Consolidation ahead for private banking in Asia, says asset manager run by Liechtenstein royalty

Private banks in Asia are finding it hard to stay in the game as operating costs mount and their client base undergoes changes, which has driven a frenzy of acquisitions in the past few years, say analysts.

Asia-Pacific beat the rest of world in private wealth accumulation last year, with nearly double-digit growth at 9.5 per cent, compared with 5.6 per cent in North America, 3.5 per cent in western Europe and 6 per cent on average globally, according to the latest wealth report by Boston Consulting Group, which has tracked the sector for 17 years.

“The number of sizeable private banks, say, large enough for a newspaper to cover them, will come down,” Prince Max von und zu Liechtenstein, the chief executive of LGT Group, a private banking and asset-management company owned by the House of Liechtenstein, said in an interview with the South China Morning Post.

“In the last couple of years, we have seen a lot of mergers and acquisitions,” Mark Wightman, partner wealth and asset management, at E&Y, said in a telephone interview. “There is good money to be made but it’s a scale game.”

LGT bought Dutch bank ABN Amro’s private banking arm in Asia and the Middle East in December 2016. Singapore lender DBS acquired Australia and New Zealand Banking Group’s wealth business in five Asian markets: Singapore, Hong Kong, China, Taiwan and Indonesia, in October 2016. Geneva-based Union Bancaire Privée took over private bank Coutts International from the Royal Bank of Scotland in March 2015, a deal that boosted the Swiss bank’s assets in Asia from US$1 billion to US$11 billion.