Private banks have good reasons to expect a huge upsurge, if not a flood, in demand for their services. But market growth alone would not guarantee success to a private banker. The key issue is strategy, and this may have to be different from the centrally-driven strategies of banks headquartered in Europe or the United States. Can banks manage to identify the right mix and formulate winnable Asia specific growth strategies for themselves?Markets in Asia differ from each other in terms of types and attitudes of the wealthy, the policy framework and economic situation. "Private Banking in Asia" looks at each of the major Asian markets (ex-Japan), which are Singapore, Hong Kong, China, South Korea, India, Malaysia, Thailand and Indonesia. It examines the broad categories of high net worth individuals in different countries, and assesses what kind of services Asian HNWIs expect from their private bankers. The book looks at the present size of the market, studies the levels of penetration by private bankers and assesses the potential for growth.But the crucial issue is not how much wealth is being generated but how much is made available to the private bankers. Who gets what part of the cake is another issue. Banks that provide high returns in the short term stand a good chance to forge ahead of their rivals because Asian clients tend to look at absolute returns on annual or six-monthly basis. The report discusses how the private banker is often under pressure to perform in the short and medium term as well as avoid erosion of capital, and this has thrown up new challenges for manufacturers of structured products.The report examines the characteristics of the market by studying the patterns of savings and investments in different countries. It also analyses the political systems that make offshore banking nearly impossible in most Asian markets with exceptions like Hong Kong, Singapore and Japan. That private banks have found ways to attract portfolios of people residing in countries with stringent foreign exchange controls is a sign of the ingenuity of private bankers and also the desperation of some clients who wish to protect and grow wealth overseas.Identifying the contours of the Asian market at a given time is a task in itself; tracking its constantly changing characteristics and devising a workable action plan can be a surreal experience."Private Banking in Asia" acts as a forum of dialogue and discussion on the different approaches adopted by private banks to deal with a wide range of clients, and prepare themselves for expected upturn in market size and business volumes. The purpose is to identify and assess the various factors that go into the making of growth strategies, and examine whether private banks need to work out Asia specific strategies that may be miles away from their practises in Europe or the United States.The book is the result of interviews with industry players and independent research by the author to pinpoint promises and threats inherent in the market. The book profiles the markets in different countries and the market players. It also examines some of the tricky issues that are bothering the industry like issues of due diligence and staff poaching.The author discusses the risk appetite and investment attitudes of the Asian rich, and how private banks are trying to meet their needs. It studies the different portfolio management formats, and looks into the allocations on alternative investments like hedge funds and structured products. It looks into the issue of average returns, and discusses the issue of management fees and transaction related commissions.
Table of Contents
1. Introduction. Recovering from the Asian crisis. Changing political and business scenarios: brief profiles of the countries covered in this report. 2. Country profiles: Market profile by countries. Important yardsticks: currency exchange rates, interest rates, foreign investments and GDP in different countries of the region. Singapore: holding the South Asian fort. Hong Kong: repositioning itself. China: awakening of a giant. South Korea: untapped bounty. India: land of promise. Malaysia: centre of Islamic finance. Thailand: harvesting nouveau-riche. Indonesia: exporting wealth. 3. The financial markets. Patterns of savings and investment. Maturing of financial markets and regulatory changes. Linkages among markets within Asia and the outside world. Securities market: size, trends and the huge variations among different markets within the region. The banking industry. How the laggards are catching up with the best in Hong Kong and Singapore. How retail banks are posing as wealth managers. 4. The market. Wealth creation in Asia: a historical prospective. Estimates of size and potential; the level of penetration by private bankers. Broad HNWI categories and their characteristics. Traditional wealthy families: overseas Chinese traders, old business families, royal families, politicians and their scions. The new entrepreneurial class. The professionals and westerners settled in Asia. The would-be HNWI among the mass affluent. The role of property and stock markets in wealth creation. The offshore, onshore divide. 5. Portfolio management. Different styles and flavours. Stocks dominate Asian portfolios. Hedge funds causing ripples. Bonds-dull but necessary. 6. Money Laundering and Private Banking. The hardening challenge: the increased pressure on due diligence and know-your-customer. The regulator's viewpoint. A discussion on different regulators look at the business. Views of private bankers. Does this mean a serious loss of business? 7. Private banking strategy. Strategies adopted by important players. Credit Suisse. UBS. Citibank. HSBC. SG Private Banking. BNP Paribas. EFG Bank. Strategies of Asians banks that are just entering the business. DBS. UOB. Client servicing strategies: a discussion covering issues like. Understanding the unique requirements of diverse clients; is it possible to categorise them? Similarities and dissimilarities between European and Asian clients in terms of their needs. Are European and US banks offering something special and different in Asia from what they do in their home markets? Meeting the non-financial needs of Asian clients. 8. Conclusion.