Private Banking Asia: AUM Ranking

Asia

Asia, the growth market of recent years isn't what it used to be: assets under management at the biggest wealth managers are mostly flat, albeit at a high level, a ranking by finews.asia shows.

Asia Pacific (APAC) remains an economic powerhouse compared with other regions, but not all banks are profiting equally from the growth, which has displayed signs of abating. After years of more-better-faster, euphoria has run its course.

The drop in equity prices on China's stock exchange in the late summer of 2015 was a sure sign that things were about to change for the worse, pulling down the region in its wake. A lot of Asian investors lost good money and have kept to the sidelines since – a development that has left its mark on the results of the banks last year.

UBS – Fighting for Growth

Hence, assets under management at a lot of institutions grew only marginally last year, the results of the ranking by finews.asia reveal. And yet, there are substantial differences (changes compared to 2014).

  1. UBS Wealth Management $284 bln (+4,4%)
  2. Citi Private Bank $210 bln (not comparable)
  3. Credit Suisse Private Banking $157 bln (+8,2%)
  4. HSBC Private Bank (GPB) $112 bln (unchanged)
  5. Deutsche Asset & Wealth Management $106 bln (+8,1%)
  6. J.P. Morgan Private Bank $94 bln* (+4,4%)
  7. Morgan Stanley Private Wealth Management $86 bln* (+22,)%)
  8. BNP Paribas Wealth Management $73 bln* (23,7%)
  9. DBS Private Bank $71 bln** (-2,7%)
  10. Julius Bär $65 bln* (-13,3%)
  11. Standard Chartered Private Bank $61 bln*** (+32,6%)
  12. Bank of Singapore $55 bln (+7,8%)
  13. Goldman Sachs Private Wealth Management $50 bln**** (+11,1%)
  14. Barclays $36 bln (unchanged)
  15. LGT $26 bln (+16,6%)
  16. EFG International/BSI $25 bln (+38,9%)
  17. ABN Amro Private Banking $22 bln* (+7,3%)
  18. J. Safra Sarasin $16 bln (+6,7%)
  19. RBC Wealth Management $14 bln* (+7,7%)
  20. Union Bancaire Privée/Coutts $13 bln (new)

Notes:

  • 1 CHF = 1.04 USD
  • 1 EUR = 1.34 USD
  • 1 SGD = 0.74 USD
  • *           estimate
  • **         clients with investable assets of S$1.5 million and above
  • ***       figure from mid 2015, different counting
  • ****     estimate, clients with net worth over $100 million
  • *****   after acquisition of BSI Bank

Of particular interest is the fact that UBS, the world's No.1 wealth manager, has dropped behind growth expectations last year. The Swiss banking giant has a tough time expanding its wealth management business further. It comes as little surprise then that its management is mulling to also offer its services to the affluent customers, people with less than one million dollars on their accounts.

Credit Suisse (CS) meanwhile, much-maligned at home and with a massive loss for 2015 to its book, is doing rather well in Asia, recording the biggest increase in new money of all companies researched by finews.asia. LGT, the bank of Liechtenstein's principal family, is also doing well, but at a lower level than CS. Evidently, wealthy Asians trust that the Prince of Liechtenstein knows what he's doing with his (and their) money.

Sold to a Local Competitor

Some other banks clearly are struggling, showing that the economies of the east, from Singapore to Hong Kong and Shanghai, know more than one direction. The Asian businesses of Barclays and Standard Chartered for instance seem not profitable enough – Barclays has put the division up for sale.

Local banks, such as DBS, OCBC (Bank of Singapore) and UOB, are showing their interest in taking over. After years of building their business, they have started putting up a proper fight in the competition with the Western banks active in their markets. To do so, they started buying private-banking units of companies pulling out, an example of which was the transaction between DBS and Société Générale. The Barclays Asian business is also likely to be sold to a local competitor soon.

Pure Player Development

It will be interesting to watch the development of the so-called pure players, the institutions which concentrate on private banking. Julius Baer for instance seems to have entered a cooling down phase in its «second home market», analysts said. Union Bancaire Privée (UBP) by contrast is on a roll, following its acquisition of Coutts Bank International. Previously, UBP wasn't that active in Asia.

The joint forces of EFG International and BSI will also be put to the test. BSI however is still smarting from its involvement in the scandal surrounding the 1MDB state fund of Malaysia, putting a damper on its potential in Asia.

Building Private Assets in China

Domestic Chinese banks have also been strongly building their private assets under management. Although their wealth product offerings are restricted the banks have attracted substantial assets. However we have not included them in our research due to the vast majority of their business being predominantly oriented to the domestic onshore China market. 

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