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‘No significant outflows’ from HK protests, DBS says

Other firms also say they have not seen any transfer of money outside of Hong Kong that are linked to the protests.
skyscraper on two side of Victoria Harbour of Hong Kong. View from the Peak at night.

The ongoing political unrest that began with a protest against Hong Kong’s proposed extradition bill has made a number of people question the SAR’s standing as a financial and wealth hub in the region.

Various media, without naming any sources, have reported that Hong Kong-based high net worth individuals have been moving their cash to Singapore. One unnamed wealth manager also claimed that it received a large amount of money coming into Singapore from Hong Kong.

However, the reports may have been overstated as a number of wealth managers say they have not noticed any huge outflows from Hong Kong.

“So far, we have not seen any significant flow of money from Hong Kong to Singapore,” Piyush Gupta, group CEO at DBS Bank, said yesterday during the bank’s presentation of its quarterly results.

“While there have been some inquiries at the margin from customers, there is no significant shift. Even if there is some uncertainty in either Hong Kong or in China, [I do not expect] a tsunami of money coming this way in the next quarter. These things happen over long periods of time.

“Hong Kong is a very credible financial centre, so if [there would be outflows], it would be slow,” he said.

Even smaller firms, including Hong Kong-based independent financial advisers Pyrmont Wealth and The Capital Company, have not noted any shift of assets, as reported by FSA‘s sister publication International Adviser.

Capital Company even questioned how the media reports arrived at their conclusions.

“The practicalities of moving from one private bank in Hong Kong to another in Singapore, unless an account is already established, means you are looking at quite a few months to open an account,” David Benskin, partner at The Capital Company, told IA.

Key Hong Kong market

Separately, Gupta stressed the importance of Hong Kong in DBS’ overall strategy and said that it will continue to invest in the territory.

During the second quarter, net profit generated in Hong Kong amounted to S$304m ($148.2m), which accounts for 23% of the group’s total net profits, according to bank’s second quarter report. The bank has wealth management, personal and corporate banking businesses in the SAR, according to the firm’s website.

Gupta said that this year, it will focus on developing its digital offering, “Digibank”, in Hong Kong.

“Toward the latter part of this year, we are going to rebrand Digibank in Hong Kong and upscale this offering. We think that there is an opportunity to really change the game over there,” he said, without elaborating.

Launched in 2017 in Hong Kong, Digibank allows DBS customers to make bill payments, money transfers and time deposits and access market research and investment insights, according to the firm’s website.

The Hong Kong offering does not yet have other features that are available in Singapore, including having the option of purchasing mutual funds and exchange-traded products, the website shows.

Elsewhere, DBS has Digibank offerings in India and Indonesia. It also plans to bring the online service to Taiwan and Vietnam, according to Gupta.

AUM up

The bank also reported that its wealth management business performed strongly during the year. The segment’s second half total income rose 24% to a record high of S$1.5bn from S$1.3bn in the second half last year, according to the report.

Assets in the wealth management segment also increased 8% to S$234bn.

Income was up across the bank’s different businesses, including retail and corporate banking.

Overall, the group’s net profit during the first half was S$3.2bn, which is 11% higher than S$2.89bn during the same period one year prior.

Total income: retail and wealth management

Source: DBS Bank. In Singapore dollars.

 

Total income: corporate and SME

Source: DBS Bank. In Singapore dollars.

 

Part of the Bonhill Group.