Household debt 'slows expansion of high net worth individuals'
Kasikornbank does not expect the number of high-net-worth individuals in Thailand to increase as much as before because the high level of household debt is holding back the middle class from getting richer.
Over the past five years, the number of high-net-worth individuals in Thailand increased by 12.7 per cent per year, against average growth of this class in the Asia-Pacific region of 9.5 per cent. In that period, their assets in Thailand grew by 14.4 per cent a year on average, higher than the regional average of 10.4 per cent.
KBank defines a high-net-worth individual as one with assets under management of at least Bt50 million.
Pakorn Partanapat, senior executive vice president of KBank, said most wealthy Thais were corporate executives, and they had sufficient resources against impacts from the economic slowdown.
"The wealth of this kind of people will not drop, but the trend of people becoming richer will not increase as much as in the past five years because household debt is a challenge," he said.
At KBank over the past five years, the number of high-net-worth individuals and value of their assets has increased by 10 per cent per year. There are now 8,700 of these people banking at KBank, representing 40 per cent of this market worth almost Bt700 billion.
About 10 per cent of KBank’s 8,700 rich clients have invested in international markets, and this trend is expected to grow.
KBank has teamed with Lombard Odier, a Swiss provider of private banking services, to help KBank serve family businesses and the growing trend of rich Thais investing overseas.
Lombard Odier specialises in consultancy services for family-business successions as well as single-family office financial management, which are also the focuses of KBank.
Under the agreement with Lombard Odier, KBank’s rich clients will receive full-fledged financial and investment services, while KBank will also be upgraded to an international-standard private-banking service.
Pakorn said that having a leading private-banking partner would enable KBank’s clients invest in various foreign funds according to the risk profile of each individual.
Lombard Odier did not have any Thai clients, so this partnership will help it service customers here, especially wealthy people thinking about their descendants’ inheritance, he said.
Under the agreement, KBank will leverage the know-how of Lombard Odier in six issues, consisting of advisory, research, branding, human capability and technology, products, and family business.
Pakorn said the partnership with the Swiss private-banking firm would help improve the yield on rich client’s assets significantly, as Lombard Odier is well known for its prowess in this area.
