DBS' treasure: 'Middle rich' customers

DBS' treasure: 'Middle rich' customers

The increasing numbers of "middle rich" in Singapore are driving expansion at DBS Bank's wealth management division.

There are more people with between $1.5 million and $5 million in investible assets, and they often need help in managing their nest eggs.

In fact, this group is the fastest-growing segment for DBS, said Mr Koh Kar Siong, regional head of its Treasures and Treasures Private Client.

It provides 18 per cent of the wealth management business' income and Mr Koh wants to expand this to 25 per cent by next year.

"Growing customer numbers will be the key, that is something we're going to focus a lot more on, for both Singapore and Hong Kong," he told a briefing yesterday.

Top-tier private banking clients have more than $5 million in investible assets; those with between $350,000 and $1.5 million are classified by DBS as their Treasures clients.

Wealth management is one of the fastest-growing segments in the banking sector, and DBS has grabbed a large slice of the pie. Its income from wealth management almost doubled in five years, from $481 million in 2009 to $924 million last year, a compound annual growth rate of 18 per cent.

Part of that growth is down to the growing customer base: DBS has more than 10,000 clients in this segment.

The bank launched the Treasures Private Client service in 2011 in response to the growing wealth in Asia. It targets the middle rich, offering investment advice on top of priority banking.

The unit's contributions to the wealth management business expanded from 3 per cent in 2011 to 18 per cent last year. Wealth management also contributed more to group revenues, from 9.7 per cent in 2012 to 10.3 per cent last year.

Mr Koh said Singapore still makes up the bulk of the DBS Treasures Private Client business, as it has seen more traction here than in Hong Kong, where it faces stiff competition.

He added that he is confident the clients in this segment will continue to grow at a year-on-year rate of 15 to 20 per cent.

The bank is beefing up its pool of wealth or relationship managers and has formed the DBS Wealth Academy to train staff. There are 200 such managers serving DBS Treasures Private Clients.

"Do we have sufficient (wealth managers)? It's never good enough, if we continue to grow, and we need to grow the pool of wealth managers. In the wealth space, it's getting a lot more competitive and people move around," said Mr Koh.

rachaelb@sph.com.sg


This article was first published on June 21, 2014.
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