Private Banker International has announced the 2016 PBI Top 20 Asia-Pacific Assets Under Management (AUM) Rankings at the Private Banker International Global Wealth Summit 2016. This year’s survey shows that restructuring and M&A activity has slowed down the overall AUMs of private banks in the region.
Total AUM in Asia Pacific decreased by approximately 4.6% to USD1,461.5bn in 2015, compared to USD1,528.6bn at the end of 2014. The drop also comes in strong contrast to the 12% rise in total AUM in 2014.
The Private Banker International study, which ranked private banks by AUM for high net worth (HNW) clients with investable assets of more than USD1m, saw UBS claim the top position for the fourth year in a row as the largest private bank in the region. However, the Swiss bank only saw a 1.1% increase in AUM year-on-year to USD275bn in 2015, compared to the 11% increase in AUM to USD272bn in 2014.
There were no changes in ranking among the top four banks from the 2014 survey as Citi Private Bank (with USD210bn in AUM), Credit Suisse (USD152bn in AUM) and HSBC Private Bank (USD112bn in AUM) claimed the 2nd, 3rd, and 4th spots respectively. Citi Private Bank saw a notable 17.6% drop in AUM from 2014 to 2015 and, according To Citi, this owed primarily to the sale completion of its Japan consumer banking operations in November 2015.
There were a number of noteworthy changes across the rest of the rankings. DBS Private Bank claimed a spot among the top 5 banks in the 2016 rankings with USD79bn in AUM for HNW clients. Julius Baer, BNP Paribas Wealth Management and Morgan Stanley also moved up in the rankings, with strong results year-on-year.
On the other hand, Deutsche Bank Wealth Management fell five places in the 2016 ranking to 10th spot due to its decision to separate its wealth and asset management businesses (the 2015 ranking included asset management figures). JP Morgan Private Bank saw its AUM shirking in APAC by a hefty 28% to USD65bn in 2015 from USD90bn in 2014. It merged its private wealth management and private banking businesses, cut approximately 5% of its workforce in the region and also announced the increase of its client threshold from $5m to $10m earlier in 2016.
Private Banker International’s Editor, Meghna Mukerjee, said: “This year’s rankings show lacklustre growth in the region as several big banks’ AUMs have regionally flat lined or even decreased.
“Consolidation has been a major theme for private banks operating in APAC over the last 12 months, with EFG International taking over BSI, Deutsche Bank and UBS pulling back from their wealth management businesses in Australia, HSBC closing its private banking unit in India, and most notably, OCBC acquiring the wealth and investment management business of UK-headquartered Barclays in Singapore and Hong Kong. The regulatory environment has not been easy to navigate for these banks either.”
Mukerjee added: “However, despite the challenges posed by consolidation and increased regulation, Private Banker International’s research reveals that the medium term prospects for private banking in Asia remain encouraging. Wealth generation is continuing in a robust way in the region providing several opportunities for private banks and wealth managers to gain increased share of wallets. Productivity, risk management and quality of service should be key focus areas for top tier banks, with more importance being placed on efficient processing and investment knowledge of front-line staff.”
Local private banks in the region continued to gain momentum in their year-on-year AUM figures, with DBS Private Bank seeing an 8.2% rise in AUM, Bank of Singapore (BoS) seeing a 7.8% rise in AUM and UOB Private Bank seeing approximately 4.6% rise in AUM. Among the foreign banks, LGT showed strong signs of growth with a 13% increase in AUM year-on-year to reach USD25bn in 2015.
Further research from Private Banker International indicates that wealth management engagement through digital channels in Asia will continue to rise significantly. The digitisation of wealth management will be a key enabler for banks to enhance their position as a trusted advisor to clients
Diversification will also continue to be a key investment theme with clients getting increasingly sophisticated and noticing the benefits of diversifying portfolios that had traditionally been dominated by stock holdings.