Vietnam Wealth Management Forum 2019 - Exclusive Insights - Gauraw Srivastava
Sep 19, 2019
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1. Why are you building a wealth management business in Vietnam?
Video transcript
1. Why are you building a wealth management business in Vietnam?
I think it brings interesting opportunities for shareholders. Essentially, the banks in Vietnam have been making money through lending products, and to lend the money, they raise deposits and, therefore, the entire balance sheet is filled with interest income. We know, from our experience in many markets, that there can be credit cycles that can put pressure if your entire income is coming from a single line of products. A lot of advisory boards, which are advising their own principal consultants in the market, the boards are being reached out to, and they're being advised that there is need a for you to deleverage your balance sheet from an income and add a lot more fee income. Now, that coincides well with the opportunity that this market presents. There are more and more wealthy people, the wealth creation is happening at one of the fastest rates in Southeast Asia, and therefore it's a fantastic opportunity for the banks like us to go after this space, capitalise and leverage our brands, talk to our high net worth customers, and show that we stand for many more products, rather than just deposits. So our priority banking is shifting away only from premium pricing to a greater product-focus which, in turn, allows us to generate a better return on assets for our clients and offer wider product choices. Therefore, the clients are happy, we get more clients; it's a reference market. In turn, we get better assets under management, a better wallet share with clients. Clients are happier with additional returns, and banks, they can ensure a lot of shift in terms of their balance sheet and income mix. Mind you, it's not only about the investments or capital markets that we're talking about. For the last four or five years, the bank assurance space has taken a big leap. A lot of insurance companies have got in to ties with the principal partners on the banking side. Banks have been raising a lot more volume on that side. This is good for the client; we are talking about protection, which is an essential need in the portfolio before you start using appreciation. So, we sell the concepts we recognise we need, so clients are being benefited, and banks have been able to get a lot more revenue out of this product line. So, I think it's fantastic for each stakeholder in this market and mixed profit case to build a wealth management business in Vietnam.
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