Kasikornbank (KBank) remains bearish about return on investment for high-net-worth customers (K-Private Banking) next year amid rising risks as the global economy enters the final stage of the boom cycle.
The global return on investment of several products in 2019 could further contract from this year and hit the bank's wealthy clients, said private banking group head Jirawat Supornpaibul.
KBank's high-net-worth clients are those with minimum assets under management (AUM) of 50 million baht.
Mr Jirawat said return on investment next year will decline at a smaller pace than this year's drop, due to asset allocation.
Return on investment for K-Private Banking customers is about -5% on average so far this year, in line with contractions in the returns of all financial products, including sovereign bonds (-2.4%), corporate bond (-3.8%), gold (-5%), developed equity markets (-7.6%), oil (-15.3%) and emerging equity markets (-16.1%).
"However, return on investment of our customers remains positive in a range of 5-6% for 10-year investment," Mr Jirawat said.
Meanwhile, KBank projects flat growth in 2019 for its high-net-worth customers' AUM, which stands at 750 billion baht currently.
The bank expects to deliver a marginal increase in AUM of 0.2% this year, mainly due to sluggish markets around the world.
Mr Jirawat said the global economy has entered the final stage of expansion before turning to contraction, so the bank recommends clients allocate funds to low-risk assets and hold a higher ratio of liquid assets.
Risk-averse investors, in particular, are advised to hold cash as 50-70% of their investment portfolio.
KBank in 2018 managed to increase the number of high-net-worth customers by 8% to 11,165.
According to a breakdown of the bank's asset allocation, the portion of investment was a tad lower at 68%, down from 69% last year and steady from the previous year but up from 63% in 2015.
Sophisticated assets surged by 13% to 83.1 billion baht this year from 73.4 billion in the preceding year.
KBANK shares closed on Thursday on the Stock Exchange of Thailand at 188 baht, down 50 satang, in trade worth 1.46 billion baht.
