CITIBANK Thailand’s wealth management business has enjoyed strong growth, aided by eased restrictions on portfolio investment abroad and Thai investors’ increasing knowledge of global asset choices, senior executives say.
They cite actions by the Bank of Thailand and the Securities and Exchange Commission to relax the rules on capital outflows as being a key factor in the gains posted by the bank’s wealth management unit, allowing high-end investors to move into global assets, including equities and bonds.
“Citibank targets to increase the number of Citigold customers by more than 40 per cent this year,” Vira-anong Phutrakul, consumer business manager of Citibank Thailand, said yesterday. Citigold customers are those who invest Bt5 million or more.
Capital liberalisation implemented by Thai authorities is good for Citibank wealth management business where the bank has strength, Vira-anong said.
The Bank of Thailand early this month raised the limit that Thai investors can invest overseas to US$100 billion from US$75 billion, applying to institutional investors and individuals who invest via agencies such as mutual funds and brokerages.
Vira-anong said there were also other factors that contributed to the rise in investment by high-end investors, such a wish by people to plan for their children’s overseas education and for their own retirement.
Among Thai customers, the bank found that more than 30 per cent of the total new investment from these high-end investors each month went directly in foreign funds.
Citibank manages funds worth US$218 billion across the Asia-Pacific region, Vira-anong said.
The growth rate of wealth management in Thailand is higher than for the rest of Asia and the global average, partly due to the effect of a low base.
Asked about the impact of baht appreciation on overseas portfolio investment, Don Charnsupharindr, retail banking head of Citibank Thailand, said that many investors were taking this opportunity to buy foreign assets due to the rising purchasing power of the baht. The currency has risen by about 8 per cent against the US dollar since early this year.
Investors are also advised to hedge against the risks posed by exchange rate volatility. One solution is to invest via many currencies instead of concentrating on one currency, Don said.
Asked about the nuclear tensions on the Korean Peninsula after North Korea fired a second missile over Japan yesterday, the Citibank executives said investors are advised to put their money into many parts of the world in order to hedge against a range of risks.