2016 AUM League Table

2016 AUM League Table

 

Asia’s (ex-China onshore) private banks rediscover growth momentum despite difficult 2016

Asia’s (ex-China onshore) Top 20 private banks by assets under management (AUM) collectively managed a record high US$1,554.4 billion of the region’s wealth at the end of 2016, according to Asian Private Banker’s 2016 AUM League Table. This marks an increase of 6.1% on 2015’s total of 1,464.4 billion and also recaptures past growth momentum after a 4.7% contraction in 2015.

Asia (ex-China onshore) AUM (US$ billion)

2016 RankChangeBank201620152014201320122012-2016 CAGR %2015-2016 YoY %
1-UBS Wealth Management   more info286.42742722452078.54.5
  • Publicly reported figures
  • Assets include those booked in Hong Kong, SG, Taiwan, Japan, China
2-Citi (incl. Gold, Private Client and Private Bank)   more info2182102552382100.93.8
  • APB estimates
  • Assets include those booked in India
3-Credit Suisse Private Banking   more info163.8150.4154131120.87.98.9
  • Publicly reported figures
  • Assets include those booked in Singapore, Hong Kong, Australia, Japan, India, Switzerland
4-HSBC Private Bank   more info108112112108914.4-3.6
  • Publicly reported figures
5-Julius Baer   more info82.475.178.7724317.79.7
  • APB estimates
  • Assets include those booked in India
6-DBS (incl. Treasures Private Client and Private Bank)   more info81.27573.254.64615.38.3
  • APB estimates
  • Assets include HNWIs with more than US$1m in investible assets
7 4Bank of Singapore   more info795551464316.443.6
  • Publicly reported figures
8 2BNP Paribas Wealth Management   more info7464.559.350.842.31514.7
  • APB estimates
9 2Morgan Stanley Private Wealth Management   more info71727065.2585.2-1.4
  • APB estimates
  • Assets include those booked in Australia
10 2Goldman Sachs Private Wealth Management   more info7059504537.516.918.6
  • APB estimates
  • 2015 total was restated by bank
11 2J.P. Morgan Private Bank   more info686562595654.6
  • APB estimtates
12 3Deutsche Bank Wealth Management   more info47.453.7105.0185.0184.31-13.4-11.7
  • APB estimates
  • Assets include those booked in India
  • 2015 total was restated by bank
13-Standard Chartered Private Bank   more info45454540.6356.50
  • APB estimates
  • Assets include those booked in India
14NEWUOB Private Bank   more info3226N/AN/AN/AN/A23.1
  • APB estimates
15-LGT   more info29.125.422.318.916.415.414.6
  • APB estimates
  • Assets exclude those booked in the Middle East
  • Assets exclude those from ABN AMRO acquisition
16-Hang Seng Private Bank   more info25252220197.10
  • APB estimates
17NEWBOC(HK)   more info25N/AN/AN/AN/AN/AN/A
  • APB estimates
18 1EFG Private Bank   more info22202119.518.54.410
  • APB estimates
  • Assets include those transferred from BSI Singapore
19-J Safra Sarasin   more info15.315.31512.412.94.40
  • Publicly reported figures
20NEWUnion Bancaire Privee   more info11.80.774N/AN/AN/AN/A1424.5
  • APB estimates
  • 2015 figure reflects pre-Coutts acquisition numbers

Total for Top 20 in Each Year

201620152014201320122012-2016 CAGR %2016-2015 YOY %
1554.41464.41536.5137611976.106.75

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The record high total was achieved despite a challenging market environment and regulatory tightening. Asia’s (ex-China onshore) private banks faced a sharp downturn in transactional revenues as clients shied away from uncertain markets. Some private banks saw as much as a 30% decline in brokerage volumes and structured product trading volumes were down 13.8% across the industry before the US election. Indonesia’s tax amnesty stimulated outflows from banks with Southeast Asian exposure and account regularization was widespread in anticipation of OECD’s Common Reporting Standard regime, which comes into effect in Asia in 2018.

UBS Wealth Management retains top ranking with US$286.4 billion in AUM and the Top 5 grouping of UBS WM, Citi (incl. Gold, Private Client and Private Bank), Credit Suisse Private Banking, HSBC Private Bank and Julius Baer remains unchanged in terms of positioning (although total client assets managed by the Top 5 increased by 4.5% YoY).

Even so, AUM growth at Asia’s private banks (ex-China) is not keeping pace with high net worth (HNW) wealth creation in the Asia Pacific region. Whereas the Top 20 increased its collective AUM at a CAGR of 6.5% (2012-2016), the region’s HNW wealth increased at a CAGR of 13.1% over the same period, with China and Japan driving this growth. Chinese investors are becoming more cognisant of the importance of international diversification; still, most Chinese wealth remains locked onshore to the benefit of domestic private banks and wealth managers.

Since 2012, the average AUM held by China’s Top 5 private banks (CMB Private Banking, ICBC Private Banking, BOC Private Banking, ABC Private Banking and BoCOM Private Banking) has increased at a CAGR of 27.0%, while the average AUM held by Asia’s (ex-China) Top 5 has increased at a CAGR of just 6.4%.

The biggest movers in 2016 were those banks that completed acquisitions. A private bank that pursued an inorganic growth strategy in 2016 grew its client assets in Asia by an average of 48.9% (although this figure is amplified by the Union Bancaire Privée-Coutts deal). Bank of Singapore (US$79 billion) climbed four spots to seventh on the back of its purchase of Barclays Wealth and Investment Management in Hong Kong and Singapore and Union Bancaire Privée, a new entrant in 2016, grew its AUM from US$774 million in 2015 to US$11.8 billion. LGT, which late last year announced that it would acquire ABN AMRO’s private banking business in Asia and the Middle East, expects to increase its AUM to US$40 billion.

