Asia's private banking scene heats up as European players enter fray

European private banks are heavily investing in Asian footholds.

The steady expansion of European lenders into the region is set to jumpstart Asia’s private banking scene as they jostle against homegrown lenders for the right to manage the wealth of the region’s high net worth individuals, according to a report from credit rating agency S&P.

The Asian market is expected to grow at a faster pace than Europe who has been grappling with intensified oversight in the wealth management industry, cementing the reason for Asian pivot.

“We observe that all rated private banks reported significant net assets inflows in 2017. Indeed, also in previous years some banks managed to more than offset outflows by inflows in new markets, especially in Asia,” the credit rating agency noted.

Assets under management by Asian private banks surged past the $2t mark last 2017, according to the Asian Private Banker, buoyed by strong inflows from the Greater China market.

“A sustained market rally and robust client activity in 2017 translated into a year of gains for Asia’s private banks,” the report noted. 

Global high-net worth wealth is increasingly being directed to Asian markets with private banking wealth in the region surging 40.3% compared to international private banks which grew only 27.1% in 2016 to 2017.