The bank has won a green light to open a representative office in the Asian country, tapping into what it sees as strong potential.

Credit Suisse has won regulatory clearance to set up a representative office in the Philippines for its wealth management arm, part of a trend of firms pushing in to the Asian country. 
Switzerland’s second-largest bank announced yesterday it has received a licence from the Securities and Exchange Commission and regulatory approval from Bangko Sentral ng Pilipinas for the office.

The lender said it has been pushing into the country in recent months. In 2017 it appointed Michael De Guzman as country manager for Philippines and head of Philippines coverage for investment banking and capital markets. Christian Senn, a 30-year veteran of Credit Suisse’s private banking business, was also named as market group head for the Philippines in the Asian-Pacific part of the private bank, based in Singapore.

“The Philippine economy has grown steadily in the past decade, leading to rising household income and a higher standard of living. We expect exponential growth in the middle class in Philippines, rising from 33.5 million in 2015 to 50 million by 2025,” De Guzman said. 

A number of financial businesses have made hires in the Philippines or in connection with the country, tapping into what is seen as its growth potential. In November last year, Bank J Safra Sarasin appointed Bellen Chang as a managing director for client advisory in its ultra-high net worth team, focusing on the Philippines. A number of the major banks have representative offices in the country, such as Singapore-headquartered DBS; Bank of Singapore and United Overseas Bank. HSBC Private Banking has an office in the country; Standard Chartered’s private bank also is present in the country - in fact StanChart claims to be the oldest international bank in the jurisdiction, with a history there dating back to 1872.

There have been a number of news stories about the potential of the country in wealth management terms. Momentum seems to be building in the Philippines wealth and investment market. In late June, for example, Manulife, the financial services group, said its one of its business arms has got the green light to provide trust and fiduciary services business in the Philippines.

Data
Credit Suisse says its own research shows the country is expanding fast, creating wealth management opportunities. According to Credit Suisse Research Institute’s Global Wealth Report 2017, total household wealth in the Philippines grew by 10.7 per cent per annum since 2000 to reach $662 billion in 2017. 

Adults with net wealth of over $1 million also grew by over 13 per cent to reach 38,000, while the number of ultra-high net worth individuals with more than $50 million in net wealth also grew 13 per cent over the same period to over 400. These wealth segments are forecast to expand by more than 10 per cent a year in the next five years, the Institute has predicted.

The Institute also argues that as a high proportion of businesses are run by first- and second-generation families, there is a strong potential for wealth management services. The Philippines ranks 11th globally in terms of the number of family-owned businesses, and sixth within Asia Pacific ex-Japan in terms of average market capitalisation at $5.6 billion. 

“The representative office represents our first step in building and expanding our wealth management footprint in the market,” Benjamin Cavalli, head of private banking for Southeast Asia and CEO for Singapore, said.

Last year, this publication spoke to international law firm Baker McKenzie about the country and its wealth management dynamics.