Published by Bloomberg – 6th October 2016
Standard Chartered Plc has stepped up its hiring from Barclays Plc’s private-banking team in Hong Kong ahead of the transfer of the business to Oversea-Chinese Banking Corp., in a move that underscores the stiff competition for wealth managers in Asia.
More than 10 Barclays relationship managers in Hong Kong are joining Standard Chartered, which is expanding its wealth business in the region after hiring global private-banking head Didier Von Daeniken from Barclays in March, said people familiar with the matter, who asked not be named as the move hasn’t been disclosed. Barclays had about 130 relationship managers in Asia as of last year, according to Asian Private Banker.
The exodus from Barclays, which agreed in April to sell its private-banking operations in Hong Kong and Singapore to OCBC for about $320 million, highlights the demand for experienced wealth managers in Asia that’s pushing costs higher. The defections are also a reminder of the risk of trying to buy market share in an industry where successful relationship managers often take their best clients with them.
“Attrition is part and parcel of any business and we have not expected zero employee attrition at Barclays,” Jeffrey Chiam, the global human resources head at Bank of Singapore, OCBC’s private-banking unit, said in an e-mailed reply to questions. Representatives at Barclays and Standard Chartered declined to comment.
Intense Competition
The final price of the acquisition will depend on the size of Barclays assets under management when the deal is completed by the end of the year, according to Chiam. “We will therefore be paying a fair value for the business,” he said.
Despite the loss of some Barclays private bankers in Hong Kong, “almost all” the wealth managers in Singapore will be transferring to OCBC at the end of the year, Chiam said. The $320 million price announced in April was calculated based on 1.75 percent of the $18.3 billion of Barclays assets under management as of December.
Swiss banks UBS Group AG, Credit Suisse Group AG and Julius Baer Group Ltd. are among other firms expanding their wealth units in the region to service the growing number of Asian millionaires.
“The competition for relationship managers has always been intense and will continue to stay that way,” said Sean Kang, a Singapore-based director for Asia-Pacific wealth management at consulting firm McLagan. “The market only has that many experienced RMs, and the number of high-net worth customers is still growing at a much faster rate.”
Wider Retreat
Standard Chartered has announced plans to expand assets under management at its private banking and wealth operations by $25 billion over the next three years. It had about 300 relationship managers in Asia as of 2015, according to Asian Private Banker. Barclays decided to sell its Asian private bank last year as part of a wider retreat to focus on its business in the U.K. and U.S.
At Barclays, Von Daeniken headed the bank’s Asia-Pacific, Middle East and Africa wealth-management businesses. Other Barclays wealth managers who have followed him to Standard Chartered include Srinivas Siripurapu, who joined in July to lead Southeast Asia, South Asia and global non-resident Indian private banking; and Vivian Chan, Barclays’s former North Asia private-banking head, who is due to start in January to oversee Standard Chartered’s business in that region and Greater China.
OCBC’s Bank of Singapore ranked as the 11th-largest private bank in Asia last year with $55 billion of assets under management, Asian Private Banker estimates. UBS topped the list with $274 billion, while Standard Chartered was 13th with $45 billion, according to the publication.
After the Barclays purchase, Bank of Singapore will have the largest team servicing non-resident Indians in Asia, Chiam said. The purchase will build the bank’s operations in core markets in Southeast Asia, Greater China and the Middle East, he said.
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