Bangkok--19 Dec--KASIKORNBANK
With the launch of investment innovations throughout 2019, KBank Private Banking (KPB), as a leading private banking provider in Thailand, can declare an astounding success after raking in 14 outstanding private banking awards from nine world-class institutions. Moreover, it grew customers' portfolio by 12.5 percent despite a highly volatile market. KPB has also announced the continuation of its collaboration with Lombard Odier, now in its fifth year.
Mr. Jirawat Supornpaibul, KBank's Private Banking Group Head, said, "The global market has witnessed high volatility this year, thus investment is a challenge. KBank therefore focuses on development of investment innovations for risk management that offer satisfactory returns to ensure diversified portfolios in the midst of the late-cycle global economy. KBank holds the view that there is a good opportunity for our customers to adjust their investment portfolios and shift to K-Alpha, focusing on a risk-based allocation strategy, and alternative investments such as gold and over-the-counter stocks in order to control risk. As evidenced, K-Alpha portfolio has thus far grown 12.5 percent, with its risk standing at 4.5 percent. Therefore, the portfolio's risk-adjusted return is as high as 2.8 times.
The product and service innovations recommended to our customers have enabled KBank to win a total of 14 awards related to private banking, from nine international institutions. These include "Best Private Bank in Thailand" awards from Asian Private Banker, Finance Asia and The Asset, plus "Best Private Bank in ASEAN" from The Digital Banker. Aside from the "Outstanding RM Training and Development Program" award, which reflects our leadership in human resource development, KBank has also won the "Outstanding Wealth Management Technology Initiative - Back Office" award from the Private Banker International Global Wealth Summit and Awards 2019, in recognition of our leadership in private banking business technology. We have also received the "Best Private Bank for Digital Culture Asia" award and "Best Private Bank for Digitally Empowering Relationship Managers Asia" award from PWM's second annual Wealth Tech Awards, highlighting our success in the private banking business.
Key products and services offered in 2019 include:
- To brace for the late-cycle global economy, we have recommended that our clients adjust their investment portfolios and reduce overall risks by raising the proportions of investment in core portfolios, safe haven assets and cash, as well as reducing risks from growth stocks, while focusing on innovation-based funds, as follows:
1. Sustainability Fund (K-CHANGE): The fund invests in companies that attach importance to the environment, society and governance (ESG) for sustainable growth over the long term, including those creating positive impacts to the world.
2. Private Equity Fund: The fund invests in private equity worldwide, and is the first-ever private equity fund in Thailand.
3. Fixed Maturity Fund: The fund invests in fixed income instruments in Asia for a specific investment period. It generates higher returns than interest rates, which are on a downward trend, and automatic redemption of investment units as scheduled upon maturity.
4. New Risk-based Allocation Fund (K-GLAM): The mixed fund uses a risk framework to control portfolio adjustment.
- Family wealth planning service and non-capital market investment were first introduced in Thailand by KBank Private Banking in 2015. Also, KBank Private Banking has steadily improved other services by, for example, helping our clients establish their family governance, family constitution and family office, and providing them recommendations about the use of their land. This year, our clients are particularly concerned about their tax planning, especially issues related to the new Land and Building Tax Act. We have advised our clients on tax liability management through the Land Loan for Investment project, which has attracted strong interest from the customers, translating to over 12 billion Baht of combined land value and around 6 billion Baht of total financial facility.
"KBank Private Banking's business operation in 2019 continues to grow with 11,600 customers and assets under management (AUM) worth around 750 billion Baht; investments worth 450 billion Baht, up 7 percent; and a 24.7-percent rise of investment in complex assets YoY. In 2020, KBank will continue to offer the most comprehensive personal finance advisory service in Thailand and strengthen its partnership with world-class wealth manager Lombard Odier. The first KBank Private Banking Lounge will be launched at EmQuartier department store to increase customer convenience thanks to its prime location often frequented by our customers, which is also in the same building as KBank Private Banking's office. This will enhance our brand visibility and reaffirm our successful collaboration with Lombard Odier," Mr. Jirawat added.
"Despite the world economy continuously showing signs of slowdown, KBank does not anticipate a recession in the next 12 months," said Mr. Jirawat. "We think that the world's capital markets will continue to be highly volatile next year, which could easily trigger market panic. Investment will become more difficult, with major risks coming from political uncertainties due to international trade disputes and the 2020 US presidential election. KBank has come up with five strategic investment recommendations for our clients next year: 1) Diversify risks and increase flexibility in their investment portfolio; 2) Safeguard their portfolio with safe assets such as gold, and apply hedge funds' equity long/short strategy; 3) Focus on carry strategy for high-yield assets which generate higher interest rates; 4) Apply a cautious approach for stock investment by choosing business groups with solid net profit growth, such as stocks in healthcare, technology and energy segments, as well as stocks of some attractive emerging markets; 5) Create additional returns on alternative assets such as real estate, private equity funds and infrastructure, which are less volatile in terms of market price but are suited to long-term investment of more than five years. They should represent a small proportion of the portfolio," Mr. Jiriawat concluded.