By comparison, banks that depended on an organic growth strategy increased their client assets by an average of 5.1% YoY. Notable outliers are BNP Paribas Wealth Management (+14.7%), Goldman Sachs Private Wealth Management (+18.6%), UOB Private Bank (+23.1%) and LGT (+14.6%). Deutsche Bank Wealth Management, which endured a tumultuous 2016 both at the group level and regionally with the exits of key leadership figures, posted a 11.7% drop in Asia AUM to US$47.4 billion.

Pure play private banks grew their AUM at a faster clip than their universal counterparts, with four out of six pure plays in the Top 20 involved in M&A deals in 2016 (n.b.
LGT expects to see a boost to AUM in 2017 as a result of its ABN AMRO acquisition). In total, pure plays increased their collective book by 25% YoY to US$239.6 billion, while the private banking arms of universals grew by 5.4% YoY.

Asian private banks also outdid their international peers with the former notching up 20% YoY growth versus the latter’s 5.6%. While Bank of Singapore enjoyed the largest boost to AUM as a result of its Barclays acquisition and a referral deal with DZ Privatbank (+43.6%), Singaporean rivals DBS (incl. Treasures Private Client and Private Bank; +8.3%) and UOB Private Bank (+23.1%) also beat the international average.

Ones to watch

China Merchants Bank Private Banking
CMB Private Banking may be an onshore behemoth with an estimated US$239 billion in AUM, but the Chinese wealth manager is only now starting to make serious moves in Asia offshore and beyond. It will open a private banking centre in Singapore this month to complement its operations in Hong Kong and Luxembourg and a private banking centre in New York. Its low cost/income ratio and a group-wide determination to convert sticky onshore relationships into a sustainable offshore business, underpinned by a more mature approach to asset allocation, makes this Chinese private bank one to watch.

HSBC Private Bank
Notwithstanding global compliance issues, HSBC Private Bank – the true first mover in terms of banking Asia’s entrepreneurs – appears to be in revamp mode and is looking to exploit group-wide synergies in its ‘pivot to Asia’. The bank has already pinpointed the Pearl River Delta as a target market with group CEO Stuart Gulliver saying that he will hire 4,000 staff to bolster the business. More specifically, HSBC Private Bank is focusing on “serving the personal wealth management needs of the leadership and owners of the group’s corporate clients”, in the words of Gulliver. This strategy is well-evidenced by the recent appointments of Greater China corporate banking heavyweight Ivan Wong as its regional head of investment services and product solutions (in late 2015) and Siew Meng Tan as a regional head of private banking (from the commercial bank in 2016).

Standard Chartered Private Bank, Deutsche Bank Wealth Management
Standard Chartered Private Bank’s global profits slipped from US$99 million in 2015 to US$32 million in 2016 and client asset growth in Asia remained flat over the same period. This follows a major regional exercise that included the successful acquisition of renowned private banking veteran, Vivian Chan, and the restructuring of various parts of the business. One challenge the regional private bank faces is stability in management. Standard Chartered Private Bank has already gone through its third CEO in less than a decade.

Deutsche Bank Wealth Management faces similar challenges. At the group level, the bank posted a €1.4 billion loss for 2016 and announced that its managers would not receive individual bonuses for the year. In addition, the wealth management unit has suffered from a lack of stability after merging with the bank’s asset management arm in June 2012 before breaking up again in October 2015. Key leadership exits in 2016 will have put further strain on the business. Deutsche Bank is now planning to list the asset management arm to raise capital and bolster its balance sheet.

Union Bancaire Privée
UBP received a shot in the arm from its Coutts acquisition, effectively boosting AUM in the region from US$774 million in 2015 to US$11.8 billion in 2016. Since the acquisition, the bank has pared back operating costs and embarked on a slew of hires to bring in further assets. UBP’s leadership has set out some ambitious growth targets that include growing AUM from CHF 12 billion to CHF 15 billion in the short term and raising the Asian private banking business’s contribution to group revenues from 10% to 15-20%. Hiring alone may not be enough and, going by UBP’s track record, another acquisition could be on the cards.

UOB Private Bank
The quietest of the Singaporean triumvirate, UOB Private Bank has steadily grown its client assets by 50% and more than doubled revenues since September 2013. Under the leadership of Ong Yeng Fang (head) and Neo Teng Hwee (CIO) – both Julius Baer alumni – UOB established a discretionary portfolio management offering in 2016 and, according to Ong, is targeting a funds and DPM penetration rate of “40-50%”. With DBS and Bank of Singapore both acquiring in recent years, UOB Private Bank is looking to follow suit, although caution remains the mantra.

VP Bank
Having recently moved into a bigger office in Singapore, VP Bank has been forthright about its Asia ambitions after years of relative quiet. The bank says that it is expecting “significant inflows of client money” from the Singapore, Hong Kong, Indonesia, Malaysia, and Thailand markets and intends to hire 25 senior RMs per year over the next three years. Absent a licence in Hong Kong, VP Bank has been linked to Crédit Industriel et Commercial (CIC)’s private banking franchise in Asia, which received its Hong Kong licence last August. Still, VP Bank will need to acquire something more sizeable if it is to build meaningful scale in the near term.

Continue on to the 2016 RM Headcount League Table
 
 
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