Bank of Singapore out to exploit mainland wealth to double portfolio

Asian private wealth manager Bank of Singapore is looking to cash in on China's rising affluence to reach its goal of doubling its global assets under management in four years.

Bank of Singapore, which was formed after Oversea-Chinese Banking Corp acquired Netherlands-based ING Group's Asian private banking business in 2010, said it was close to achieving its earlier goal of doubling assets under management in the three years from 2010.

The bank continues to grow even as private wealth managers in Asia have been struggling this year to shore up their bottom lines because of high costs and slowing growth. Many banks in Hong Kong have or are in the process of letting go underperforming private bankers.

Return on assets - a measure of profitability - among private banks in Asia remained the lowest in the world at 65 per cent, despite the huge potential the region provided, said Frankie Leung, a partner at Boston Consulting Group.

One reason for this poor performance was the high cost-income ratio of private wealth managers in Asia, which stood at an average 80 per cent, Leung said. The ratio for commercial banks is usually about 50 per cent.

Sermon Kwan, the chief executive for greater China at Bank of Singapore, said the bank had managed to keep its costs below those of industry rivals and grew its assets under management by 20 per cent to US$36 billion from a year ago. The bank had more than 260 relationship managers and 860 staff in March.