Hard Times Continue for Private Bankers: Limited Wealth Growth
In the mid-term wealth creation will only be moderate, the new Credit Suisse Research Institute report reveals. The overall growth in global wealth remained limited in 2016, continuing the trend that emerged in 2013.
Total global wealth in 2016 edged upwards by 1.4 percent or $3.5 trillion to a total of $256 trillion, a rise in line with the increase in the world’s adult population. Accordingly, average wealth per adult of $52,800 remains unchanged (Credit Suisse Global Wealth Report 2016).
While total global wealth increased by 3 percent if exchange rates are held constant, growth rate has been decelerating in recent years. The report highlights the impact of adverse currency movements, which caused wealth to fall in every region except Asia Pacific.
Drop in Wealth in Response to the Brexit
In addition, the downward movement in equity prices and market capitalization also led to the relatively small increase in household financial wealth.
Among individual countries, Japan achieved the highest growth in total wealth of $3.9 trillion to $24 trillion, followed by a $1.7 trillion rise in the U.S. to $85 trillion. The U.K. suffered a significant drop in wealth of $1.5 trillion in response to the Brexit vote which triggered a sharp decline in exchange rates and the stock market
The key findings on Singapore are:
- Singapore’s household wealth grew 2.9 percent in 2016 to reach $1.1 trillion. It is projected to increase by 3.5 percent per year in the next five years to reach $1.4 trillion in 2021.
- Despite slowing growth, Singapore’s wealth per adult remains among the highest in the world, increasing by 1.4 percent to $277,000 in 2016 and ranked seventh globally among major economies. This is forecast to rise 2.2 percrent per annum to reach $309,000 in 2021. This compares to annual growth rate of 6 percent from 2000 to 2016, caused by high savings, asset price increases, and a favorable rising exchange rate from 2005 to 2012.
- Financial assets make up 54 percent of gross household wealth in Singapore, a ratio similar to that of Switzerland and the U.K. The average debt of $54,800 per adult is moderate for a high-wealth country, representing 17 percent of total assets.
- Wealth distribution in Singapore is moderately unequal, with 18% of its adult population with wealth below $10,000, compared with 73 percent globally. Singaporeans have also progressed rapidly up the wealth pyramid, with now 50 percent of adults having wealth above $100,000, compared to 21 percent in 2000, while those with wealth below $100,000 have declined from 79 percent to 50 percent of adult population.
- Singapore has 150,000 millionaires in 2016, a growth of 2 percent, with a total of $541 billion in wealth. Ultra-high-net-worth individuals grew even faster at 14.2 percent to 885. The number of millionaires is forecast to grow 4.2 percent per annum to 185,000 in 2021.
