Kasikornbank (KBank) is encouraging its high net worth depositors to shift towards portfolio investments in pursuit of better returns as interest rates begin a downward cycle.
Defined as an individual with assets under management (AUM) of at least 50 million baht, also known as K-Private Bank members, the bank recommends these clients diversify away from low-risk assets and consider portfolio investments.
According to Adisorn Sermchaiwong, co-division head for the wealth management and bancassurance division and head of KBank's private banking group, this strategy presents an opportunity for clients to achieve better returns on their investment, particularly as global policy rates are trending downward.
K-Private Bank manages around 900 billion baht in AUM, with 40-50% allocated to deposits, bonds and significant holdings of vacant land. This proportion has increased from around 30% in the past, and there is potential to raise it further, providing clients with enhanced investment opportunities, particularly in response to the US Federal Reserve's interest rate cuts, he said.
Mr Adisorn said the decline in the federal funds rate may increase volatility in global money and capital markets. K-Private Bank is focused on guiding its clients through asset allocation and diversification strategies to ensure sustainable, long-term portfolio growth, he said.
"With interest rates on a downward trend, now is an opportune time for investment," said Mr Adisorn.
"We recommend a strategic asset allocation in bonds, the stock market and private equity, following a core-and-satellite investment approach."
K-Private Bank also provides non-financial advice to its clients, such as tax management. Some clients who own significant amounts of vacant land are opting to sell, transitioning their assets into portfolio investments as rising land taxes increase their holding costs.
Others are leveraging KBank's land loan services to improve their investment returns.
K-Private Bank serves around 12,000 clients, collectively owning around 20,000 vacant plots nationwide. The bank's outstanding land loan portfolio totals nearly 13 billion baht, with additional deals in the pipeline totalling 5-6 billion baht.
With a combination of investment opportunities and innovative services, KBank aims to increase the AUM of its high net worth clients to 950 billion baht by mid-2025, according to Mr Adisorn.