KBank remains confident for investments in 2018

Jirawat Supornpaibul, Kasikorn-bank’s private banking business division head, said its number of clients classified as high-net-worth individuals (HNWI) is expected to rise to 10,500 by the end of this year up from 9,800 last year. KBank has the largest share of that market, estimated to be 34 per cent, said Jirawat. 
The bank has taken advantage of the growing number of rich people in Thailand, which is estimated to reach 30,800 by the end of next year. The definition of a HNWI in Thailand is someone who has assets under management (AUM) worth Bt50 million or more.
Competition in wealth management for HNWI is high, as foreign financial institutions are also active in the local market. These include Citibank Thailand and Credit Suisse.
“We can compete in the market as we also have partnership with Lombard Odier [a Swiss private bank], which focuses on wealth management service for HNWI,” Jirawat said. 
He revealed that AUM of the KBank private banking division this year dropped two per cent to Bt 744 billion compared with Bt759.5 billion last year. “The headline number is not an issue, since we have significant positive figures in details,” said Jirawat.
First, many clients have turned their deposits into investments, said Jirawat, adding that investments represent 68 per cent and deposits 32 per cent, up from a ratio of 63:37 last year. This is moving towards the target of an 80:20 ratio, which KBank expects to reach in the next two years, he said. 
HNWI clients are willing to take on more risk to get higher returns from their investments while deposit rates remain low, according to Jirawat. He said these investors had more knowledge about financial investment, which had led to a rise in the portfolio of sophisticated asset growth at 28 per cent to Bt73.4 billion compared with Bt57.4 billion last year. 
This has boosted investment-fee income for KBank private banking, which is up 27 per cent this year. The bank offered four types of investment fund for rich customers to choose from, and both had had good returns ranging from 8 to 25 per cent, according to KBank. 
The returns were in line with the November index for MSCI Asia, excluding Japan, which yielded returns of 39.6 per cent on equities, 33.9 per cent in MSCI emerging markets and 17.6 per cent in MSCI developed markets.
“It is a wonderful year for us and our customers,” said Jirawat. 
Investment in fixed income also yielded good return as the global government bond market rewarded investors with 7.29 per cent returns and the global high-yield bond market had returns of 9.5 per cent in November. Returns on the property market also rose, with return on Thailand’s REITs rising 3.1 per cent and Asian REITs 5.4 per cent. 
Looking ahead into 2018, KBank plans to introduce a new fund focusing on global hybrid products, environment and social-impact bonds, private equities and alternative risk premiums, said Jirawat. 
KBank was optimistic about the 2018 investment outlook due to subdued inflation, gradual rate tightening, and a steady global macroeconomics landscape led by Asia and emerging markets. Improved corporate earnings should support asset valuation. The price of financial assets may be high but not expensive, so investors should keep invested but be prepared, added Jirawat.