South African banks control more than half of all African high-net worth individuals’ (HNWI) private funds which are tied up in asset management schemes.
This is according to the latest New World Wealth African wealth report, which highlights that 165,000 HNWIs in Africa hold approximately US$660 billion in wealth – US$120 billion of which is controlled by wealth management companies.
HNWIs are defined as individuals with a net worth greater than US$1 million (R10.6 million).
South Africa is considered the hub for African private banking, with local companies holding at least US$63.7 billion of these funds, according to available data.
Leading the charge is Investec, which holds approximately US$23.1 billion of African HNWIs’ assets under management (AuM), followed by Rand Merchant Bank (RMB), which holds US$12.7 billion.
Other South African firms listed include PSG Konsult, Nedbank, Sanlam and Standard Bank.
“African HNWIs (outside South Africa) tend to keep their funds in traditional holding centers such as the UK, Channel Islands and Switzerland. Popular banks for these individuals include Credit Suisse and UBS,” New World Wealth said.
Top banks in African wealth management
|#||Bank||Country||AuM (US$ billions)
|6||Standard Bank Private||SA||4.5|
|8||Old Mutual Wealth||SA||n/a|
AuM figures for Dec 2013, except Investec (March 2014). Using 2013 year end exchange rate of R10.50/US$
According to New World Wealth, many South African banks have their wealth divisions offshore, in tax havens including the Channel Islands.
“We estimate the African private banking market will grow by 8% per annum over the next 10 years,” the gorup noted.
“The most promising emerging African markets for private banking are Nigeria, Ghana and Kenya. Fast growing countries such as Angola and Zambia are next on the list.”