UBS AG and Citigroup Inc said they are hiring more private bankers to serve Taiwan, where the richest citizens hold more wealth than in any Asian country except for China and Japan.
UBS will add 30 private bankers here this year for a total of 80, Dennis Chen (陳允懋), who oversees the company's onshore private-banking business in Taipei, said in an interview.
Citigroup, Morgan Stanley, BNP Paribas and ABN Amro Holding NV said they will also add bankers to cater to the nation's wealthy.
Taiwan had 210,000 citizens at home and abroad with net assets of at least US$1 million in 2005, controlling about US$585 billion of wealth, according to the Boston Consulting Group, which advises private banks. Taiwan trailed China by only US$215 billion, but has only less than 2 percent of the latter's population.
"Taiwan is not only an amazing market when you look at its net-worth per capita, but also a very deep market in terms of wealth concentration," said Peter Tung, a managing director for Morgan Stanley's Private Wealth Management in Asia.
People with at least US$5 million in assets own 15 percent of Taiwan's financial wealth, Boston Consulting estimates, almost twice Australia's 8 percent.
Taiwan's rich also generate higher-than-average revenue for private banks because they use more services and trade investments more actively, said Tjun Tang, a Hong Kong-based managing director of Boston Consulting.
Private banks earn about 1.5 percent annually managing offshore assets of Taiwan citizens, compared with 0.95 percent for all of Asia, Tang said.
Taiwan's wealthy are seeking private bankers, often offshore, because of insecurity over tensions with China and high tax rates, Chen of UBS said.
Private bankers, who often require that clients have at least US$1 million in assets, provide customized services that include advice on taxes and managing investments and inheritance plans.
Taiwan's inheritance tax of up to 50 percent is among the highest in Asia. Hong Kong has no such tax, while Singapore's is up to 10 percent. Also, the nation's top personal income tax rate of 40 percent is more than twice that of Hong Kong.
High taxes make Taiwan "so unattractive" for the wealthy to park money compared with locations such as Hong Kong, said Sherry Lin (
The nation's wealthy may try to move more money offshore before a tax on overseas income takes effect as early as 2009 and the government tightens monitoring of funds sent overseas.
Citizens can move up to US$5 million out of Taiwan each year without needing approval from the central bank.
Political tensions across the Taiwan Strait has also increased demand for safe havens.
"We have noticed accelerating outflows in the past two years," said Oliver Yu, a senior manager of PricewaterhouseCoopers LLP in Taipei, adding that the nation's rich most often stash their money in Hong Kong and Singapore, but increasingly also in Switzerland.
Offshore private banking has also flourished to serve successful entrepreneurs active abroad, including in China, Vietnam, Malaysia and Singapore. Citigroup keeps a "significant portion" of its team serving the island's rich in Singapore and Hong Kong, said Richard Straus, a global marketing manager for its private-banking business for Taiwanese.
Issues can arise for private bankers that operate offshore. They aren't allowed to solicit clients living in Taiwan by telephone or on visits to Taiwan, Financial Supervisory Commission Deputy Chairwoman Susan Chang (
The restrictions aren't severe enough to slow the flow of individual assets overseas, said Sabrina Wang, who is a manager at PricewaterhouseCoopers.
Wealthy Taiwanese move money offshore partly because of a wider selection of investments than at home.
"People have far more and better opportunities to grow assets abroad," Wang said.
CHIP CRUNCH: Apple’s woes show that even the king of the technology world is not immune from global shortages made worse by the COVID-19 pandemic Apple Inc is likely to slash its projected iPhone 13 production targets for this year by as many as 10 million units as prolonged chip shortages hit its flagship product, people with knowledge of the matter said. The company had expected to produce 90 million new iPhone models in the final three months of this year, but it is now telling manufacturing partners that the total would be lower because Broadcom Inc and Texas Instruments Inc are struggling to deliver enough components, the people said. Apple gets display parts from Texas Instruments, while Broadcom is its longtime supplier of wireless components. One Texas
EVA Airways Corp (長榮航空) and China Airlines Ltd (中華航空), the nation’s two major airlines, reported accelerated revenue growth in the third quarter compared with the previous two quarters, thanks to robust air cargo business. EVA Airways yesterday said sales for last quarter rose 40 percent year-on-year to NT$25.81 billion (US$917 million), compared with an increase of 25 percent in the second quarter and a fall of 35 percent in the first quarter. China Airlines said sales grew 39 percent to NT$34.6 billion in the third quarter, after gaining 10 percent in the second quarter and falling 14 percent in the first quarter. EVA
‘SHORT-TERM ECONOMIC PAIN’: A military takeover would only temporarily weigh on wafer production on both sides of the Taiwan Strait, IC Insights said Taiwan has more chip manufacturing capacity than any other economy in the world, US-based market information advisory firm IC Insights said in a research paper last week, cautioning that the nation’s strength could prompt China to attempt to take over Taiwan. Taiwan commanded 21.4 percent of global installed IC capacity, ahead of South Korea’s 20.4 percent, Japan’s 15.8 percent and China’s 15.3 percent, North America’s 12.6 percent and Europe’s 5.7 percent, IC Insights said. Taiwan is one of two countries that uses 10-nanometer technology or better to produce wafers, holding 62.8 percent of global capacity, with South Korea holding the remaining 37.2
PRICE SPREAD: Oil trading under the Brent futures contract is giving the US a hefty edge in pricing, increasing the rush to secure cheap fuel as winter approaches Asian demand for US oil is rising as the energy crisis boosts prices for other crudes that are priced against the global Brent futures contract. China and other Asian buyers have been snapping up supertankers of US oil for delivery next month and seeking more for December, some traders have said. Most buyers are seeking US grades that had recently slumped to the lowest levels in more than a year, with an added incentive after Beijing awarded millions of tonnes of crude oil import quotas. A wide spread between Brent and West Texas Intermediate (WTI) oil futures is accommodating higher US crude
RSS