Asia’s rich become target for double-digit growthPATHOM SANGWONGWANICH
Standard Chartered Bank wants to tap a growing base of affluent clients in Asia, aiming at double-digit growth in the next few years for its wealth management operations.
The plan will be supported by the bank's international network and a comprehensive range of wealth management and banking solutions. Karen Fawcett, group head of retail clients, said Standard Chartered will try to expand its affluent segment by 15-20% over the next few years. "This is a global strategy, as these clients need services across various markets. So it makes more sense in terms of our positioning as an international bank to put relatively more focus on these clients," Ms Fawcett said. "Standard Chartered does not have its own mutual funds, but we have a selection of the best funds of all the local managers and international managers, plus on the insurance side we have an excellent relationship with Prudential, so we've got a very wide range of choice for clients to come and see." In July, Standard Chartered Bank (Thai) and Prudential Life Assurance (Thailand) entered into a deal extending their bancassurance partnership for 15 more years as part of a pan-regional agreement across 11 countries and territories in Asia. The affluent segment in developing countries such as India, Indonesia and Thailand is on the rise compared with mature markets such as Hong Kong and Singapore where affluent growth is slower, Ms Fawcett said.
Standard Chartered economists have identified about 500 million affluent clients worldwide, and that figure is tipped to grow to 1.75 billion by 2020. "If we look at the top 100 fastest-growing cities between now and 2020, 65 of those are in Asia, Africa and the Middle East," Ms Fawcett said. "So our focus is on deepening our presence in those cities in Asia, Africa and the Middle East where the growth is going to be." Ramakrishnan Subramanian, head of consumer banking for Thailand, Vietnam and the Philippines, said the number of affluent clients was generally lower than in the mass segment but the growth rate of the affluent segment was higher. The bank's wealth management operations have achieved double-digit growth over the past two years including 18% growth last year. "In 2015, we aspire to continue to grow our wealth management in double digits, where the source of expansion will come from the current client base through offering financial solutions in wealth protection and accumulation through various innovative products and services," Mr Subramanian said.
Standard Chartered regards clients with minimum assets under management of 3 million baht as affluent. Although the Thai economy has been growing at a slow pace, its economic condition remains resilient, and the country has sound fundamentals as shown by capital inflows, a stable sovereign credit rating and low unemployment, which should help its recovery, Mr Subramanian said. "But having said that, household debt is an area that has climbed significantly over the past four years, and we do see banks being overall cautious on lending," he said. "The rate of loan growth has slowed down a bit industry-wide, and that is a good sign." Household debt rose to 10 trillion baht or 83% of gross domestic product in the second quarter from 9.87 trillion or 82.7% in the first quarter.