Rich clients drive growth at CIMBT

Rich clients drive growth at CIMBT

CIMB Thai Bank (CIMBT) aims for 40% growth in fee income from its wealth management business next year amid higher investment demand from high-net-worth customers.

The bank expects aggressive growth in fee-based income contributions from the wealth management business, known as CIMBT Preferred, of roughly 60% this year, said Dusanee Klewpatinontha, executive vice-president for retail banking products.

She said the robust growth will continue, albeit at the slower pace of 40% next year because of the high-base effect.

Total assets under management (AUM) in the wealth management segment stands at 200 billion baht from 65,000 wealthy customers, whose AUM averages 3 million baht each.

The bank forecasts its total AUM to rise by 20-25% next year, supported by development in the three P's: people, products and process.

CIMBT, a small bank, plans to double the number of relationship managers from 35 to 70 next year by setting up a wealth academy for training staff. The bank is creating a mobile app exclusively for Preferred customers, to be introduced in September 2018.

Additionally, the bank will open an advisory centre to serve Preferred customers.

Under the open-architecture platform for mutual fund services, several investment products are on offer in line with the risk profile and requirements of clients.

Preferred customers' demand for higher-risk debentures, offering better returns, has continued to increase amid the upward trend in global interest rates.

"A lot of local corporate bonds are due to expire next year, so we will help customers to replace these existing debenture investments," Ms Dusanee said. "Foreign fixed-income funds are an alternative offering attractive returns. Despite the higher risk of the financial product, it doesn't matter for this customer segment."

CIMBT, in collaboration with four asset management companies, is offering mutual fund services under the open-architecture platform. The four are CIMB Principle (a bank subsidiary), One Asset Management, UOB Asset Management and MFC Asset management.

Of overall mutual fund sales to the bank's Preferred customers, 90% are contributed by CIMB Principle.

Ms Dusanee said demand for tax advice in the customer segment is also increasing as the government pursues tax reform, particularly for taxes related to land and heritage.

Moreover, the restructuring of personal income tax has spurred demand for financial advisory services, signalling greater opportunity for business growth next year.

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