Singapore: The private banking arm of Singapore’s DBS expects 20 to 30% annual growth in net new assets from China, Indonesia and India, as it gears up for expansion in Asia’s fastest-growing markets for millionaires.
DBS, Southeast Asia’s biggest lender, is competing for market share against UBS and boutiques like Swiss wealth manager BSI in a region that is outpacing growth in the United States and Europe.
“We’re opening 5-10 accounts every day right now in the private bank,” Su Shan Tan, DBS’s group head of wealth management, said at the Reuters Global Private Banking Summit.
She said as a strong Asian bank which has weathered the financial crisis extremely well, DBS was poised to take advantage of new wealth creation in the region.
“We want to be there from cradle to next generation,” she said at the Thomson Reuters office in Singapore.
“The high delta or the high growth markets right now are clearly China, Indonesia for Southeast Asia, and India... So those are our key focus areas right now.”
Tan, a former Morgan Stanley and Citi banker who joined DBS in July, said the bank has set up two teams in Singapore to target rich Indian clients and hopes to have five to six bankers by the end of the year for that segment.
DBS is also looking at the possibility of starting onshore private banking in India after it expanded onshore in China, while Indonesian clients will be targeted from Singapore.
But Tan said the biggest risk facing the wealth management industry is poaching, as bankers move from one bank to another, boosting cost-income ratios for banks.
“I think we have to look beyond the rotating RMs,” she said about relationship managers.
Tan said she has hired people from the buyside, corporate banking, investment banking and private equity.
“Some of the RMs are selling their books right now, but you’ll find that if they keep rotating, their book doesn’t move with them. After a while clients are tired of being churned.”
Tan said the private bank, which holds close to S$35 billion ($27 billion) in client assets including debt, could see double-digit annual growth in assets overall over the next few years.
DBS was looking to launch a new fund for its private banking and affluent clients that will look at investment opportunities from rising real income in China, she said.
The income increase will see China’s citizens invest in schooling, healthcare, internal travel and consumer durables, Tan added.