Q1: Private banks in Asia have faced a number of challenges in 2024, from uncertainty around interest rate cuts in the US to volatile markets and geopolitical tensions. Considering this background, how did you safeguard AUM and revenue streams in 2024, while also attracting net new assets? What will your strategy be in 2025?

Despite these challenges in 2024, CTBC successfully safeguarded AUM and revenue streams while attracting significant net new assets, thanks to our deep market insights and a robust team of professionals. In 2024, we observed a strong demand among HNW clients in Taiwan to diversify their asset locations to Singapore and Hong Kong.

Looking ahead to 2025, the focus of private banking services will shift further towards family succession planning. With clients predominately aged 55-75, there is a heightened interest in trusts, family offices, insurance plans and other wealth planning solutions. To address these needs, we will continue to enhance our sales services and operational platforms, boost team efficiency, and integrate specialist resources across countries to deliver seamless, one-stop solutions.

We remain optimistic about the private banking market in 2025 and are confident that CTBC will continue to meet the diverse needs of our clients with exceptional professionalism and service.

Q2: How are you advising clients in terms of investment opportunities in 2025? Which markets and asset classes will provide the best opportunities? And how can clients balance leveraging these opportunities while managing risks to their portfolios?

We expect returns in fixed income, equity and alternative investments to exceed cash returns in 2025. We suggest investors fully invest as the cash return has begun to drop and it is expected to go down further.

While we maintain a neutral allocation to equities, we expect positive returns for global equities in 2025 under a softer but still resilient global macroeconomic backdrop. For equity, our base case is a US soft landing scenario. We expect US equities may continue to be supported in 2025 as the Federal Reserve has entered an easing cycle, which should remain the case until a neutral rate is reached.

With Republicans winning the House alongside the Senate and presidency, we expect the new Trump administration to push many of its pro-growth agenda and policies through legislation in January. However, given that the valuations are relatively stretched, we suggest clients utilise structured products to provide themselves with downside protection while obtaining some yield. In addition, we also recommend having some quality stocks with high dividends as part of a defensive strategy within the portfolio.

Outside of the US, Japan remains our top pick in terms of global equity markets because of its governance reforms to increase corporate return on equity. We expect the Bank of Japan will continue to normalise its monetary policy due to more persistent inflation which should support our view for a stronger Yen against the USD even if the timing has been delayed.

For fixed income, we suggest investors build and maintain bond exposures to lock in yields. With the already tightened high yield spreads, we prefer investment grade bonds over high yield. In terms of duration, the intermediate duration, around five years, looks the most appealing to lock in yields and benefit from the steepening yield curve.

The US dollar reached a two-year high after the US election. We believe the USD, while overvalued, should stay strong with market pricing in a protectionist and higher growth Trump agenda. We do expect the USD to weaken into the second half of 2025 with the Fed rate cut cycle continuing and Trump’s desire for a weaker dollar to maintain US international competitiveness.

The biggest risks in 2025 would be policy risks and geopolitical uncertainties. Existing wars and potential expansion or new conflicts remain noticeable risks. The just-elected US Trump administration is poised to launch new tariffs, policies and agendas which may trigger new waves of trade tensions and geopolitical uncertainties. To best mitigate some of these risks, we think relatively uncorrelated asset classes such as alternative investments would be the best solution for our clients. Private equity and private credit have significantly outperformed traditional asset classes in recent times. We believe hedge funds and private markets as an asset class will be able to offer diversification and relative value compared with traditional publicly traded equities and fixed incomes. We recommend our clients increase their alternative/private markets allocations to at least 10%-15% so as to provide some protection during unexpected financial market turbulence.

Q3: China’s announcement in 2024 of a series of monetary and fiscal stimulus measures has helped re-energise the world’s second-largest economy, bringing optimism and momentum to the market. What opportunities has this created for your bank? How would you advise clients when it comes to investing in China?

We believe China’s economy has bottomed out, but the timing of recovery from the deep property crisis remains challenging. The series of monetary and fiscal stimulus measures announced in September and October showed the central government’s determination to achieve an annual GDP growth target of around 5%. However, we continue to expect the central government will need to provide more substantial and further support, especially for the property sector and domestic consumption, before overall investor sentiment can turn around. Any sign of housing sales and price stabilisation could be supportive for Chinese equities.

In the short term, we see tactical opportunities for clients to participate in technical rebounds with any improving economic data and ongoing support from the government, such as the direct buying of equities by government agencies and the issuance of government bonds to support the domestic economy.

Further stimulus, fiscal spending, supportive policies, attractive valuation and investors’ light positioning are all positive factors. The recent US election result, China’s real estate sector, deflationary signs, slower-than-expected growth pick up, and the relationship between China, the US and other Western countries, remain as risks.

Q4: In 2024, the private banking industry witnessed organisational restructurings, leadership reshuffles, as well as heavyweight departures. Looking forward, what are the priorities for your private bank in terms of attracting and retaining talent across the front, middle, and back office? What measures do you have in place for managing personnel transitions?

At CTBC Private Bank, our endeavour to attract and retain top talents with a good cultural fit across the front, middle and back office is key to ensuring sustainable growth.

For our frontline teams, we continue to expand the headcounts to cover the Greater China and Southeast Asia markets. By providing an inclusive working environment and supportive commercial banking networks, we aim to offer a unique platform to attract RMs with deep market expertise to better serve our clients

We also appreciate the importance of maintaining stability during personnel transitions. To manage such changes, we have implemented robust handover protocols and comprehensive training programmes to ensure service continuity and operational efficiency. We also identify and nurture successors for all senior managers to alleviate the impacts of key personnel departures.

Q5: Much hype has been made about the transformative potential of artificial intelligence. What opportunities does AI present to your financial institution, and how does it fit into a broader strategy of technological upgrade and digitisation?

AI holds transformative potential for the financial industry, and we are embracing this technology as part of our broader strategy for technological upgrade and digitalisation. Our bank’s development strategy is “inside-out” – first empowering our employees, then enhancing customer experience.

By leveraging AI, we enhance employee productivity, freeing up time for more value-added tasks, while AI-driven client assistant services boost sales efficiency. This approach not only streamlines our internal operations but also strengthens customer relationships, providing a smoother and more personalised experience.