Article

The upcoming battle for Asian bank deposits

Asia has a thrifty population, but winning their deposit business will be tough.

Par Sameer Chishty and Edmund Lin

First published on novembre 10, 2008
min


If you have to be a banker during the global financial crisis, the best place to be is Asia. The region is home to a thrifty and conservative population that already holds 60% to 80% of its wealth in bank deposits. And Asian bankers can expect even more deposits as investors flee equity markets in the continuing credit crisis. Indeed, Asian investors are shifting their money not only out of stocks and bonds but also from multinational banks—in the belief that local and state-owned banks are sounder. While this deposit surge may seem like a sudden abundance of riches, it won't be evenly distributed. Nor will it be cheap. What's shaping up is a fierce battle among Asia's banks to win these swelling deposits and still make adequate returns. In a surprising twist with enormous implications, today's situation is just the opposite of what regional financial institutions faced a decade ago, when the Asian financial crisis devastated local banks. Years of market reforms and new management disciplines have paved the way for the reverse flight to quality. Read the full article at BusinessWeek.com. Sameer Chishty and Edmund Lin are partners with Bain & Co. and are based in Hong Kong and Singapore, respectively. Both are members of the firm's Asian financial-services practice.

If you have to be a banker during the global financial crisis, the best place to be is Asia. The region is home to a thrifty and conservative population that already holds 60% to 80% of its wealth in bank deposits. And Asian bankers can expect even more deposits as investors flee equity markets in the continuing credit crisis. Indeed, Asian investors are shifting their money not only out of stocks and bonds but also from multinational banks—in the belief that local and state-owned banks are sounder.

While this deposit surge may seem like a sudden abundance of riches, it won't be evenly distributed. Nor will it be cheap. What's shaping up is a fierce battle among Asia's banks to win these swelling deposits and still make adequate returns.

In a surprising twist with enormous implications, today's situation is just the opposite of what regional financial institutions faced a decade ago, when the Asian financial crisis devastated local banks. Years of market reforms and new management disciplines have paved the way for the reverse flight to quality.

Read the full article at BusinessWeek.com.

Sameer Chishty and Edmund Lin are partners with Bain & Co. and are based in Hong Kong and Singapore, respectively. Both are members of the firm's Asian financial-services practice.