The Asia-Pacific private banking industry has leapt ahead in the past 12 months after total assets under management (AUM) had flatlined in 2011.
Total AUM in the region jumped 16% to $1,172 billion in the year to 31 December 2012, up from $1,008 billion in 2011.
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The number one bank in 2012 was Swiss powerhouse UBS, regaining the top spot it lost to Citi Private Bank in 2011. Both banks managed to increase their AUM over the twelve months but UBS were more successful with a total AUM of $215 billion versus $210 billion for the US bank.
In third place was Credit Suisse but the gap between them and the top two was nearly $100 billion.
At current growth rates the chances are the Asian market will continue to be a two horse race for the foreseeable future.
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By GlobalDataIn the top five only one bank failed to grow, HSBC, who lost ground to Credit Suisse and also dropped 22% or $29 billion in AUM in 2012 versus 2011.
This is the second year where the bank has lost AUM which may be linked to its well documented ‘slim-down strategy’ and market rumours around a potential sale of the private banking business.
Julius Baer’s purchase of the Merrill Lynch (ML) business was not included this year since the transition of the Asian business is yet to be complete.
Once the ML integration is complete, PBI estimates Julius Baer’s AUM could rise to $90-100bn, putting it into the top five APAC private banks.
HSBC’s loss may have contributed to the top three’s healthy gains in combination with the fact that all three of the top players have substantial investment and commercial banking arms.
In our Singapore country survey we found that a key path to growth in the region had been an ability to show clients more than just a wealth management platform.
Looking further down the table, Barclays Wealth made significant increases in its AUM, up 20% to $30 billion.
An Asian advantage
The only banks that could compete with Barclays in gains were Asian headquartered banks. The leading Asian bank, Singapore’s DBS, gained one place on the PBI Asia-Pacific Benchmark this year as it stretched past BNP Paribas and gained $7 billion or 17% more in assets over the year.
It was an even better year for the other Singaporean headquartered bank, OCBC, who managed to add $11 billion to its AUM over the same period, a 34% growth.
But if you weren’t one of these banks then adding AUM was almost as much of a struggle as 2011 had been.
Coutts were down 7% or $1 billion, dropping from 17th on the table to 19th.
Sarasin also dropped two places to 17th below EFG and ABN Amro as they failed to add AUM.
Even Standard Chartered struggled to gain any AUM in a region it calls home. Contrary to PBI’s forecasts last year, it seems that Asian investors are increasingly willing to use private banks. Growth, at the top of the table at least, has been more than respectable.
At the bottom of the table things are a little different. The question is how long will some of the bigger players have the patience to invest in an expanding Asian market with little in the way of growth to show for it?
Already Societe Generale has had to deny rumours they are eyeing an exit from the APAC market and market speculation is they may not be the last.
