China's rich pick S'pore in push to diversify overseas

PHOTO: China's rich pick S'pore in push to diversify overseas

CHINA's wealthy have picked up the pace of diversifying overseas and Singapore is one of their preferred destinations, said Carol Chen, managing director, Barclays Bank plc.

Even the scrapping of the fast-tracked residency scheme earlier this year has not dented the flow of Chinese money into Singapore, which is seen as a safe haven, she said.

Ms Chen was hired last December from UBS to head the Greater China team for Barclays Wealth Singapore, the private banking arm of the UK bank.

"Why Singapore? (Because) they want to diversify," she told BT in a recent interview.

After the 2008 financial crisis, Chinese clients saw that Singapore offered diversification not just for its location but also in terms of currency and access to different banks.

Ms Chen started the Greater China desk for the Singapore office from scratch, while the group's Greater China Hong Kong team has been around for more than 20 years. As with most other private banks in the region, Hong Kong is where they would base their Greater China teams, and some might have a small presence in Singapore.

"We have very aggressive plans for Greater China, for both teams," she said.

Her boss, Pakorn Boonya-kurkul, who is head of North Asia, said there are "no limitations in hiring".

After 11 months on the job, the number of relationship managers here has reached double digits, and Singapore is responsible for 50 per cent of the Greater China growth of assets under management (AUM), said Ms Chen.

BT understands the new assets run into hundreds of millions of dollars.

Barclays Wealth has about 100 relationship managers in Asia, with about 70 based in Singapore, which covers South Asia plus the non-resident Indian market and South-east Asia.

The private bank's AUM in Asia is growing at 25 per cent a year, in line with the growth rate over the past five years, much faster than global AUM, which rose 8 per cent since the start of the year to £177.6 billion (S$345.6 billion) as at Sept 30, 2012.

Asia's AUM is about 10 per cent of the global total.

In the case of Chinese clients, Barclays targets those with a minimum of US$5 million.

While Chinese clients always look for "immigration opportunities", they have not been put off by Singapore's scrapping of the eight-year-old Financial Investor Scheme (FIS), she said. Favourite destinations for them are Canada, Singapore, Australia and New Zealand, she added.

The FIS had allowed those with at least S$10 million of assets parked in Singapore for five years to apply for residency status. But the end of the scheme has not stopped clients from bringing money here, as Ms Chen said the scheme was not the key attraction.

According to Boston Consulting Group, Singapore had US$512 billion of private-banking assets in 2010, the largest such pool of money in Asia.

This has been fuelled by the immense rate of wealth creation across the region, especially in Greater China. Based on the latest report by Capgemini, the number of millionaires continues to grow in the region, totalling 735,000 across the markets of China, Hong Kong and Taiwan in 2011.

Ms Chen said Greater China clients generally fall into two categories. Those from Hong Kong and Taiwan are second-generation wealth and keener on traditional private banking services to preserve what they have. China clients, on the other hand, are still growing their businesses and look to the bank to offer corporate finance services, she said.

A recent trend has been the requests for aviation and yacht financing, and single stock lending, she said. Clients are buying planes and yachts for both personal and business use. Aircraft cost between US$20 million and US$40 million while luxury yachts can cost up to US$100 million.

Some clients also like trading commodities and foreign exchange, while the love affair with real estate continues with more looking at the UK and the United States, she said.

The ability to advise on property deals in London is one of Barclays' strengths, she said.

Our team in London is able to lend against and structure all types of real estate investments in London and the UK, she said. Not unusual would be a client paying over £10 million for a home in London.

The bank has seen strong demand for loans for the purchase of homes in London over the last two to three years, fuelled by the prevailing weakness in the market where clients see opportunities to buy properties in good locations at what they feel is good value.

There is also interest in well-located hotel properties in London and New York, along with selected interest in commercial buildings such as offices and shopping malls.

So while the financial markets have been volatile, there is still a lot of investment products and services to offer clients, she said.

"I'm looking forward to next year, doubling both hiring and AUMs," said Ms Chen.