Rich see safer haven in local banks
http://www.businesstimes.com.sg/sub/...98613,00.html?
Published September 26, 2008
Rich see safer haven in local banks
They are taking lower returns in exchange for greater security
By SIOW LI SEN
LOCAL banks, normally seen as dull and not terribly imaginative, are now a preferred choice of the rich who seek a safe haven for their funds.
High net worth individuals typically place their millions with the international private banks which offer a wealth of innovative products, served up usually by teams of glamorous women private bankers.
In addition, these international banks spare no expense when it comes to pampering clients.
Local banks, on the other hand, are not known for their largesse when it comes to entertaining clients.
The glitzy F1 event starting today is a case in point. Of the three local banks, only OCBC Bank is inviting clients to party.
But for some clients, lower returns in exchange for greater security at a local Singapore bank, rather than F1 excitement, is precisely what they want.
Said Kwong Kin Mun, DBS Bank managing director and head, private banking group (South Asia): 'We have seen an inflow of funds from clients wanting to diversify their risk portfolio by reallocating their investments with different banks.
'These clients are basically not holding on to the too-big-to-fail argument anymore and rightly so. This is even more evident over the past couple of weeks.'
Sensing opportunities from rich depositors looking to diversify their holdings, United Overseas Bank took out a full page advertisement on Wednesday targeting those with $1 million.
It offered to pay 1.708 per cent for a 13-month fixed deposit for amounts of at least $1 million.
This compares to the earlier offer of 2 per cent by HSBC for a 12-month fixed deposit for amounts of between $50,000 and $1 million.
Eddie Khoo, UOB executive vice-president for personal financial services, said that the bank tries to offer consumers competitively priced products to match their financial objectives and risk appetites.
This is regardless of market conditions.
'That said, we acknowledge that different market situations present customers with different challenges and opportunities to manage their money. For example, customers tend to seek out 'safer' avenues for their money during periods of uncertainty and high market volatility, and they sometimes see deposits as an option,' said Mr Khoo.
OCBC Private Bank said that regardless of market conditions, it would proactively seek out investment opportunities for its clients.
'We dynamically engage and help our clients to manage their investments and realign their strategies to changing market conditions,' said Olivier Denis, head of private banking at OCBC Bank.
