WEALTH VEN­TURES LIFT PROF­ITS

In­vest­ments help off­set weaker loan mar­gins at DBS, OCBC and UOB

New Straits Times - - Business - SIN­GA­PORE

SIN­GA­PORE’S big three banks have in­vested heav­ily in their wealth­man­age­ment busi­nesses over the past year and the re­sults are start­ing to show.

Higher in­come from ser­vic­ing Asia’s more well-heeled in­di­vid­u­als helped DBS Group Hold­ings Ltd, Oversea-Chi­nese Bank­ing Corp (OCBC) and United Over­seas Bank Ltd (UOB) off­set bad­loan pro­vi­sions and weaker loan mar­gins to post bet­ter-than-ex­pected first-quar­ter prof­its. OCBC’s wealth-man­age­ment rev­enue surged 70 per cent from a year ear­lier, the firm re­ported yes­ter­day.

The banks have ex­panded their wealth oper­a­tions to take ad­van­tage of grow­ing af­flu­ence in the Asia-Pa­cific re­gion, where in­di­vid­ual wealth sur­passed North Amer­ica for the first time in 2015, ac­cord­ing to Cap Gemini SA.

Last year, OCBC pur­chased Bar­clays Plc’s wealth units in Hong Kong and Sin­ga­pore, while DBS bought Aus­tralia & New Zealand Bank­ing Group Ltd’s re­tail and wealth oper­a­tions in five mar­kets.

In wealth man­age­ment, “we will con­tinue to grow or­gan­i­cally”, OCBC chief ex­ec­u­tive of­fi­cer Sa­muel Tsien said at a brief­ing yes­ter­day.

OCBC, South­east Asia’s sec­ond-largest lender, re­ported a sur­prise 14 per cent jump in profit as higher wealth and in­surance in­come off­set a decline in net in­ter­est in­come at a time of low Sin­ga­pore bench­mark rates.

The Bar­clays ac­qui­si­tion helped OCBC’s pri­vate-bank­ing unit, Bank of Sin­ga­pore, climb four places to rank sev­enth among Asia’s 20 largest pri­vate banks in terms of as­sets un­der man­age­ment last year. DBS was sixth on the list, un­changed from a year ear­lier. UOB en­tered the APB list for the first time at 14th.

“Wealth for­ma­tion in Asia is very strong,” DBS CEO Piyush Gupta said May 2 af­ter his bank’s re­sults. “If you are one of the top 10 play­ers in the mar­ket, you will get a de­gree of growth just by be­ing in the mar­ket.”

DBS re­ported a one per cent gain in first-quar­ter profit from a year ear­lier. UOB posted a 5.4 per cent profit in­crease on April 28.

DBS’s fee and com­mis­sion in­come gained 16 per cent to S$665 mil­lion, OCBC (29 per cent to S$481 mil­lion) and UOB (18 per cent to S$508 mil­lion). Bloomberg

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