SIAM Commercial Bank (SCB) and Julius Baer have launched a joint venture in wealth management – the first by the Swiss institution in Asia – that aims to tap growth in the ranks of Thailand’s high-net-worth people.
Arthid Nanthawithaya , president and chief executive officer at SCB, and Bernhard Hodler, chief executive of Bank Julius Baer, yesterday signed an agreement to set up a wealth management company with capital of Bt1.8 billion. SCB holds a 60 per cent share, with Julius Baer the rest.
The two financial institutions came together with an eye on grabbing a slice of the fast growing wealth management market that serves the super rich, estimated to number 30,000 in Thailand. This market segment in Thailand is estimated at US$300 billion.
“Over the next five years we aim to have US$30 billion worth of assets under management,” said Arthid.
The joint venture is expected to start providing services to high-net worth individual (HNWI) clients in May, he said.
The population of HNWIs in Thailand is growing constantly, at 12.7 per cent in 2016 and 13.3 per cent in 2017, providing the bank with strong confidence in the market potential, Arthid said.
The new partnership platform is one of the key spin-offs of SCB’s “Going Upside Down” strategy, said Arthid.
He said SCB has financial products to sell to investors but that is not the same as wealth management. “Wealth management requires more than just selling financial products to investors,” said Arthid.
The joint venture will offer rich investors global asset classes, he said. “We already have a HNWI client base, but if anyone want us to manage his or her asset worth Bt100 million, we will provide this service,” said Arthid. Hodler said Thailand’s wealth management market is growing and that SCB is the right partner for Julius Baer, which has global knowledge in wealth management but does not have local networks in Thailand. He said Julius Baer’s focuses on giving investment advice to clients and finding the best financial products worldwide - not only Julius Baer’s own products - for them
The two financial institutions will start to recruit management team and workers for the joint venture and the company’s headquarters will be in Bangkok. It will also have an office in Singapore.
SCB yesterday informed the Stock Exchange of Thailand about the joint venture project.
Asked whether they will expand to other countries, Arthid said that they will focus on the Thai market first and if that succeeds, they may consider expand into the so-called CLMV countries: Cambodia, Laos, Myanmar and Vietnam.
“ We will walk before we run,” said Hodler.
Julius Baer claims to be leading Swiss private banking group. At the end of 2017 its assets under management amounted to 388 billion Swiss francs.