UBS breaks ranks with push for mid-tier Asian millionaires

Sumeet Chatterjee

* To hire 100 client advisors in Hong Kong over two years

* Had $286 bln worth of assets in Asia as of end 2016

* Regional banks crowding low-and-mid-segment of wealth

market

* StanChart to raise wealthy client threshold to at least $5

mln

HONG KONG, May 4 (Reuters) - UBS Group AG plans to

hire about 100 wealth management client advisors over the next

two years in Hong Kong, the biggest wealth hub in Asia-Pacific,

to grab a bigger share of the fast-growing mid-tier millionaire

segment.

The Swiss bank's sharpening focus on the middle of the

wealth market comes as some global banks including Standard

Chartered are raising the threshold for their private

banking clients amid growing competition from regional players.

"For us, the sweet spot is high-net-worth clients with

investable assets of between $2 million and $50 million,"

Jean-Claude Humair, regional market manager for Hong Kong at

UBS, a bank known for its billionaire client list, told Reuters.

"We see tremendous untapped opportunity in the entrepreneurs

segment in Hong Kong," he said. "The plan is to hire 50 client

advisors in Hong Kong every year for the next two years to cater

for these HNWIs (high-net-worth individuals)."

With $286 billion worth of client assets as of end 2016 and

about 1,100 client advisers, UBS is the largest private bank in

Asia, followed by Citigroup and Credit Suisse Group

, as per industry tracker Asian Private Banker.

During the first quarter, a rebound in markets trading

generated record wealth management revenues and profit before

tax at the Swiss bank in Asia-Pacific, which has emerged as a

key battleground for global wealth managers.

With more than five million people boasting at least $1

million in liquid assets, Asia is the fastest-growing wealth

region globally, according to data from Capgemini.

UBS is shifting focus because the mid-segment is growing

faster than the top-tier, or the ultra-high-net worth segment,

which the bank classifies as individuals with more than $50

million in investable surplus.

BUCKING THE TREND

The high-net-worth business offers a better return on assets

than that offered by the ultra-rich segment, UBS's Humair said.

The bank already covered three out of five billionaires in the

region and almost 90 percent in Hong Kong, he added.

With a host of local and regional banks crowding the

low-and-mid-segment of the market, many of UBS's global private

banking rivals have raised their minimum wealth thresholds in

the last couple of years to jump clear of rivals.

Standard Chartered's private banking business plans to raise

the threshold from $2 million to at least $5 million over the

next two years to optimise resources, a Standard Chartered

spokeswoman said.

She added the bank would continue to serve existing clients

with assets of $2 million to $5 million.

JPMorgan last year doubled its target client segment

to at least $10 million in Asia.

Meanwhile, regional banks including DBS Group have

bolstered their presence in the millionaire segment via

acquisitions. DBS, Singapore's biggest lender, on Tuesday

reported record first-quarter profit for its wealth management

business.

"I do believe we continue to gain share," DBS Group CEO

Piyush Gupta said. "It's mostly from smaller players. I don't

think we are gaining market share against UBS, for example. UBS

continues to grow as fast, if not faster than we do."

According to Capgemini, the ultra rich segment - which it

defines as individuals with $30 million or more in assets - make

up just 0.7 percent of Asia's wealthy population, with the rest

accounted for by those with $1-$30 million in assets.

Total household wealth in Asia Pacific grew by 4.5 percent

in 2016 from a year ago, compared to a drop of 1.7 percent in

Europe and 2 percent growth in North America, according to

Credit Suisse global wealth report.

(Reporting by Sumeet Chatterjee; Additional reporting by

Anshuman Daga in Singapore; Editing by Stephen Coates)