BNP bets Hong Kong's IPO boom will add to wealth momentum
Chinese companies are lining up in droves to list in Hong Kong this year, sparking a frenzy in a market that has been forsaken by investors and companies for years.
'There's still a lot of entrepreneurship, wealth creation, with opportunities for the Chinese to list their businesses in Hong Kong,' said Arnaud Tellier, head of Asia wealth management at the French bank. 'That's how a lot of assets are transferred offshore in a fully legal manner.'
Hong Kong, a key booking hub, has already seen a strong return of money from rich mainland Chinese, a reversal from the pandemic period, according to Tellier.
The Asian financial hub has been stepping up efforts to attract the wealthy with tax concessions and residency plans. Hong Kong's private wealth assets under management could nearly double to US$2.3 trillion by 2030, potentially surpassing Switzerland as the world's top cross-border wealth centre, according to Bloomberg Intelligence. Singapore, meanwhile, has been grappling with a major money laundering scandal.
'During Covid, 100 per cent of the mainland wealth flows went to Singapore,' Tellier said. 'Now, it's about 60 per cent to Hong Kong, 40 per cent to Singapore.'
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BNP has increased its wealth assets under management across Asia to US$105 billion, up from about US$80 billion at the start of 2024, according to Tellier. It added some US$8 billion in net new money this year, and US$9 billion last year. The increase in wealth revenue was driven by transactions, fees, lending, deposits and inflows, he added.
This year, the French bank added a net 20 bankers, including a team of about six bankers from China Merchants Bank International and it continues to hire, said Tellier, though he declined to give a target.
BNP is also expanding in Taiwan, where the lender has gotten the nod from regulators to offer wealth management services to high-asset clients. The bank also plans to apply for a license in the new Kaohsiung special economic zone, which will open up 'a lot more opportunities' such as making portfolio financing easier, according to Tellier.
Wealth in Taiwan has been growing among tech moguls due to an artificial intelligence boom. BNP has about US$5 billion of assets under management in Taiwan and aims to increase the number of relationship managers to 50 within the next two years, up from about 35 currently, he said.
Roughly two-thirds to three-quarters of wealthy Taiwanese's financial assets are offshore, according to Tellier. Amid rising geopolitical tensions, the French lender is perceived to be more neutral.
'As a strong large European bank, we are seen as being not fully involved in the US-China tensions and trade war,' said Tellier.
The lender has no plans to expand in China, even though it expects 'significant wealth creation' in the nation despite the headwinds including slower growth, he said.
'In the past, we have looked at China, we looked at India, we looked at Australia, we looked at Indonesia, and we have made the choice not to be there,' he said. 'We operate where we think we can add value to our business and our clients.' BLOOMBERG
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