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Jakarta Post

DBS aims 15% growth in wealth management

Bank DBS Indonesia, part of the Singapore-based DBS Group Holdings Ltd

Grace D. Amianti (The Jakarta Post)
Jakarta
Fri, December 19, 2014

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DBS aims 15% growth in wealth management

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ank DBS Indonesia, part of the Singapore-based DBS Group Holdings Ltd., expects its newly launched currency linked investment to help boost the lender'€™s wealth management business next year.

Bank DBS Indonesia wealth management head Widrawan Hindrawan said the currency linked investment (CLI) in renminbi offered higher yield potential for customers.

Widrawan said the CLI Renminbi was specifically tailored for priority banking customers with a minimum cash balance of Rp 5 billion (US$637.2 million) per person, as Bank Indonesia categorizes the investment as high risk.

The product, launched in November, is considered high risk yet very profitable due to the renminbi'€™s volatility against the US Dollar, according to Widrawan.

He said the lender decided to launch the product in renminbi as the Chinese currency had been deemed as the next dollar contender at the global level despite the recent slowdown in China'€™s economy.

Citing 2014 data from the Society for Worldwide Interbank Financial Telecommunication (Swift), he said that the renminbi placed seventh among the world'€™s most active currencies and was the second-most popular currency for global trade in the financial industry.

'€œThe increase in Indonesia'€™s exports and imports with China as well as the rising popularity of the renminbi has boosted demand for this investment product from our high-net worth customers,'€ he said.

Widrawan said the lender had yet to set a specific target for transactions for its CLI Renminbi product. Since its launch in November, the product'€™s total transactions had reached almost Rp 1 trillion, he said.

According to Widrawan, treasury products have contributed to more than one-third of DBS Indonesia'€™s revenue from its wealth management business, with customers tending to have medium to high-risk profiles.

 '€œThe majority of our priority banking customers have benefitted from wealth management products, especially treasury ones,'€ he said.

Widrawan said assets under management in DBS Indonesia'€™s wealth business grew 16.88 percent to around Rp 7 trillion as of November. Around one-third of the lender'€™s 32,000 consumer banking customers were served by its wealth management business, he added.

According to Widrawan, the number of DBS Indonesia'€™s priority banking customers is expected to grow around 10-15 percent next year.

Widrawan said various research and surveys had shown that Indonesia had the largest potential for growth in Asia with regard to priority banking customers or those categorized as '€œHigh Net Worth Individuals'€ (HNWI) with a minimum cash balance of $1 million per person.

'€œOn average, a banking customer in Indonesia has at least three accounts in different banks. We categorize these kinds of people as qualified-eligible clients,'€ he said.

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