Hong Kong's private banking assets hit $7.81t in 2017

More than half of total assets came from overseas locations.

The total assets of Hong Kong’s private banking and private wealth management hit $7.81b as of end-December 2017, according to a report by the Securities and Futures Commission. 

More than half (57%) of total assets under management (AUM) came from overseas investors, reaffirming Hong Kong’s growing status as a hub for Chinese offshore wealth.

“Hong Kong benefits from the growth in Chinese private wealth and the changing behaviour of Chinese HNWIs,” accounting firm Deloitte said in an earlier report.

Home to seven in fifty individuals who are worth over US$50m in 2017, Hong Kong trails only behind Singapore and Tokyo to rank as the third richest city in Asia and ninth globally. The SAR, together with China, is home to 5,140 individuals who are worth over US$50m in 2017, which accounts for 14.33% of Asia’s ultra-wealthy population, according to Knight Frank’s 2018 City Wealth Index.

The city’s proximity to the Mainland and the absence of taxes on capital gains, interest deposits and dividends are luring a greater share of the world’s wealthy to the SAR, Deloitte added.

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The maturing of the city as a wealth management centre is exemplified by the strongest growth amongst all the centres in average revenue and cost margins (by 1.6 % CAGR and 2.4 % CAGR respectively, 2013–2017E).

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Listed equities accounted for almost half (44%) of total AUM amidst a surge in both local and major overseas markets. Other assets were diversified into different product types including hedge funds, private equity, venture capital, bonds, cash and deposits.

In terms of geographical distribution, almost half (45%) assets were then invested into Hong Kong whilst North America accounted for a fight (21%) of investments followed by Europe, APAC and the Mainland.