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?

Macro challenges impact private banks globally and are not specific to Asia. We are working with clients in one of the largest and most dynamic wealth markets in the world, home to more billionaires than any other region. In fact, Asia is projected to overtake the US for financial wealth by 2025.

In 2024, macro uncertainties provided an opportunity for us to work even closer with our clients to conduct strategic reviews and address their investment portfolio and succession risks, which is critical in a less deterministic environment. With two-thirds of our private banking clients also being business owners, we were able to leverage our robust corporate and investment banking platforms to support their growing business needs through our distinctive One Bank proposition. One of many recent examples is as follows: our equity capital markets (ECM) team is presently advising a UHNW private banking client, who also owns a medical equipment company, on the company’s IPO and the possibility of a dual listing with a value exceeding US$300 million.

Throughout 2024, our clients further entrusted DBS Private Bank as their integrated adviser on their holistic wealth, business and legacy matters. Our booking centres in Asia stand out as key landing points and our clients, who hail from more than 120 jurisdictions, can access Asia’s vast opportunities in addition to our global offering.

These structural business tailwinds, along with benign macroeconomic conditions and heightened investor confidence, drove our wealth management franchise’s fee income to a new high. Our 3Q24 wealth management fee income rose 55% as compared to the same quarter last year; 9M24 wealth management fee income rose 47% as compared to the same period in 2023. Our holistic proposition is underscored by our strong capital base, digital leadership, prescient investment insights, and strong track record of being Asia’s safest bank for 16 consecutive years.

In 2025, Asia will continue to build its reputation as a safe haven for private banking assets, as clients will be increasingly focused on the return of their capital, versus return on their capital.

With a best-in-class ‘phygital’ wealth management platform, DBS is the first port of call for these clients, and for reasons beyond safety. We will continue to work with UHNW clients all over the world looking to have a presence in Asia to leverage wealth flows into the region and take advantage of attractive investment opportunities.

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?

In anticipation of trade tensions re-igniting next year, we stay overweight in bonds of high credit quality. This decision is backed by what happened in 2019 during the first Trump presidency, when tariffs were imposed on Chinese goods and global growth took a hit. This led to the Federal Reserve cutting rates, resulting in strong total returns on bonds.

We are neutral on equities. However, across the regions, we continue to believe US equities will outperform. This is due to their disproportionate exposure to ‘I.D.E.A.’ – Innovators, Disruptors, Enablers, Adapters – companies, which include a majority of tech and AI companies that are beneficiaries of a world digitalising at an unprecedented rate.
We have also been advising our clients to put cash to work by adopting a ‘barbell’ approach to their portfolio allocation. This involves balancing income-generating assets on one side and growth equities on the other, with a small allocation to alternatives such as gold. On the income side, stay with longer duration, investment-grade bonds and add Singapore REITs for their attractive dividend yields.

It is essential that portfolios hold high-quality companies as they would hold up against an environment of slowing growth brought about by an escalation of ‘tit-for-tat’ trade tariffs. We also advocate for diversification across holdings. Investment grade bond funds, which hold hundreds of well-researched underlying securities, are much preferred to holding a limited number of single-line bonds. On REITs, ensure diversification across the various sectors of retail, commercial, industrial and hospitality. Such an approach would enable the portfolio to harness superior yields over cash deposits or T-bills.

Clients can also invest in our in-house “DBS CIO Barbell Strategy”, which we launched five years ago. As of November 2024, this strategy has outperformed its peers, putting it in the top 5% of its category of global balanced funds.