Wealth investments paying off for Singapore’s big three banks

Even in today’s economic climate, Singapore is finding that wealth investments are paying off for their big three banks. When comparing this years profits with years gone by, banks are seeing some serious improvements across the board. The big three banks in Singapore have taken significant and precise measures to invest in their wealth management over the past few years and its making real change in the economy.

Better than expected first quarter profits were posted by DBS Group Holdings Ltd., United Overseas Bank Ltd and Oversea-Chinese Banking Corp. The banks were able to generate higher income from working with working with some of the more economically advanced client’s in the Asia-Pacific region. In part, this change can be pinpointed to a 70% increase in OCBC’s wealth management revenue.

Additionally, these banks are expanding with their wealth operations in order to take advantage of the rising affluence within countries in the Asia-Pacific region, where the individual wealth has surpassed North America. A year ago, OCBC bought wealth units in Singapore and Hong Kong from Barclays Plc’s, and DBS bought out Australia and New Zealand Banking Group Ltd.’s wealth and retail operations in five various markets.

Samuel Tsien, the chief executive officer for OSBC states that with wealth management, countries within the Asia-Pacific region will keep growing organically. With the release of the bank’s first quarter results, Samuel Tsien shared with reporters that his bank will continue to grow, deepen and look at more opportunities to fit into the bank culture.

The OCBC is actually second largest lender in the Southeast Asian region. The OCBC reported that their profit for this period jumped 14% as higher insurance and wealth offset the decline for net interest income that was at a low for many Singapore rates. OCBC’s shares rose to $10.41, which boasts a 1.1% increase and is the highest intraday level the bank has experienced within two years. The stock for OCBC picked up 17% so far this year while UOB jumped 15% and DBS gained 19%.

With the acquisition the Barclays made, OCBC’s private banking unit, the Bank of Singapore, rose four places, making it the seventh bank out of 20 private banks when ranking considering assets under management based on last years reports. DBS ranked at sixth, while UOB placed for the very first time at number 14.

Growth with Wealth Formation
Piyush Gupta, the DBS CEO, stated that wealth formation within the Asian-Pacific region is incredibly strong. Being 10 players in the Asian market automatically guarantees an amount of growth for all players involved. The biggest lender in South-East Asia, DBS, has announced a 1% gain in their first quarter profit from the year before. UOB enjoyed a profit increase of 5.4%.

In conclusion, the increase of wealth revenue is the main factor resulting in a boost in income for all three of Singapore’s big bands. The DBS commission and fee income rose 29% to $481 million. The commission and fee income for UOB jumped 18% to $508 million.