In some areas of financial services either Singapore or Hong Kong has a clear advantage (think, Hong Kong’s dominance in equities) – but in private banking the two cities are genuine competitors.
However, new data suggests that if you want to work in the epicentre of Asian private banking, you should base yourself in Hong Kong. Singapore’s global ranking as a wealth-management centre has dropped from fifth to sixth place, one behind Hong Kong, according to a new report by Deloitte. Hong Kong recorded a 146% rise in cross-border client assets between 2008 and 2014, more than any other centre – Singapore managed a 24% rise during the same period.
Similarly, a recent research paper from WealthInsight found that Singapore has 18.4% fewer high net worth individuals (151,025) than Hong Kong (185,055) and that Singapore billionaires held 237.7% less wealth (US$69bn) than Hong Kong billionaires (US$233bn).
“The clear advantage of being based in Hong Kong as a private banker is better access to mainland Chinese high net worth clients who use Hong Kong as a base,” says a private banking headhunter. The amount of high net worth individuals in China rose 17.8% in 2013 and their wealth rose 20.5%, according to the World Wealth Report by Capgemini and RBC.
Still, headhunters say private banks continue to hire in Singapore and face a chronic talent shortage. Bank of Singapore, the private bank owned by OCBC, hired 100 new staff in 2014 alone. “The key for Singapore to accelerate its growth and development as a hub for non-capital market solutions is to look at introducing more digital-led innovations. It wasn’t that Singapore stagnated, it was more that Hong Kong grew faster than Singapore,” Mohit Mehrotra, Deloitte’s global wealth-management group leader, said in the Deloitte report. Hong Kong’s ability to retain its spot as Asia’s main hub for private wealth in part depends on the stability of its political system, adds WealthInsight analyst Tom Carlisle.
DBS announces 4% year-on-year earnings rise for Q4 and pledges more investment in digital banking (Straits Times)
Leading tech banker at Citi leaves for Temasek-owned firm. (Reuters)
UBS’ head of ultra rich banking gives his top financial tips. (Finance Asia)
Hong Kong issues warning against Bitcoin. (New York Times)
CIMB closes its Australian investment banking business. (Business Times)
OCBC spends $5m on tablets for its sales staff. (Straits Times)
Shanghai-Hong Kong Stock Connect mulls lifting of trading quota. (South China Morning Post)