UBS Is Largest Private Bank In S'pore, HK: Study

Source : The Straits Times, Mar 12, 2008

DBS is No.6 with 5% of private banking assets in Asia ex-Japan

SWISS banking giant UBS has been crowned the biggest private banking player in Singapore and Hong Kong.

It manages one-sixth of the US$600 billion (S$833.7 billion) of private banking assets in Asia, excluding Japan, which are mostly parked in the two Asian wealth management hubs.

The finding comes from the first-ever private banking league table compiled by an independent party - consultancy Calamander Group - in Hong Kong and Singapore.

The rankings confirmed conventional wisdom that the big guns of Citigroup, HSBC, Credit Suisse and Merrill Lynch would be in the top five.

But it may surprise some that home-grown DBS Group Holdings has come in at No.6 with a 5 per cent market share, trumping major global players such as JPMorgan.

Local rivals United Overseas Bank and OCBC Bank trail behind, each managing US$5 billion of assets compared with DBS' US$30 billion. DBS has 'done well', quadrupling its assets under management between 2001 and 2006, said Mr Roman Scott, the managing director of Singapore-based Calamander.

Its growth is driven partly by its high profile in the fast-growing Singapore market, which Mr Scott estimated comprises private banking assets of more than US$250 billion.

The ranking lists ballpark figures about private banking players in Asia, which have tripled the assets they manage from US$200 billion five years ago.

Mr Scott said the table is 'conservative', with an accuracy of plus or minus 10 per cent, and excludes some newer entrants, such as Switzerland-based EFG and Standard Chartered.

Unlike five years ago when the Singapore and Hong Kong markets were so fragmented that the top five players barely held 10 per cent of the pie, five mega banks now dominate 55 per cent.

UBS is still the 'standout team, tripling its size from five years ago', said Mr Scott.

DBS has climbed to the top of the mid-tier group with its strategy to be an Asia-focused private bank and attracting many newly rich Singaporeans, non-resident Indians and Indonesians, he added.

But mid-tier rivals such as Deutsche Bank and Morgan Stanley have been growing at an even faster pace, so DBS may not maintain its lead for long, he said.

While Hong Kong's pool of wealth is larger at about US$350 billion, Singapore has been attracting more new private banking accounts in recent years. The country has about 40 private banks. Their rapid expansion has ignited a battle for talent and caused office rental rates to skyrocket.

Singapore's efforts to transform itself into a wealth management hub for the region by offering lower corporate and personal taxes, and maintaining strict banking secrecy laws, have earned it the title of 'Switzerland of the East'.

But it can now also be called 'Monaco in the tropics', as its high-end residen-

ces, upcoming Formula One race and casinos will offer a lifestyle that suits the mega-rich, said Mr Scott.

Of the US$250 billion booked in Singapore, about 15 per cent is held by local wealthy clients, he added.

The number of millionaires in Singapore shot up by 11,000 people, or 21.2 per cent, last year - the fastest growth rate in the Asia-Pacific and one of the fastest in the world, said a 2007 Merrill Lynch-Capgemini report.

The remaining 85 per cent of private banking assets in Singapore are held by Asians, as well as people of other nationalities, said Mr Scott.

Indonesians hold more than US$105 billion in Singapore. Only about US$17 billion, or 7 per cent of the total pool, is held by Europeans and Russians, Mr Scott added.

A more controversial issue in Singapore's private banking sector is the inflow of European money. Last year, the European Commission put pressure on Singapore to ease its banking secrecy laws.

It also raised concerns that the country has become a shelter for funds exiting the European Union after its member nations slapped a withholding tax on offshore savings of EU citizens.


MAIN DRIVER

DBS' growth is driven partly by its high profile in the fast-growing Singapore market that comprises private banking assets of more than US$250 billion (S$347 billion), says Mr Scott.