European wealth to flow swiftly into Singapore
Reuters, Singapore
The world's major private banks are beefing up operations in Singapore, anticipating that up to a trillion US dollars worth of offshore assets in Europe may be looking for a new home in the next couple of years. Changes in banking secrecy and tax laws due to take effect in the European Union from 2005 are expected to encourage offshore investors in traditional havens like Switzerland and Luxembourg to start moving their money to other centres.Singapore, with its stable political system and excellent infrastructure, is seen getting a big share of this money. "We have estimated that from Europe about a (US dollar) trillion plus could be highly movable without too much difficulty," said Roman Scott, vice-president at the Boston Consulting Group (BCG). "Some of those guys are going to say; 'I need an offshore centre that's not going to be squeezed down.' All the European places are being squeezed. You can't go into the US, so you suddenly start to look at Asia as attractive," he said. BCG, which uses $250,000 as the threshold to measure wealth, put assets in Europe of the wealthy at more than 10 trillion US dollars. Already, Swiss giants UBS, UBSZn,VX and Credit Suisse CSGZn.VX have reinforced their presence in the city state. UBS earlier this year launched its wealth management centre while Credit Suisse last year set up its first global private banking office in Singapore, with a staff of 200 from 18 nations. And SG Private Banking, the arm of banking group Societe Generale SOGN.PA, recently hired the former Southeast Asia head of Credit Suisse Private Banking, Pierre Baer, as a director in the city state specifically to win European business. "The trend will fuel a very strong growth in our assets under management and also in Singapore as a financial centre," said Daniel Truchi, SG's Asia-Pacific Chief Executive Officer. Truchi said inflows from Europe were partly responsible for the 30 per cent growth in SG's Asian (ex-Japan) assets as at end-June from a year earlier. He said the flows could total 10 to 15 per cent of its current asset base in 12-15 months and thereafter rise to 20-25 per cent. SG ranks among the top 10 private banks in Asia and while it does not give out figures, an industry source estimates it manages assets of about seven billion US dollar in the region. Scott of BCG estimates that Singapore and Hong Kong together hold about 500 billion dollars in offshore wealth, with Hong Kong having a bigger share but the territory could lose out to the city state because of investor's unease over Chinese control.
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