Asia wealth players grow as crisis crimps rivals

The bold moves signal a shift in the balance of power away from Western banks, who are suffering from massive credit losses and accusations they sold toxic investments to rich clients.

Banks in Singapore, Australia, China and Japan are also boosting wealth offerings to benefit from an increasing trend among the rich to invest in their home markets and in simpler financial products.

The domestic banks are initially focusing on "high net worth" individuals with $1-$10 million in assets, with an eye on the super rich as they expand in the fast growing markets of China, India and Indonesia.

"There is a good window of opportunity for these guys to take market share," said Bhalaji Raghavan, a senior adviser on banking in Asia at consultancy Capgemini.

"If they continue to do well and execute well, I am sure they will gain momentum and become reasonably good banks."

The industry shake-up comes at a time when the rich, burned by bad investments, want better advice, transparency on what they are investing in and real-time data on their trading positions.

A PricewaterhouseCoopers survey showed that for 53 percent of the rich their primary source of financial advice was their own research and knowledge, reflecting a "significant" lack of trust in private bankers.

Assets of "high net worth individuals" in Asia dropped 22 percent to $7.4 trillion in 2008, according to Merrill Lynch/Capgemini's World Wealth Report 2009.

Foreign banks, who have traditionally relied on offshore centers Singapore and Hong Kong to tap rich clients, are also under pressure to move their businesses onshore as a global fight against tax cheats forces countries around the world to ease strict banking secrecy laws.

The weakness in the offshore model was thrust into the limelight after Switzerland agreed to reveal names of 4,450 wealthy American clients of UBS in a tax dispute settlement that pierces traditional Swiss banking secrecy.