Taiwan private wealth management AUM surpasses US$130 bn
With the global artificial intelligence boom powering demand for chips and boosting the island’s TAIEX index, Taiwan’s private banks and wealth managers saw improving sentiment for the local wealth market and a 19% growth in their combined AUM. That resulted in a total AUM figure of US$131 billion, with more than US$20 billion of new wealth assets created.
According to APB Insights’ 2023 Taiwan Private Banking & Wealth Management AUM League Tables, Taiwanese wealth players saw an average increase in AUM of 27%.
Banks attributed this to key factors such as having more sophisticated assets on their product shelves and including more holistic services, especially family-orientated ones.
The top beneficiaries of this wealth boom include CTBC Bank, whose AUM grew 33%, or US$9 billion, to US$36 billion. CTBC Bank ranks first in terms of private banking AUM in the table, alongside Mega Bank and First Bank Taiwan, whose wealth management AUM grew 69% and 87%, respectively.
More sophisticated clients
With clients becoming more financially savvy and customer segments increasing, private banks were pushed to broaden their product offerings. As a result, Taiwanese wealth clients are gaining increasing access to products such as sophisticated new Taiwanese dollar-denominated asset solutions and flexible credit facilities.
While this leads to increased connectivity with international financial markets, it also creates more heated competition. However, Cathay United Bank revealed that this might close the gap between domestic banks and onshore international players, as international banks still face limitations in terms of their product offerings.
“Most of our foreign competitors started to shrink in the market share in Taiwan over the past five years, but on the contrary, we are expanding very fast and we saw a high double-digit growth, creating record high profits and AUM,” Robert Fuh, CEO of Cathay United Bank Private Banking told APB.
Family-based wealth management
With intensifying competition within the Taiwan wealth management scene, private banks are making services more holistic to garner new AUM, retain clients, and diversify clientele. While these services range from insurance to tax and financial planning, the most prominent one remains the implementation of family-based wealth management services, as banks try to extend beyond the scope of personal wealth management.
These include Cathay United Bank, which plans to provide portfolio advisory services for wealthy families; Taishin Bank, which has been implementing segmentation strategies to better serve each segment; and SinoPac Securities, which has been helping families with tax planning and wealth transfer.
International expansion
Amid cross-strait and US-China tensions, Taiwanese clients are conscious of geopolitical tensions and the need for diversification beyond Taiwan. As a result, more private banking clients are increasingly considering overseas locations, particularly Singapore, as booking centres.
However, on whether the banks are seeing outflows to other jurisdictions, Cathay United Bank pointed out that they did not observe any kind of urgent and material fund flows or relocation to other places in the past two years, as most of the bank’s clients have been preparing for such situations at an early stage.
Methodology
Some banks publicly state their regional AUM totals, others don’t. Therefore, the datasets presented here contain a mix of estimates, shared, and reported figures. We also recognise that banks are inconsistent in the way they count AUM. And their minimum investment requirements can range widely, starting from as little as US$33,000 and going up to as high as US$3.3 million.
Totals may include assets under custody and/or loans, and may be distorted by double-counting. Where possible, we footnote for or provide some guidance on these variables. However, in the absence of enforced or agreed-upon standardisation and transparency, these inconsistencies will continue to undermine our ability to directly compare banks’ AUM.
Mid-market rates used as at 31 Dec 2023 for their respective years for non-USD reporting. For 2023: TWD-USD 0.032464
