DBS Group Holdings Ltd. plans to increase the number of relationship managers in its private banking business to tap into surging Asian wealth.
Headcount will rise between 10 percent and 20 percent this year -- after increasing more than 20 percent in 2017 -- adding to a team that currently comprises 200 private bankers, Lawrence Lua, deputy private-banking head, said in an interview in Singapore on Tuesday. Hiring will be spread across the three main teams covering Southeast Asia, North Asia, and international markets plus Indians living abroad.
"Our clients, the wealthy, have grown their businesses. They have cash flow, more liquidity," Lua said. "The market has been kind" and DBS is beefing up its headcount to capture more of this wealth, he said.
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 percent in 2016 to $18.8 trillion, led by Southeast Asia and Greater China, according to a report from Capgemini SA. It forecast an increase to about $40 trillion by 2025.
DBS ranks sixth among the the biggest private banks in Asia-Pacific outside of China, a sector dominated by UBS Group AG, Citigroup Inc. and Credit Suisse Group AG, according to the Asian Private Banker. DBS’s assets under management grew 15 percent each year from 2012 through 2016, the data show.
In the first nine months of 2017, DBS’s AUM jumped 23 percent to S$195 billion ($148 billion) compared with the same period a year earlier. This includes S$15 billion from the acquisition of ANZ’s wealth management and retail banking businesses in five Asian markets.
For the full year, North Asia led asset growth while the other two teams followed close behind, said Lua.
Deutsche Bank AG’s wealth management unit said Thursday it has added three managing directors in Singapore to serve overseas Indians, and looks to hire 10 more people at various levels of seniority within the first quarter. Morgan Stanley’s Vincent Chui, who heads private wealth management and institutional equity distribution in Asia, said in November he was keen to expand his team of relationship managers.
Private banks in Asia tend to use a commission-based model, where they charge clients based on the volume of their transactions. That’s 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 shift 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, Lua said, adding that he believes the shift will be good for clients.
"Asians tend to be more transactional in nature," Lua 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."