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BANKING

Private banking bonanza prompts difficult decisions

Asia’s private banking ranks continue to swell as a benign market lures in more entrants. Costs are escalating and so is product pricing. Market growth may yet hide banks’ hubris but any reversal in trends could leave some dangerously exposed. Chris Leahy reports.

Dressing up, dumbing down

IN SINGAPORE’S tropical heat, only two types of businessmen sport suit jackets: visitors ignorant of local attire and the private bankers that ply their trade in what is Asia’s key wealth management centre.

These days there are plenty of jacketed, well-heeled private bankers around Raffles Place and along Collyer Quay since the industry has been on a relentless hiring spree for years. Asian private banking is enjoying a bonanza. According to Boston Consulting Group, from 1999 to 2004, total wealth of households in Asia ex-Japan had a compound annual growth rate of 7.4%. There is little sign that growth is likely to slow much either. BCG forecasts wealth in Asia will grow by an additional annual 6.8% over the next five years.

That makes Asia comfortably the fastest-growing market for wealth management globally and explains why banks are falling over each other to set up shop and are hiring like mad.

Phillipe Damas, ING “If you want to generate long-term profits you have to avoid product pushing”
Phillipe Damas, ING

“We’re at the five-to-midnight stage,” says Kurt Schenk, country coordinator, Asia Pacific, and executive director at Dresdner Bank Switzerland in Singapore.

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