Yet another player has emerged on Singapore's lucrative wealth management scene. German-based Landesbank Baden-Württemberg (LBBW), which has had a commercial banking presence in Singapore over the last decade, is starting up a private banking business in the city state.

“Singapore will not just be our hub for private banking, but also for our expansion of all our corporate banking activities in Asia,” says LBBW's head of private banking Asia Pacific Hans-Joerg Schneider. One of LBBW's key target markets is the Greater China region.

Comprising a team of six in the front office, with the back office and settlement functions outsourced using the branch platform and services of the group, the newly-formed private banking unit will be part of a long-term strategic plan to increase the international presence of the Stuttgart-headquartered LBBW.

Schneider tells us: "We have of course a business plan for the next three to five years with targets for assets under management, return on assets, number of people, but we are also still in the development phase and will see and adjust as we are progressing."

LBBW's expansion plans come on the heels of a recent announcement by Liechtenstein-based VP Bank Group that it has received the go-ahead from the Monetary Authority of Singapore to start a private banking operation.

Tan Soo Jin, vice chairman of executive search company Amrop Hever Group, explains why some banks are keen on starting a private banking business in these slower times. "European banks usually have a European client base, serving a mixture of clients who are already in Asia as well as European clients who may wish to place their funds outside of Europe. So, banks like LBBW see a niche market and a niche role they can play and serve. But they will have to be realistic and take a longer-term view, and not expect the private banking teams they hire to yield large assets under management."