SINGAPORE (BLOOMBERG) - Bank of Singapore, which recently broke into the ranks of Asia's top 10 private banks, intends to keep hiring more relationship managers and focus on serving a wealthier bracket of customers to keep expanding its assets under management.
The unit of OCBC added 20 relationship managers in Hong Kong this year, taking its total to slightly more than 400, chief executive officer Bahren Shaari said in an interview on Wednesday. The minimum amount a client must keep with the firm to qualify for its private-banking services will eventually be raised to US$5 million (S$6.93 million) in a few years' time, from US$2 million currently, he said.
Under the 55-year-old's leadership, Bank of Singapore took over Barclays' wealth units in Hong Kong and Singapore last year, allowing it to end 2016 as the seventh-ranked private bank in the region in terms of assets under management, according to Asian Private Banker. The bank aspires to become top three in Asia for profitability, rather than just growing asset size, Mr Shaari said.
"We continue to hire and there's more in the pipeline, next quarter and the fourth quarter," Mr Shaari said, without providing specific figures. Bank of Singapore would consider more acquisitions of assets with "similar business" in its key markets, he said.
The bank is now focusing on bulking up Hong Kong, where it's looking to capture offshore money from China, he said, adding that the firm is avoiding the mainland Chinese market for now because of stiff competition there.
Bank of Singapore's plan to raise its client entry threshold to US$5 million will be gradual, with the bar rising first to US$3 million next year, he said. The move is aimed at boosting private bankers' productivity as they can focus on providing better services to fewer, high-net worth customers, he said.
"My view is that each banker by 2020 should manage about US$500 million, generating about US$5 million in revenue," Mr Shaari said. "That's what every banker should strive to achieve." He's spent three decades in the industry, including almost 13 years at UBS Group.
Standard Chartered's private bank also raised the minimum assets of clients to US$5 million this year from US$2 million. Such a trend in part reflects tightening regulation and compliance at financial hubs including Singapore and Hong Kong that's forced private banks to focus on higher-value customers.
Bank of Singapore had US$85 billion of assets under management as of March, Mr Shaari said, up from US$79 billion at the end of 2016.
Part of the increase during the first quarter came from high client investment activities, which also boosted the bank's revenue, he said, without providing the income figures. Investors' outlook on the global economy continues to be optimistic, Mr Shaari said, though he warned that complacency is the biggest risk in today's market.
"There are positive data but the markets seem to have taken in more than that," he said. "We need to be extra careful in terms of investment. We encourage clients to buy some protection against the downside volatility. Those are the things that we are advising clients now."