Local banks have experienced a 97 percent surge in high-net-worth clients to 3,660 in a nine-month period, from 1,851 at the end of March, as Taiwanese business owners repatriated funds from overseas, while profits expanded from earnings, Financial Supervisory Commission (FSC) data showed.
The assets under management (AUM) of those high-net-worth individuals soared 95 percent to NT$456.3 billion (US$15.03 billion) at the end of last month from NT$233.7 billion at the end of March last year, indicating that each of those clients has seen their assets rise to NT$124 million on average, the data showed.
The FSC last year granted three additinal approvals to local banks to offer the wealth management services specifically targeting wealthy individuals as demand increases.
Photo: Wang Meng-lun, Taipei Times
To cater to the needs of such clients, local banks have introduced new products such as the foreign-currency denominated structured notes offered by Mega International Commercial Bank (兆豐銀行) and First Commercial Bank (第一銀行).
However, most such clients prefer deposits for investments, FSC data showed.
A total of 49.2 percent of the high-net-worth individuals’ combined assets were put into savings, followed by insurance products with a weighting of 17 percent, fund investment at 12 percent, bond investment at 8 percent and investment in foreign-currency denominated structured notes at 5 percent, the data showed.
Such clients might be using bank deposits to hedge against risks presented by the new financial products, the FSC said.
CTBC Bank Co (中信銀行) ranked first among nine banks approved to offer the new wealth management programs, with 1,303 high-net-worth clients and AUM of NT$128.9 billion, the data showed.
Mega International Commercial Bank placed second with 695 clients and AUM of NT$102.6 billion, followed by First Commercial Bank with 450 clients and AUM of NT$72. 2 billion, the data showed.
The FSC in 2020 launched new wealth management rules that would allow eligible banks to operate wealth management programs for high-asset customers for three years.
As CTBC Bank, Mega Bank and First Bank received approval in 2020, they must apply for an extension this year to continue participating in the program.
An analysis of each bank’s internal risk controls, handling of questionable funds, employee training and creative strategy is part of the extension review process, it said.
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