It formed up to 44% of banks' commission income in 1H17.
Between 2016 to 2Q17, Maybank Kim Eng said banks’ AUM grew decently by between 5-7%, thanks to their wealth franchise. Wealth management (WM) fees continued to drive revenue contribution, which grew by 24-43% YoY and 32-55% YoY across the banks in 2Q17 and 1H17 respectively. In 1H17, WM fees formed 26-44% of total net fee and commission income across the banks. This was partly attributed to positive market sentiment as compared to a year ago.
Here's more from Maybank Kim Eng:
DBS and OCBC are more aggressive in the WM space, partly through inorganic acquisitions. For DBS, if we remove the amortized quarterly contributions of SGD26.5m/quarter from the Manulife bancassurance partnership, WM fees grew by 37% YoY and 43% YoY in 1H17 and 2Q17 respectively.
OCBC’s growth is more pronounced, as WM fees rose 56% YoY and 43% YoY in 1H17 and 2Q17 respectively, partly due to the acquisition of Barclays’ wealth and investment management business in Nov 2016.
WM is a prominent growth avenue for the banks, as Asia Pacific will be one of the fastest-growing regions for the WM space. We expect Singapore banks’ WM fees to be in double digit growth over FY17-18E.
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