Richer residents, along with Singapore's robust reputation and the likelihood of currency appreciation drawing in more overseas inflows, will be a boon for the city's wealth management sector, according to a report by Barclays.
Barclays is forecasting wealth management fees will at a three-year compound annual growth rate of 9.2%, 8.6% and 7.4% for local banks OCBC, UOB and DBS respectively.
In terms of the retail structured product tranche market, UOB saw its sales increase by just under 50% between 2009 and 2011, having raised $642m, while OCBC's sales shrank by 65% to $132m during the same period, according to the SRP database. DBS saw a 6.5% increase in sales volume to reach $623m last year. UOB has continued its lead this year so far having $317m worth of products striking, compared to $118m for DBS. No OCBC products have struck this year.
Meanwhile, foreign currency system deposits registered in the city-state continued trending upwards for the third year in a row, rising nearly 10% to $390bn last year.
Barclays Asia ex-Japan banks analyst Sharnie Wong believes Singapore's reputation as a strong financial centre will continue to be inviting to foreign fund flows, while an expected appreciation of the Singaporean dollar will also encourage conversions into the local currency.
Wong expects the Singapore dollar to gain 6.6% against the US dollar.
There are currently 132 live products which include bullish SGD versus USD bets in underlyings or baskets, worth an estimated $1.41bn, according to an SRP tally.
According to the Boston Consulting Group, Singapore is also home to the highest concentration of millionaire households with 15.5% of all families, or 170,000 households, with more than $1m in assets under management in 2010, up 38% from the year before.