HONG KONG/SINGAPORE – Wealth managers at the big global banks are tempering their expectations for Asia, their fastest growing market, after China’s regulatory crackdown and COVID-driven slowdown helped to push clients to the sidelines, bankers and analysts said.
Some wealth managers have cut the credit they extend to rich clients, they said, while many clients have moved their money elsewhere or put it in cash as they assess the changes in China, as well as the Ukraine conflict and other global uncertainties.
The slowdown in wealth business was evident this past week in earnings results from Credit Suisse, HSBC, Standard Chartered and UBS, which have relied on Asia to drive up revenues.
“We just have to bear this for a few quarters, there’s no shying away from it,” said a Singapore-based banker with an Asia-focused private bank.
“We’re helping clients adjust portfolios, cutting margin ratios, especially on tech holdings,” he said.
The banker and his peers declined to be named as they were not authorized by their organizations to speak to the media.
Bankers stressed, however, that while the mood has changed in Asia at least for the next few quarters, the global wealth managers still saw Asia as their best growth opportunity.
“What we see is actually a similar sentiment with clients (in Asia) from last quarter. So muted appetite to invest, a bit of a wait-and-see pattern in terms of active investments,” UBS CEO Ralph Hamers said on a first-quarter earnings call.
A key shift in the investment calculus for China came from last year’s regulatory crackdown targeting industries such as internet platforms, property development and private education that have created many of China’s billionaires. Authorities aim to address the widening gap between rich and poor through what President Xi Jinping has branded a “common prosperity” policy. – Reuters
