North Asia’s private banking sector is observing a “golden moment,” fueled by increasing market strength and clients seeking diversification, private banking leaders said at the Asian Private Banker Summit 2025 in Hong Kong.

“It’s a rising tide in the markets. I think much of the work we have collectively put in as an industry over the last few years, along with the challenges in the Chinese real estate market and clients’ growing maturity in seeking diversification, has led to a golden moment for the private banking industry,” said Lok Yim, regional head of Global Private Banking (GPB), Asia Pacific, at HSBC, during the panel discussion Embracing uncertainty for the next era of growth on 14 October 2025.

The sanguine sentiment was shared across the panel. Michael Blake, chief executive officer, Asia, at Union Bancaire Privée (UBP), shared that about two-thirds of the firm’s net new money this year originated from North Asia.

“From a client segment perspective, private clients, of course, remain a core mandate, our bread and butter, but we continue to see a convergence between the private and institutional wealth space,” Blake said. 

Vincent Chui, chief executive officer, at Morgan Stanley Private Wealth Management Asia (Morgan Stanley PWM Asia), identified three primary factors driving the firm’s strong outperformance this year: geopolitics, which benefits firms with an established platform to help clients navigate the complex global environment and hedge their market risks; continued global investor enthusiasm for the AI ecosystem and the associated growth in data centre and related infrastructure investment products; and wealth creation arising from revival of Hong Kong’s IPO and block activities.

Specifically, on Hong Kong’s capital markets, he highlighted that the city has had a “banner year” in 2025 with massive IPO growth, stating that the firm’s strong position as a top investment bank in the US, Asia, and Hong Kong equity markets facilitates cross-selling opportunities and supports the broader industry’s focus on wealth creation from regional capital markets.

Striking a contrarian note, Yim added a bit of caution when asked about how the firm positions for a sustained momentum in the next 12 to 24 months. “I’m a little bit more worried, because it’s been so good and it can’t stay better,” he said. 

Yim outlined three key priorities for the firm going forward: focusing on risk management with clients, stressing the importance of time over timing, and supporting their entrepreneur clients by engaging the entire banking ecosystem regardless of market conditions.

Addressing the expected massive wealth transfer in Asia and succession planning – including the succession of businesses, not just family wealth – is another priority, Yim said. 

The private banking leaders also agreed that clients are maintaining substantial cash allocations, fuelled by strong net new money inflows and ongoing wealth creation. This significant “dry powder” and low system leverage provide optimism for future growth.

Differentiation in a fragmented market 

Intense competition remains the defining dynamic, complicated by the reality that many Asian clients are heavily multi-banked. In this context, Blake emphasised that the market remains “extremely fragmented”.

“We’re family-owned, and what we try to balance is we try to give our clients the flexibility that they would expect of a family office, combined with the balance sheet and the product expertise that you would expect from a global institution,” he said. 

Yim said HSBC’s differentiator lies in its integrated ecosystem – from the likes of asset management, commercial, and trusts – to serve entrepreneurial clients. Its key advantage is helping Asian clients connect globally, he added.

Meanwhile, Chui highlighted how Morgan Stanley PWM Asia targets ultra high net worth individuals in Greater China, and leverages the institutional strength of Morgan Stanley. By focusing its integrated platform on providing sophisticated diversification and hedging solutions in addition to standard wealth management, it gains a competitive edge, he said.

AI disruption

Private banks are now rapidly embracing artificial intelligence (AI) across their operations. But leading bankers maintain a cautious, or at times, sceptical, take on AI’s immediate application. 

In the US, Morgan Stanley Wealth Management is a strategic partner of OpenAI. In Asia, the firm has rapidly integrated AI internally. Personally, Chui thinks it will take more time to develop AI-based client-facing tools, particularly for investment advisory. “We would love to deploy AI directly to clients when it can demonstrably enhance alpha”, Chui said.

HSBC’s Yim said that overall productivity has not improved despite widespread AI use. Success requires AI to free up banker time for quality client conversations, which has not happened yet. He advocates prioritising back-end AI for operational and process improvement first, enabling relationship managers to enhance engagement quality.

UBP’s Blake, too, noted that few tools are ready for broad adoption with proven results, highlighting that the paramount concern is security.

Return to the investment fundamentals

The fundamental mandate for private banks involves balancing wealth preservation with the pursuit of alpha. As firms strive to deliver returns while ensuring robust downside protection, the critical question remains: which strategies prove most effective in sustaining growth while safeguarding capital?

UBP’s Blake observed a steady increase in client portfolios allocating to private markets and hedge funds.  Meanwhile, Yim said that the fundamental principles of investing have not changed, despite market complexity. 

Chui challenged traditional diversification methods, citing two main issues: geographic concentration, in which most large tech firms are in the US and China, and US macro risk.

He argued that true diversification now requires sovereign hedging, through, among others, gold and virtual assets, and concluded the private banking sector needs to evolve to adequately advise clients on these complex, modern challenges. “We are in uncharted territory.”

EQT to scale up private wealth AUM

For Swedish investment firm EQT, geopolitics has played in favour of the firm, according to Nick Thorn, managing director of client relations & capital raising. 

“Across institutional clients and our private clients, there’s a lot of people these days looking for Asia and Europe as a diversifier to their exposure in the US, and that’s been playing into our hands this year, definitely on the fundraising side,” Thorn said. 

Riding on the momentum, the firm has scaled up its distribution channels from five a year ago to 23 now. 

With €‌​​267​‌ billion (US$311 billion) in total assets under management as of 30 September 2025, EQT focuses on active ownership strategies, covering all phases of a business development, from start-up to maturity.

“On the investment side, in Asia in particular, we’ve actually seen a lot of competition reducing in our market segment, in the large cap buyout space, which is our flagship fund strategy,” Thorn observed. 

“There are fewer people going after the same deals, and so we do have a bit more of a competitive advantage in that front,” he said. “It’s exciting for us.”