BNP on Asian Wealth Mgmt Industry Opportunities

Bloomberg

Watch BNP on Asian Wealth Mgmt Industry Opportunities - Bloomberg on Dailymotion

Transcript

00:00When you take a look at what's happening in Hong Kong, those IPO after IPO after IPO,

00:05I mean, it must be creating a lot of new millionaires, a lot of wealth.

00:10How is that impacting what you're doing in Hong Kong?

00:16Yes, hi, good morning.

00:18It's been indeed an amazing year for the wealth management industry

00:22and for also our clients in greater China and particularly in Hong Kong.

00:27We can say Hong Kong has regained its footing, is back with indeed all of these IPOs.

00:34And, you know, I'm not too concerned about the timing.

00:38I'm not too concerned about any potential correction because what's important is that

00:44we have all of this wealth creation coming from China, coming from greater China.

00:50It's not just China, but Taiwan as well plays a very important role.

00:54And it has made investors and wealthy individuals and clients a lot more confident

01:02into investing into this market.

01:05Also, I agree with what was said earlier.

01:09Valuations in this part of the world are probably a bit better than what we can see in the U.S.

01:15and that makes us a lot more constructive into this market.

01:21You talk about how wealth is being created at scale.

01:24Give us a sense of how quickly wealth is being created.

01:28Is the wealth management business at an inflection point, you think?

01:33It is indeed in terms of wealth creation.

01:38But, you know, this industry has been navigating the cycles of the last five years pretty well.

01:46If we speak about BNP Paribas, we've been growing our top line more than 10 percent over the last five years.

01:54But indeed, there's clearly since last year, there's an inflection in terms of wealth creation and AUM growth.

02:02There's lots of wealth creation in greater China.

02:05I mentioned Hong Kong, mainland China and Taiwan.

02:09Let's not forget about Taiwan, which is doing amazing, not only in the microchip industry or AI-related business,

02:17but there is this network, this web of entrepreneurs in Taiwan that are still creating a lot of wealth.

02:25And Hong Kong, Singapore as well, but Hong Kong is playing its role as a gateway to all this wealth for being invested.

02:33And indeed, we saw an inflection point in 2024, but which is gaining momentum in 2025,

02:40where we see, of course, a lot more confidence into investment flows into greater China, Hong Kong, China.

02:50And this wealth creation is, of course, being channeled through the wealth management industry into global investments.

03:01We also see what's interesting.

03:03Sorry.

03:06Anu, what kind of AUM growth are you anticipating?

03:09And is that sustainable in the next two to three years?

03:16So, AUM growth is both a function of wealth creation, but also market performance.

03:23So, this year has been quite amazing.

03:25We assess that the wealth creation being channeled offshore was about 10%.

03:34If you combine it with a market performance of 5% to 8%, that's quite significant.

03:41As far as we are concerned, it's been an amazing year for us.

03:46We saw our growth of our assets by more than 20%, also growth of our top line by more than 20%.

03:55And we are still pretty positive on the medium to long term in China and in greater China.

04:03We see growth of addressable wealth growing from 7% to 10% according to the regions.

04:13If we look at Hong Kong, China would probably be around 7% to 8%.

04:17Taiwan, probably double digit.

04:20Southeast Asia, a bit less.

04:22But, you know, we're talking about Hong Kong becoming the largest wealth center in the world.

04:29And Singapore catching up fast.

04:31So, this is a clearly very exciting moment for this region.

04:36And we see this trend continuing.

04:39So, we are pretty positive about the outcome of this industry.

04:44And as I said, we're really talking, and that's what we are targeting as well,

04:48something like a double digit growth in terms of assets under management.

04:52Anu, my colleagues at Bloomberg Intelligence say that mainland Chinese could account for

05:02about 30% of new clients in the next three to five years, new rich clients in the next

05:07three to five years, from 26% currently.

05:11Do you agree?

05:12Could the number go higher?

05:16Absolutely.

05:16By the way, China has been our highest growth market this year.

05:23We've been fortunate to invest into new talents last year, which has helped us as well.

05:28It's a reason why we have also organized, reorganized our setup to make sure that we have, you know,

05:34we're dealing with offshore assets only.

05:37So, it's, of course, cross-border assets.

05:40But with the flow of IPOs, that's how this wealth is being created and being channeled to offshore hubs

05:50like Hong Kong and Singapore.

05:53And what we've seen is that our bankers covering China have been the most successful ones.

06:01What's interesting as well is that we see a lot more diversity into the type of entrepreneurs we see.

06:10We're talking about tech, but it's not only tech.

06:12We have a lot of innovation in many, many different sectors.

06:17And, of course, China is such a big pool of wealth, such a huge country.

06:23We can see a lot of differences in terms of business needs, in terms of expectations.

06:32You don't cover, in the same way, a sophisticated family office in Shanghai

06:36as you would do as an emerging entrepreneur in Sichuan.

06:40And that's why we need to have the teams that are really focused, sophisticated, knowledgeable.

06:45If you don't know China, there's no way you are going to be able to cover efficiently

06:49and bring value to this market.

06:51That's what we have done by building those new teams out of Hong Kong, but also Singapore.

06:57Anu, I'm just wondering how the wealthy Chinese are wanting to invest in this current environment.

07:04We know that a lot of the mainland Chinese are underinvested overseas.

07:09Is that changing?

07:14This is changing.

07:16And it's a very interesting phenomenon.

07:17When I was traveling to China five years ago, you know, my clients, the wealthy people,

07:23the wealthy clients were saying, OK, what I want from you is financing

07:27and I will be able to invest in businesses in China.

07:31And they learned their lessons, I think, sometimes the hard way, unfortunately.

07:35So now there's a need and a demand for diversification, professional asset allocation, but also new opportunities.

07:46For us, being a European bank, that's also a great opportunity because, of course, Chinese know their markets very well.

07:54They're also pretty knowledgeable about the U.S. market, but they are today fairly invested into U.S. market,

08:01which is probably richly valued.

08:04And we have a lot of questions about Europe.

08:07We have a lot of questions about opportunities in Europe.

08:10And I think we are very well placed to offer those opportunities.

08:13It's still, let's be honest, it's still a small part of their portfolios.

08:18But that's where the opportunity is to make it a more important part of their asset allocations.

08:23And I believe we are one of the best places to offer and advise and recommend on these opportunities.

08:29Anu, on the show, we've been talking about the trend of de-dollarization,

08:35how, you know, people are pulling back from U.S. assets.

08:38Are you seeing that when it comes to Chinese money, Chinese wealth?

08:43On the back of U.S.-China tensions, are they pulling back from the U.S.?

08:48Well, the dollar has weakened, as we know.

08:53So, of course, if you are not dollar-based, you are doing better by investing into other currencies.

09:02Do we see a major de-dollarization?

09:06Maybe not.

09:07But it's a trend that is starting, and we are convinced that it's going to intensify.

09:13A lot of interest in Europe.

09:15The euro is a lot stronger than it was at the beginning of the year.

09:18So, of course, for a dollar-based investor, having your portfolio into European assets,

09:24you are doing a lot better than having your portfolio in dollars.

09:28So, yes, we see that trend starting and continuing.

09:34But, you know, these things can move in cycles.

09:37So, right now, we probably have a bit of a move away from not only dollar, but dollar-based assets.

09:46Right.

09:46But, as you know, cycles can change, and we may see that reversing into the future.

09:54So, yes.

09:55So, yes.

10:07You know, let's start with the military.

Category

Transcript

Be the first to comment

Recommended