digital capabilities across platforms, such as a global mobile banking app which went live at the end of March 2014. Other launches last year: stock trading functions on tablet; a real-time pricer for daily cash dividend callable equity linked investment products (DCDC ELI) and target FX rate for automatic order execution.

At the same time, efforts to ensure that customer-centricity is built into the bank’s DNA began to reap dividends. Enhanced worldwide fund services and theme-based client research solutions were introduced while the HSBC Managed Solutions series was expanded.

HSBC forged ahead with a broader and deeper range of renminbi-linked products, alongside a bond dedicated service providing primary bond offering, bond sourcing on request and transfer-in service. Additionally, the Jade range of universal life insurance policies were launched, catering to legacy planning and transfer needs.

 

Best Private Bank, Thailand

Siam Commercial Bank

 

Siam Commercial Bank’s private banking arm emerges as Best Private Bank in Thailand for the third straight year. Among the region’s earliest movers – it was the first Thai bank to establish a private banking department in 1996 – it has looked to its roots as a pioneer to meet fresh challenges to its leadership position.

Last year witnessed innovation across the group, strengthening the foundations on which SCB Private Banking’s success is built. Clients gained access to Thailand’s first telecommunication infrastructure fund, for example, and more broadly benefit from the focus on tailor-made private fund solutions of the bank’s asset management arm.

The significant size of the private banking business – accounting for over a quarter of the bank’s total AUM – helps it ensure that adequate resources are devoted to the private bank, which acts as an access point for clients seeking to tap the group’s wide range of services.

 

Best Wealth Manager, Korea

Shinhan Private Wealth Management

 

Also recognized for a third consecutive year is Shinhan Private Wealth Management (PWM), which continues to benefit from its group-wide PWM model, based on collaboration between its bank and securities arms. Since the launch of PWM services in 2012, Shinhan Bank has seen the industry’s fastest rate of increase of HNWI customers – with those having more than one billion won (US$978,890) and 100 million won of financial assets growing by 21% and 18% respectively.

The surge in deposits is in turn being reflected in assets allocated to investment products. Shinhan offers comprehensive investment solutions via its pioneering investment products and services division, which integrates group-wide products including investment, real estate and tax advice under one roof. Surveys point to Shinhan being at the forefront of Korea’s wealth management market, across areas ranging from customer service, wealth management, real estate consulting, funds and securities.

 

Best Private Bank, China

ICBC Private Banking

 

ICBC Private Banking is recognized as China’s Best Private Bank for the second year in a row amid intense competition from other banks as well as securities companies. At the same time, trust company growth has slowed amid product defaults. ICBC Private Banking has continued to maintain a 25% growth in assets and clients. Responding to the more conservative investing environment, ICBC Private Banking has strengthened its in-house product development capabilities and built on the rapid growth of a range of pooled investment portfolios launched in 2012, to 220 billion yuan in AUM. Earlier this year, it launched a discretionary account service – catering to clients with more the 20 million yuan to allocate. Rapid expansion into second tier cities has also been seen, building on a nationwide presence across the country’s provincial capitals. Doing so leverages demand for the bank’s liability-side solutions, given a greater focus on credit.

It has also seen the bank add 2,000 employees across 400 service centres established in second tier cities to date, complementing the existing 36 private banking centres. At the same time, ICBC Private Banking has expanded worldwide – to 14 international markets.

 

Best Private Bank, Taiwan

Taipei Fubon Bank

 

Taipei Fubon Bank retains its title as Taiwan’s Best Private Bank. The bank continued to upgrade its RAM (risk allocation management) warning system – first launched in 2010 – boosting its asset allocation advisory capabilities. It continued to see strong client and AUM growth (of 75% and 69% respectively over the award period).

Despite lowering the threshold for private banking clients at end 2013 – to NT$15 million – it maintained an average AUM of NT$31 million per client, comparable with the year earlier figure. The lower entry threshold is in line with a general trend in Taiwan amid competitive pressures.

A strong brand helps it attract and retain experienced relationship managers, with financial consultants, product managers and specialist staff numbers rising 22% to 242 over the award period.

Best Private Bank, Hong Kong

BNP Paribas Wealth Management

 

BNP Paribas Wealth Management is a first time winner of this award, in recognition of its success delivering a differentiated offering in Hong Kong’s competitive marketplace – evolving and maturing to ensure that it stays one step ahead of the needs of the city’s increasingly wealthy and diverse private banking client base. The bank can claim to have active relationships with over 50% of Hong Kong’s billionaires – all the more impressive considering that the city is estimated to rank third in Asia as home to 75 billionaires (behind only China (157) and India (103). The bank has been at the forefront of expanding its alternative investment offerings – including passion investments ranging from art advisory to vineyard and business jet acquisition financing.

