Banks race to capture growing affluent market

IT is becoming increasingly clear that wealth management – from priority banking to private banking – is rapidly becoming a key growth engine for banks.

This spans the mass affluent, emerging high-net-worth and ultra-wealthy segments, as lenders race to capture a larger share of clients’ financial lives.

Just this week, a slew of announcements underscored this pivot.

Hong Leong Bank Bhd (HLB) reimagined its affluent segment under the refreshed HLB Priority banner, moving from a transactional, product-led model to an advisory-driven approach tailored for high-net-worth individuals. It said HLB Priority will serve as a key engine of its three-to-five-year transformative plan.

Standard Chartered launched its first Priority Private Centre in Malaysia, targeting internationally mobile affluent clients.

The centre mirrors a globally proven wealth management model successfully rolled out in Hong Kong and Singapore – two rival financial centres competing for Asia’s fast-growing pools of private wealth.

Then there is UOB Kay Hian’s launching its new private wealth centre in Damansara Heights.

The Singapore-headquartered brokerage and wealth manager said its assets under management exceeds RM3bil, having grown 20% to 30% yearly over the past five years.

Outside the country, Swiss-based UBS this week also said it plans to hire roughly 50 bankers for its Hong Kong wealth unit, following record revenues from its North Asia business in 2025, while Singapore’s DBS Bank is recruiting 100 wealth management staff in Hong Kong over three years.

This comes as Hong Kong works to regain private banking business lost to Singapore, with single-family offices up 25% to 3,380 by end-2025, a news report dated Feb 10 stated.

One reason for this shift is mounting pressure on traditional banking revenue streams.

Net interest margins remain compressed amid competition for deposits, while stockbroking and investment banking face disruption and volatility amid subdued capital markets and geopolitical uncertainty.

Against this backdrop, wealth management stands out as one of the few scalable businesses offering recurring, fee-based income and stronger earnings visibility.

Income is derived from advisory and product fees, portfolio management, insurance and trust services, as well as interest income from tailored lending and margin financing.

The growth story is clear: the number of Malaysians with at least US$250,000 in financial assets is set to double over the next decade.

Yet, investor expectations remain high, with a DBS survey last year showing affluent clients seeking around 9% returns in 2025.