High net worth individuals in Asia Pacific surpassed that of North AmericaStaff writer ▼ | March 3, 2016
The Asia-Pacific region is home to a rapidly growing population of the rich and super-rich, two recent market research surveys showed.
Wealth Asia Pacific 2016 Wealth Report by New World Wealth
High Net Worth Individuals are those with $1 million or more in investable assets.
An Asia Pacific 2016 Wealth Report by New World Wealth, published in January, estimates there are about 3.5 million HNWIs living in the region, with combined wealth holdings of $17.7 trillion.
Regional HNWI numbers have increased by 115% over the past 15 years, the report said. Mongolia was the top performing Asia Pacific country for HNWIs during this period, with growth of 670%. Vietnam, Indonesia, China and India also performed well, with Sri Lanka and Vietnam expected to be the fastest-growing HWNI markets over the next 10 years, the study showed.
Reflecting this trend, wealth management fees are now an expanding source of income for Singapore’s three banks.
Between 2010 and 2015, DBS’s fee and commission income from wealth management services have risen more than four-fold, while that for OCBC and UOB have more than doubled over the period.
In 2015, DBS Group Holdings, Oversea-Chinese Banking Corporation and United Overseas Bank averaged fee and commission income of S$507.0 million from their wealth management services, up 12.3% from S$450.3 million in 2014.
In the three months ended 31 December 2015, the three banks averaged fee and commission income of S$110.7 million from their wealth management services, up 7.4% from the year-earlier period, but down 8.9% from the third quarter.
Among the three banks, DBS registered the highest fee and commission income from its wealth management services and the largest YoY percentage gain – both for the December quarter as well as the full year.
DBS said in its 22 February results statement that a strong first half in wealth management services more than offset a slower second half when market volatility reduced investment activity. Wealth management fees accounted for 24% of total 2015 fee and commission income, up from a 22% share the previous year.
In comparison, wealth management fees accounted for 31% of OCBC’s total fee and commission income last year, unchanged from the previous year, the bank said in its 17 February results statement.
For UOB, wealth management fees accounted for 22% of its total fee and commission income in 2015, also unchanged from 2014.
DBS, OCBC and UOB have averaged a total return of minus 13.2% in the 2016 year thus far. Over a 12-month and three-year period, their dividend-inclusive total returns were a negative 23.5% and negative 3.1% respectively. ■