competition for private bankers to Asia reducing profit margins

The competition for private bankers to Asia to reduce profit margins for companies wealth management as more companies enter the market, "said Hanspeter Brunner, CEO of BSI SA, for the region.

Cost to income ratios in private banking in Asia, usually between 70 and 80 percent, is near the top of the range in the coming years, Brunner, 58, said yesterday in a interview in Hong Kong.

Barclays Plc, Morgan Stanley and UBS AG are among banks that spread the wealth management units in Asia, booming economies created more millionaires in China, India and Indonesia.

China Construction Bank Corp said this month it will begin offering private banking services in Hong Kong.

Lugano, Switzerland-based BSI entered Hong Kong in 1981, settled in Mexico in 2005 and established a representative office in Shanghai last year. The company, which employs 2,590 people worldwide in 2009, increased its workforce by eight in Asia since last year to 250 now.

The bank plans to add 50 to 70 employees in Hong Kong in late 2011, almost doubling the size of your local computer, according to Esther Heer, deputy executive director of the Asian unit of BSI.

"We intend to have a maximum of 350 to 400 people in the region," said Heer, 53. "We will not put pressure on ourselves that we must recruit every year."

Hiring costs

BSI oversaw 75.4 billion Swiss francs (77.8 billion U.S. dollars) of assets of wealth from November, with Asia accounting for just over 10 percent, according to Brunner. The bank plans to increase the proportion of assets managed in Asia to 25 percent in five years.

The number of millionaires in the Asia-Pacific region grew 26 percent to about $ 3 million in 2009, matching Europe for the first time, according to a study conducted by Capgemini SA and Merrill Lynch Wealth Management. The number of high net worth individuals in China increased 31 percent to 477,000 years past, the report showed.

Wage increases helped to increase the efficiency ratios of income to fund managers in Asia and 86 percent in 2009 from 61.8 percent two years earlier, according to data compiled by industry consultants at Boston Consulting Group. The relationship of the Swiss banks increased by 12.9 percentage points to 66.7 percent in the same period.

"Most expensive"

Hiring next year "will be more expensive than 2010. And ensure that 2012 will be more expensive than the 2011 unless there is another major correction," said Brunner. "The good news is the size of the pie is growing, too."

While BSI serves wealthy individuals in Hong Kong of China, is currently barred go directly to the mainland market. The company has not made a final decision on how to expand in China, said Brunner.

"One of the interesting opportunities would land the private banking market in China", he said. "It is very well developed at this time, but within the next five to 15 years will see a very solid, very large banks on private land in China."