Boutique private banks in Asia have come under fire this year as experts point to their tightening profit margins compared to the larger players and predict further industry consultation along the lines of UBP’s takeover of Coutts.
By contrast, big private banks are leveraging their big balance sheets to offer the corporate finance products that entrepreneurial Asian clients are now clamouring for. Credit Suisse has recently refocused its strategy to pull more of these business-owning clients, following in the footsteps of UBS.
Attracting new client assets should therefore be comparatively straight forward for client advisors at UBS, given their bank's size advantage (it's the region’s largest private bank by both assets and headcount). Not always. As the chart below from the firm’s third quarter results presentation shows, the net new income growth rate in Asia Pacific wealth management slumped from 13.1% to 1.8% between Q3 2014 and Q3 2015.
While Asian net new income is still above that of Europe, the decline does demonstrate the difficulties private bankers can face attracting new clients and hitting their revenue targets, even at UBS. For bankers new to UBS the problem is more acute. “As the largest private bank in a region where wealthy people often bank across several firms, they have a problem with client duplication. You join them, but some of your clients are already managed by your colleagues,” says a private banking headhunter in Singapore.
UBS names Asian investment banking heads. (Bloomberg)
Hong Kong short seller faces taste of own medicine. (Wall Street Journal)
Behold Macquarie’s shift from investment bank to asset manager (AFR)
Two-thirds of Asian business families want professional managers. (Business Times)
Asian managers add money into own hedge funds. (The Star)
Hong Kong slides down English proficiency index. (South China Morning Post)
Credit Suisse predicts baby formula and diaper sales boom in China. (South China Morning Post)
How banking is going digital. (Forbes)