It has also continued to invest in the franchise, benefiting from increased group-wide spending on electronic platforms. AUM and client growth have followed, with double digit growth over a multi-year period. A 3-to-1 relationship manager-to-investment specialist ratio helps ensure that client portfolios get the attention they deserve.

 

Best Private Bank, India

Kotak Wealth Management

 

Unlike most other countries around the region, many of India’s wealthy rely on a small number of onshore banking relationships. This may be one driver behind the consolidation witnessed in recent years, with only a handful of foreign players successfully penetrating the market – to the benefit of industry leaders like Kotak Wealth Management. The private banking arm of Kotak Mahindra Bank can claim more than 40% of India’s 100 wealthiest families among its client base. It has had to adapt to cater to their evolving needs, repositioning its model from a transaction to advisory focus over the past five years as well as deepening integration with the rest of the bank. Doing so has contributed to the past two years’ significant rise in the number of relationship managers employed alongside a more than proportional increase in support staff. It has also deepened its geographic reach, with expanding operations across nine of the country’s key cities which also act as bases to service additional locations. The turnaround has a multi-fold increase in AUM since 2008.

 

Best Wealth Manager, Japan

Mitsubishi UFJ Morgan Stanley PB Securities

 

The award period saw Japan’s Best Wealth Manager, Mitsubishi UFJ Morgan Stanley PB Securities (MUMS-PB), implement a smooth transition in ownership, highlighted by continued low levels of client account closures over the period. Established in May 2006 as a 50:50 joint venture between Merrill Lynch and Mitsubishi UFJ Financial Group (MUFG), the company became a wholly-owned subsidiary of MUFG when Japan’s largest lender acquired Merrill Lynch’s stake at end-2012. A 75% shareholding was then transferred to Mitsubishi UFJ Morgan Stanley PB Securities in March 2014, returning the company to domestic-foreign joint ownership, albeit with the foreign partner owning a smaller stake than in the earlier period. The model has proven to be a success, with the average client relationship increasing to nearly six years by end-March 2014, a remarkable feat given the joint venture is a little over eight years old.

 

Best Private Bank, Korea

Hana Bank

 

Hana Bank is recognized as the best private bank in Korea. Long a leader in customized solutions in particular, it has raised the bar across areas ranging from client servicing to succession planning. At the same time, deeper collaboration with the bank’s investment banking arm saw the launch of innovative products over the award period. AUM across wealth segments rose at more than double the rate witnessed in the year earlier period. In the ultra-high net worth category (which the bank defines as those with more than 100 billion won of assets), there was a 13.2% increase – triple the 3.9% pace of growth seen in the year ending March 2013. This segment accounts for 44% of high net worth AUM (those with more than 100 million won of investable assets).

Impressively, client numbers also increased by more than double the rate in the year earlier period – to 110,276.

 

Best Private Bank – Rising star, Hong Kong

Bank of China International

 

Bank of China International (BOCIL), as the first Chinese bank offering private banking services in Hong Kong, has capitalized on its unique competitive edges and understanding of the Chinese market to help high net worth clients capture opportunities worldwide from a China perspective.

It continues to see high growth rates in assets under management as it increasingly attracts clients from India and Europe in addition to its traditional bases in China and Southeast Asia. With close collaboration with the Bank of China group, it facilitates client access to a broader range of China opportunities.

It has gained the economies of scale that ensure sustainable development with a relatively lower cost-to-income ratio. Amid renminbi exchange rate fluctuations that were witnessed in the first quarter of 2014, its clients have demonstrated a solid appetite for renminbi-related products in which BOCIL played to its strengths. This development also reaffirms the positive outlook for the bank’s client base in the long term.

Best Private Bank – Rising star, Taiwan

Cathay United Bank

 

Cathay United Bank’s private banking franchise has seen very strong growth since its launch in March 2013 – both in terms of clients and AUM. The franchise is on a trajectory towards profitability, with AUM reaching US$800 million by end June 2014. Even more impressive, growth has come from new clients, rather than upgrading existing consumer bank customers to a VIP offering. Clients have been attracted by the broader range of collateral acceptable for credit extension alongside the strength of the parent company’s brand. Being part of the same group as the largest life insurance company in Taiwan enables the private bank to leverage market leading real estate appraisal services, as well as competitive pricing when it comes to sourcing investment products.