Bankers warn on Singapore shake-up

Irish Times ^ | 08/29/2013 | Irish Times

[TexGrill]

Intense competition, a tendency for wealthy Asians to use multiple private bankers and high staff costs are likely to force consolidation in the wealth-management business in Singapore and could push operators out of business, top private bankers have warned.

Signs of competitive strain in one of Asia’s biggest wealth management hubs stand in contrast to an image of rising wealth as the number of multimillionaires grows faster in the region than elsewhere.

Bankers say that even as assets under management are growing fast in Singapore, that is not translating into profits for many banks that have rushed to Singapore to tap growing wealth.

“Many foreign banks came in without giving enough thought about the sustainability of the business, the regulatory environment and competitiveness from established players as well as local banks aspiring to be top-end wealth managers,” said Deepak Sharma, chairman of Citi Private bank and co-chair of the Singapore Private Banking Industry Group.

Private bankers say cost/ income ratio in Singapore is higher than in Europe, as an influx of banks chasing business has collided with a shortage of qualified “relationship managers” to woo clients.

[TexGrill]

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