First-rate access to opportunities in mainland China is a cornerstone of The Bank of East Asia’s approach to wealth management
The Bank of East Asia (BEA) has enjoyed a red-letter year, capped by claiming the award for Best Private Bank in Hong Kong from Private Banker International, where the award winners are selected by the industry and covered by an objective news outlet. Since its establishment nine years ago, BEA Private Banking has developed a full range of banking and investment products, and earned a sterling reputation as a highly effective financial partner.
BEA’S head of Private Banking, Gloria Sun, says the bank has received the award in recognition of its strong presence in mainland China, and the ability of its corporate and private banking divisions to work in unison to deliver a unique wealth management proposition.
“We’ve been trusted by mainland companies during their transformation from domestic businesses to multinational enterprises. We have supported their businesses in China and we’re now supporting these entrepreneurs and building the backbone of their wealth management businesses in Asia,” says Sun.
BEA has had a presence in mainland China since 1920. Today, BEA and its whollyowned subsidiary, The Bank of East Asia (China), operate a network of more than 130 branches and sub-branches in mainland China, Macau,
and Taiwan, giving the bank a reach that places it among the top-tier of international retail and corporate banks operating in Greater China. The bank’s entrepreneurial DNA and deep connections, in addition to its traditional values, help set apart its services and products and give its clients access to some distinctive investment opportunities.
The bank’s general manager and head of Wealth Management, Grace Chow, says investors are currently witnessing “the end of an era” as the US winds down its regime of ultra-loose monetary policy while compliance requirements intensify.
“We’re getting back to basics in terms of investment strategies, and are seeking the fundamentals for our clients,” says Chow.
The bank currently likes high dividend stocks and convertible bonds as investments for the medium term, and is developing themes for clients based on mainland environment and infrastructure plays, as well as global investments in shale gas and robotics.
While there is an emerging trend towards risk-off investments, including bonds, Chow says there are opportunities to achieve potential double-digit returns with relatively low volatility. For example, this can be achieved through investing in currency-unhedged leveraged Certificates of Deposit and bonds issued by major banks and large corporates in mainland China. Clients should assess their risk appetite and ability to try to achieve meaningful returns.
While the price of these fixed-interest products can fluctuate, they are generally fairly stable and the returns typically exceed that of term deposits. BEA offers clients a wide range of investment products, and tailors its offering according to each client’s risk appetite and expected returns.
Such timely investing forms part of the wealth management philosophy at BEA.
Sun says the bank prefers to focus on a combination of investments yielding regular returns to deliver wealth, and trusts to ensure preservation of wealth.
She states that the protection of family wealth through a trust structure is absolutely essential but often underutilised by some financial institutions. This also creates an essential point of difference: BEA has an in-house team to establish and manage trusts. It also highlights the bank’s long-term approach to wealth management.
With the bank’s consolidated assets totalling HK$805.3 billion as at June 30, 2014, BEA is not the largest player in Hong Kong’s private wealth management sector. However, Chow says BEA’S clients have access to a comprehensive suite of wealth management services in addition to banking, credit, trust, and insurance services. She believes that in matters of wealth management, a sound strategy and connecting investors to opportunities are paramount. She says the bank’s offering to clients is explained by the Chinese proverb “small as it is, the sparrow has all the vital organs”. Good things, it seems, can come in smaller packages.
Grace Chow, general manager and head of Wealth Management Division (left); Gloria Sun, head of Private Banking