DBS Group Holdings plans to increase the number of relationship managers in its private banking business to tap into surging Asian wealth.
Headcount will rise between 10 per cent and 20 per cent this year - after increasing more than 20 per cent last year - adding to a team that currently comprises 200 private bankers, said Mr Lawrence Lua, deputy private-banking head, in an interview in Singapore yesterday.
Hiring will be spread across the three main teams covering South-east Asia, North Asia, and international markets plus Indians living abroad.
"Our clients, the wealthy, have grown their businesses. They have cash flow, more liquidity," he said. "The market has been kind" and DBS is beefing up its headcount to capture more of this wealth, he added.
Asia-Pacific wealth managers have benefited from the region's growing prosperity, with wealth rising faster than North America and Europe. Assets owned by rich Asians rose 8 per cent in 2016 to US$18.8 trillion (S$24.5 trillion), led by South-east Asia and Greater China, according to a report from Capgemini. It forecast an increase to about US$40 trillion by 2025.
DBS ranks sixth among the biggest private banks in Asia-Pacific outside of China, a sector dominated by UBS Group, Citigroup and Credit Suisse Group, according to the Asian Private Banker. DBS' assets under management grew 15 per cent each year from 2012 to 2016, the data show.
In the first nine months of 2017, DBS's AUM jumped 23 per cent to $195 billion compared with the same period a year ago. This includes $15 billion from the acquisition of ANZ's wealth management and retail banking businesses in five Asian markets.
10% - 20%
Headcount will rise between this range this year - after increasing more than 20 per cent in 2017 - adding to a team that currently comprises 200 private bankers.
For the full year, North Asia led asset growth while the other two teams followed close behind, said Mr Lua.
Private banks in Asia tend to use a commission-based model, where they charge clients based on the volume of their transactions. That is a contrast to Europe, where the banks usually charge fixed fees for managing or advising clients on their portfolios.
The Singapore Government last year asked companies operating in the country to move away from product sales and adopt an advisory approach. DBS is trying to do so but first needs its clients to buy into the change, Mr Lua said, adding that he believes the shift will be good for clients.
"Asians tend to be more transactional in nature," he said. "In the longer run, if they believe in the relationship, and they believe that there is a value proposition in the service provider, they will pay a fee."