BEA’s wealth management division in Hong Kong posted year-on-year growth of 5.18% in revenue to HK$832m ($106.4m).
Profit was also up 6.24% year-on-year to HK$630m, approximately 47% of which was derived from mainland clients.
Although revenue and profit were up in single digits last year, AUM of the private banking division grew by 24%, thanks to higher client activity in equity investments, new clients and funds coming on board, according to its annual financial report.
Leverage up
In addition to selling investment products, the division also runs a lending business to private banking clients, where it saw a high single-digit increase in net interest income last year.
BEA said the demand for loans from clients increased because they wanted to leverage their investments during the buoyant market of 2017.
In 2018, BEA intends to upgrade back-office processes and frontline sales tools in order to lift efficiency, optimise its client mix and allocate marketing resources to targeted segments.
Moreover, the private banking division will remain focused on mainland Chinese clients and continue to source new clients across Guangdong, Hong Kong and Macau.
The bank’s Macau branch added professionals and high-net-worth clients last year in tandem with Macau’s improved casino business. The bank said it has also enlarged its offering by selling insurance products to existing customers. Sales of investment fund products also helped boost the branch’s fee income by 48.4% year-on-year, the report said.
Asset management activity
BEA Union Investment Management, the bank’s asset management joint-venture with Germany-based Union Investment, posted a 31.81% increase in AUM year-on-year. The growth was mainly due to the penetration of funds into the retail and institutional client segments in Europe and Asia, the bank said in the same earnings report.
Last year, BEA Union was granted a permission from Chinese authorities to establish an investment management wholly foreign-owned enterprise (WFOE) in Qianhai.
The asset manager also began distribution of funds in offshore markets. In July, it began selling two Asia-focused funds to Swiss investors through the Mutual Recognition of Funds (MRF) scheme. The firm is also considering launching funds in France, which is expected to link with Hong Kong in an extension of the MRF programme. In July last year, Hong Kong and France signed a memorandum of understanding linking their mutual fund markets.
In Hong Kong, BEA Union sells 19 SFC-registered funds. In 2017, the BEA Union Investment China Phoenix Fund was the best performer among them with a return of 44.64%. The worst performer was the BEA Hong Kong Dollar Bond Fund with a 1.77% in return, FE data shows.
