BAY banking on BlackRock to enhance wealth management
Bank of Ayudhya is partnering with BlackRock, the world’s largest asset manager, to enhance BAY’s advisory and wealth management capabilities.
The aim is to accelerate growth in the wealth management business to 15% each year and double the size of assets under management within the next five years.
At present, the bank has about 300,000 wealth management accounts in two segments, Krungsri Exclusive (where customers have over 5 million baht in deposits and investments with the bank) and Krungsri Prime (where customers have 1-5 million baht in deposits and investments with the bank).
“The bank’s wealth management expects that the assets under management will double from 1 trillion baht over the next five years resulting from this partnership,” said Ponganant Thanattrai, head of retail banking and distribution group at BAY.
At present, the bank has a compound annual growth rate of 10% in terms of number of customers and manages about 200 mutual funds.
The bank’s chief executive, Seiichiro Akita, said advisory and wealth management are among BAY’s key focus areas.
Joining forces with BlackRock will empower BAY to develop a comprehensive suite of investment solutions, advance a customer-centric strategy and deliver the best investment advice.
Mr Akita said wealth management still has a bright future, especially in Asia, where total personal wealth value is estimated at US$34 trillion. The segment is growing at a high average growth rate of 10% from 2014-2019, compared to the average growth of 5-6% in Europe and the US.
Wealth management penetration in Asia is just 15-20% of total personal
Assets under management will double from 1 trillion baht over the next five years resulting from this partnership. PONGANANT THANATTRAI Head of retail banking, BAY
wealth, a low figure when compared with other regions. The segment has an opportunity to expand even during the pandemic, when equities are volatile and creating demand for diverse investment opportunities globally.
The first product stemming from the partnership is a tactical asset allocation fund, Krungsri Global Core Allocation Fund, which was developed exclusively for the bank’s customers.
The fund uses a tactical asset allocation strategy to adapt to economic conditions according to changing
factors with flexible diversification of investment in stocks and debt instruments based on each particular market condition.
As of Sept 30, BlackRock had total assets under management of $7.81 trillion.