A slump in client trading activity in Asia is threatening to slow a lucrative earner for the world’s biggest wealth managers.
UBS and Citigroup are among the banks whose wealth revenue for the region likely declined by double digits in the first half, people familiar with the matter said, asking not to be identified as they were discussing private information.
Credit Suisse Group, which last month said that results in the second quarter were affected by clients pulling back, is poised for a similar drop, the sources said.
The expected shortfall contrasts with a strong performance last year, underscoring how weaker client sentiment is overshadowing a key business for banks who service the global rich.
China’s crackdown on a large number of industries, including technology, education, gaming and property, has roiled Asian markets, leaving clients sitting on losses and reluctant to trade.
After dominating growth in the number and wealth of high-net-worth individuals over the past decade, Asia fell behind Europe and North America in 2021, a report from Capgemini showed.
Some lenders are now turning more cautious as a years-long hiring spree meets more gloomy growth projections.
“Hiring has definitely slowed down compared to last year,” said John Mullally, regional director for Southern China and Hong Kong financial services at Robert Walters.
“It’s not like 10 years ago where private banks hired people such as hairdressers because they had a Rolodex of wealthy customers.”
Credit Suisse has given new relationship managers in the region more time to meet revenue targets given market conditions and travel restrictions during the Covid-19 pandemic, which have made it hard to meet clients face to face, sources said.
The first half was “a tough time for all of us”, said Amy Lo, co-head of Asia-Pacific wealth at UBS, the region’s biggest private bank, on the sidelines of an investment forum in Hong Kong earlier this month. “Volatility is here to stay.”
It’s a sharp reversal from 2021, when governments pumped money into markets, supporting buoyant stocks while the pandemic prompted prolific trading among the wealthy. With interest rates rising, fears of a recession are looming, and US shares have experienced the worst sell-off in half a century.
Barclays said late last year it plans to make key hires in wealth management across Asia as the British lender plots its return to some of the world’s fastest growing economies after a 2016 restructuring. Other banks including JP Morgan Chase and HSBC have also made a similar push into major private banking markets such as Singapore, Hong Kong and China over the past few years.
Banks are becoming “more prudent” on hiring in Asia and are controlling costs very carefully as revenue for most is down in the first half, said Serina Wong, a Hong Kong-based managing partner at executive search firm Dresden Green Consulting.
Growth has slowed a lot as it is more difficult to open new accounts for clients in China who face travel restrictions, she added.
Private bankers in Singapore and Hong Kong say that their Asian desks are heavily exposed to revenue from clients trading frequently as opposed to hubs such as Switzerland where banks manage money for the rich and get a regular fee.
Much of the wealth in Asia is in the hands of self-made entrepreneurs keen to make their own bets, while in Europe, it’s held by the second and third generation who want to preserve the wealth and have private banks manage their money. In bull markets, transaction fees are a lucrative source of income, but in market downturns, they can quickly dry up.
Citigroup added 10 per cent more private bank clients in Asia in the first half of 2022 from a year ago, despite the challenging macro environment, a bank spokesman said. The lender is predicting further momentum across its wealth business in Asia in the second half, he said.
A Credit Suisse representative declined to comment on Asia wealth revenue, saying the bank is committed to investing in the region regardless of short-term market volatility. A representative for UBS declined to comment.
UBS and Citigroup are expected to post near flat global wealth management revenue in the second quarter, while Credit Suisse is expected to show a deeper decline of more than a third, analysts said.
Credit Suisse has seen “significant deleveraging” in Asia and also reduced client transactional activity, Francesco De Ferrari, the bank’s head of wealth management, said at an investor event last month. The Zurich-based lender outlined plans to grow its wealth unit by focusing on markets such as Hong Kong and Singapore.
Credit Suisse’s relationship managers in Asia-Pacific increased to 710 as of the first quarter, a 12.7 per cent rise from a year earlier. By contrast, UBS’s number of advisers in Asia-Pacific fell by 5.3 per cent to 861 over the same period.
Still, there are signs that the worst may be over in China as it comes out of a series of Covid lockdowns, with authorities dialling back a crackdown on the tech industry. UBS expects a better second half, on the back of a stronger performance in China, where it expects policymakers to support markets, Ms Lo said.
Banks are still hiring selectively, including adding bankers to manage Chinese wealth in Singapore. Citigroup has hired for its family office in Asia this year, while UBS had added headcount to its alternatives team.
Private banks have also been advising clients to move into private equity and alternative investments to shield against the volatility in listed stocks.
The years Ramadan fell in May
More from Neighbourhood Watch:
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
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- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
As You Were
Liam Gallagher
(Warner Bros)
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
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WITHIN%20SAND
%3Cp%3EDirector%3A%20Moe%20Alatawi%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Ra%E2%80%99ed%20Alshammari%2C%20Adwa%20Fahd%2C%20Muhand%20Alsaleh%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
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- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
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*Annual tuition fees covering the 2024/2025 academic year
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
THE SPECS
2020 Toyota Corolla Hybrid LE
Engine: 1.8 litre combined with 16-volt electric motors
Transmission: Automatic with manual shifting mode
Power: 121hp
Torque: 142Nm
Price: Dh95,900
KILLING OF QASSEM SULEIMANI
Kat Wightman's tips on how to create zones in large spaces
- Area carpets or rugs are the easiest way to segregate spaces while also unifying them.
- Lighting can help define areas. Try pendant lighting over dining tables, and side and floor lamps in living areas.
- Keep the colour palette the same in a room, but combine different tones and textures in different zone. A common accent colour dotted throughout the space brings it together.
- Don’t be afraid to use furniture to break up the space. For example, if you have a sofa placed in the middle of the room, a console unit behind it will give good punctuation.
- Use a considered collection of prints and artworks that work together to form a cohesive journey.
MATCH DETAILS
Manchester United 3
Greenwood (21), Martial (33), Rashford (49)
Partizan Belgrade 0
COMPANY PROFILE
Company name: Blah
Started: 2018
Founder: Aliyah Al Abbar and Hend Al Marri
Based: Dubai
Industry: Technology and talent management
Initial investment: Dh20,000
Investors: Self-funded
Total customers: 40
Top 5 concerns globally:
1. Unemployment
2. Spread of infectious diseases
3. Fiscal crises
4. Cyber attacks
5. Profound social instability
Top 5 concerns in the Mena region
1. Energy price shock
2. Fiscal crises
3. Spread of infectious diseases
4. Unmanageable inflation
5. Cyber attacks
Source: World Economic Foundation
Hidden killer
Sepsis arises when the body tries to fight an infection but damages its own tissue and organs in the process.
The World Health Organisation estimates it affects about 30 million people each year and that about six million die.
Of those about three million are newborns and 1.2 are young children.
Patients with septic shock must often have limbs amputated if clots in their limbs prevent blood flow, causing the limbs to die.
Campaigners say the condition is often diagnosed far too late by medical professionals and that many patients wait too long to seek treatment, confusing the symptoms with flu.
How Beautiful this world is!
Australia squads
ODI: Tim Paine (capt), Aaron Finch (vice-capt), Ashton Agar, Alex Carey, Josh Hazlewood, Travis Head, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Andrew Tye.
T20: Aaron Finch (capt), Alex Carey (vice-capt), Ashton Agar, Travis Head, Nic Maddinson, Glenn Maxwell, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Mitchell Swepson, Andrew Tye, Jack Wildermuth.
