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HSBC GPB and SCB Julius Baer vie for supremacy in Thailand’s onshore wealth boom

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Global private banks are racing to tap Thailand’s burgeoning onshore wealth market, as Southeast Asia’s second-biggest economy churns out UHNWIs at an accelerating pace.

Following steady economic growth in recent years driven by its thriving tourism sector and industrial base, Thailand counted 772 UHNWIs with assets in excess of US$50 million in 2020, according to Credit Suisse Global Wealth Report 2021. That growing pool of onshore wealth has caught the attention of many a global private bank.

A high-priority market

One bank targeting Thailand’s onshore market is Julius Baer. In March 2018, the Swiss pure-play formed SCB Julius Baer, a joint venture with Thai lender Siam Commercial Bank (SCB) to offer wealth management services to onshore clients.

While it was not the first to enter the market – as it arrived after Credit Suisse set up its onshore desk in 2016 – Jason Moo, head of private banking Southeast Asia and branch manager Singapore, told Asian Private Banker that Julius Baer identified Thailand as a “high priority” market from early on. “Our goal is to be a long-term partner to wealthy families and entrepreneurs, as well as to their future generations in the region.”

Jason Moo, Julius Baer

“The SCB Julius Baer joint venture combines SCB’s strong brand credibility and extensive local network with Julius Baer’s full suite of international wealth management capabilities and advisory services,” he said.

Moo highlighted that the onshore wealth of U/HNW clients with assets over THB 100 million (US$2.94 million) has grown strongly in recent years and is expected to continue.

“Growth for SCB Julius Baer is driven primarily by our entrepreneur clients, who benefit from our wide-ranging and sophisticated product and service portfolio, with a large portion being invested into discretionary mandates,” he added.

However, SCB Julius Baer is not the only global private bank to serve discretionary mandates in Thailand. Credit Suisse launched its DPM platform in October 2021 on the back of a newly obtained private fund licence. Edwin Tan, head of wealth management Thailand and head of advisory and sales, told Asian Private Banker at the time that Credit Suisse has made “significant inroads in managed solutions investments” in the region. Local player Kiatnakin Phatra Securities (Phatra) Wealth Management said it and other local private banks including have started providing DPM offerings to Thai clients.

Narit Kosalathip, Phatra

Phatra’s WM head Narit Kosalathip has told Asian Private Banker that “a lot of local players can now offer global investment in a somewhat similar manner to their global peers”, meaning that global private banks going onshore will need to find an edge.

Tapping ‘unbanked’ clients
That said, Moo believes SCB Julius Baer is “uniquely positioned” in Thailand, and the bank has seen “strong growth” over the years. “We are one step closer to our clients due to our commitment to the market, and today we are the only ones with a full-fledged operation on the ground, with deep local expertise and a strong global footprint.”

Due to its closeness with SCB, the bank can gain access to clients at SCB that are “unbanked” from an international viewpoint, he added. Broadly speaking, SCB Julius Baer can tap clients from SCB that wish to diversify their investment with offshore solutions.

SCB Julius Baer clients can have the same access to the same products and services as Julius Baer’s offshore clients, Moo pointed out.

“We are fully committed to Thailand and having a strong onshore strategy will be a priority for us. As such, we will continue to invest to deepen our capabilities and expand our footprint because we believe in the strong potential of the Thai market, where substantial wealth is still only invested onshore,” he asserted.

But SCB Julius Baer faces stiff competition. Asian Private Banker understands that a major European bank — having already hired a few Thailand onshore veterans ready to helm the business — will be launching its onshore Thailand business in 2H22.

Additionally, private banks such as Swiss pure-plays Lombard Odier and Pictet have tapped into the market through exclusive partnership with local banks — Kasikornbank and Bangkok Bank respectively — to offer investment solutions and provide strategic support for regional banks to grow their private banking business.

Bringing the ‘one-bank’ model to Thailand
For many years, HSBC GPB has been serving Thai U/HNW clients from Singapore and Hong Kong booking centres. The UK lender in 2021 launched its onshore private banking business in Thailand in view of the “greater flexibility in the financial markets supported by local regulators that welcome more offshore investment”, according to Saranya Arunsilp, country head of GPB, HSBC Thailand.

Saranya Arunsilp, HSBC

Without disclosing its current AUM, Arunsilp said the bank now has a team of RMs, investment counsellors and client service executives who are based in Thailand to deliver private banking services to its Thai clients onshore.

The ex-Kasikorn private banking head believes the value proposition that HSBC brings to the market is the “one-bank” model that the universal bank is proud of. “With HSBC, our clients will have access to our unparalleled international network and bring the full breadth of HSBC’s capabilities via a ‘one-bank approach’. These include market-leading expertise in wholesale banking, private banking and asset management.”

Unlocking synergies
Arunsilp added that the rising wealth in Thailand is driving aspirations and changing investors’ behaviours and preferences. This offers the bank opportunities to bring into play its network and expertise with greater potential.

“Thai U/HNWIs are more inclined towards wealth creation compared to wealth preservation and their investment appetites in recent years have been shifting from deposits to more diversified portfolios, including funds and offshore investment,” she said. “Our private banking service is bespoke and we provide access to the widest range of investment products — including alternative investments, wealth planning services, succession planning and trusts.”

Arunsilp highlighted that the private wealth market in ASEAN as a whole is closely tied to business endeavours, and the strengthening of intra-regional trade is expected to accelerate international expansion, people and wealth flows, even in the aftermath of the pandemic.

“Through our in-house manufacturing capabilities and strong collaboration between the whole group, we believe we are able to grow our onshore private banking business by unlocking these synergies, enabling us to offer a distinct and relevant private wealth offering to our clients in Thailand.”