How HLB is keeping pace with clients’ growing wealth

Wealth management is becoming a more important growth business for Asian banks as rising household wealth, entrepreneurship and intergenerational transfers create opportunities beyond traditional lending and deposits. For universal banks, however, capturing that growth involves more than establishing a private bank or expanding an investment product shelf.

Retail customers accumulate deposits and investments; entrepreneurs build companies and personal wealth simultaneously; domestic clients increasingly hold assets offshore; and first generation business owners eventually have to decide how ownership and wealth will pass to their families. The challenge for banks is to deepen their relationships as customers’ wealth and requirements develop.

Jeffrey Yap, Managing Director and Regional Head of Wealth Management at Hong Leong Bank (HLB), put this in longer terms: he argued that a customer’s investable wealth should roughly double every seven years through investment returns and increasing cash flow. If the amount HLB manages does not grow with it, another institution is capturing more of the incremental wealth.

HLB has identified wealth management as a key growth engine, with the scaling of the business contributing to a 9.3% increase in group non-interest income in the financial year ended June 2026. HLB reported non-interest income of MYR 1.61 billion ($395 million), with the non-interest income ratio reaching 24%.

Yap described the capability build around four areas: people, products, processes and platforms. His ambition is to roughly double the wealth business every two years, which he translated into annual growth of about 30% to 40%. With the underlying market unlikely to expand at that rate, he acknowledged that HLB would also have to capture market share.

Finding wealth within the existing customer base

Yap identified four sources of client growth: customers entirely new to HLB; existing customers upgraded into wealth segments; referrals between commercial banking and wealth management; and cross-border referrals.

The second provides HLB with an acquisition pool already sitting within the bank. Some existing customers already have substantial assets with the bank without having a relationship manager or structured wealth relationship.

Yap described these customers as “new to wealth”: they are not new to the bank, but are new to an active wealth-management relationship. He gave the example of customers who historically held large deposits and primarily used their branch to renew fixed deposits. Yap said HLB introduces such customers to a relationship manager, undertakes a needs analysis and begins examining how their assets are positioned.

He said HLB introduced its own customer relationship management system in 2025, which it uses to assess client needs and personas and support subsequent wealth conversations.

Instead of relying entirely on persuading established private banking customers to switch institutions, HLB can therefore identify customers whose wealth management needs have developed beyond their existing banking relationship.

Yap said Malaysian customers tend to be relatively conservative, with many looking for returns above deposits without accepting substantially greater risk. HLB is using asset allocation to move the conversation from individual products towards portfolios based on a customer’s needs and risk tolerance.

Connecting entrepreneurs’ businesses and personal wealth

The relationship becomes more complex for entrepreneurs, who may simultaneously be commercial banking and private banking clients.

HLB has longstanding relationships with business owners and small and medium sized enterprises. Yap said the bank wants to extend its role from helping entrepreneurs create wealth through their businesses to helping them manage the wealth that results. “We have seen them grow. We know their needs,” he said.

A business owner may be served by a commercial banker for company financing and separately by a private banker for personal investments. A referral between the two does not necessarily preserve the information or understanding accumulated in the original relationship.

Yap said HLB established a High Net Worth Development Team in 2025 to bridge its business and wealth customers. The unit is intended to connect conversations between the two businesses rather than simply pass customers from one to the other.

Which banker leads the relationship depends on the client’s circumstances. A founder seeking financing to expand a company may interact more intensively with the commercial bank. Following a company sale or initial public offering, the private banker may become more important as the entrepreneur decides how to deploy newly liquid wealth.

HLB is consequently pursuing what Yap described as a “one bank” approach, with commercial and private bankers meeting clients together where appropriate.

HLB may therefore already have a relationship with an entrepreneur while the underlying business wealth is still being created. Connecting the commercial and private banking relationships gives it a way to remain involved when that wealth moves into personal investment, liquidity management and eventually succession.

Keeping the relationship when wealth moves offshore

HLB is applying similar logic geographically. Yap described Malaysia as HLB’s principal wealth growth engine to date, with Singapore becoming increasingly important. He also said HLB is looking at business and investment flows from North Asia into Southeast Asia.

For Malaysian customers, Singapore gives the bank a way to retain a relationship when part of their wealth moves offshore.

Yap said a customer may regard HLB as the bank of choice in Malaysia but historically place offshore liquidity with an international or Swiss private bank once the assets leave the country. HLB’s proposition is to continue managing more of that wealth through its Singapore operation where the customer has offshore needs.

The bank is developing referrals in both directions. Yap said customers in Singapore are being referred to Malaysia when they have requirements there, while Malaysian customers can be referred to Singapore when they have offshore needs.

The proposition is also relevant as business and investment flows move from North Asia into Southeast Asia. Yap pointed to HLB’s presence in Hong Kong and its strategic investment in Bank of Chengdu as parts of the bank’s regional connectivity.

HLB is expanding its advisory workforce alongside this regional proposition. Yap said HLB has doubled headcount in Singapore and is seeking substantial increases in Priority and Private Bank relationship managers in Malaysia. He described the headcount figures in HLB’s business plan as yardsticks rather than ceilings, saying the bank would continue recruiting where it finds good advisers and sufficient client opportunity.

Adding capabilities without building everything internally

Retaining increasingly sophisticated customers requires capabilities beyond distribution. Yap said he does not believe HLB needs to build everything itself. Instead, he wants the bank to combine its own strengths with capabilities available elsewhere in the market when those better serve the customer.

That approach is central to HLB’s alliance with Swiss private bank Lombard Odier. As Yap described it, HLB brings customers, local market knowledge, distribution and lending capabilities, while Lombard Odier brings an established global investment organisation and investment expertise.

Yap said HLB could hire investment analysts itself, but that would not immediately give it the depth or track record of an established global investment organisation. The partnership provides another route to capabilities that would otherwise take time to develop internally.

It has also moved into HLB’s investment process. Yap said HLB and Lombard Odier operate a joint investment committee. Lombard Odier contributes its global ex-Asia perspective and HLB contributes the Asian view, which are combined to establish HLB’s house investment view.

Lombard Odier has also helped HLB develop its strategic asset allocation approach. Based on customer risk profiles, the framework provides recommended allocations across asset classes including equities, bonds, gold and alternatives, while allowing advisers and customers to adjust portfolios for individual requirements.

Yap said HLB historically had considerable strength in treasury and structured products in Malaysia but has increased its focus on investment funds. He estimated assets under management (AUM) in its funds business had grown by about 50% to 60%, reflecting new money as well as investment performance.

Yap said demand for alternative investments has been strong, with some fixed tranche private equity and private debt offerings facing more client demand than available supply. He emphasised that alternatives should be considered as part of portfolio construction rather than simply as products promising higher returns.

Portfolio financing provides another capability. Yap said lending balances across Malaysia and Singapore had increased by about 30% to 40% year-on-year, with stronger take-up in Singapore.

In Malaysia, he said relatively high financing costs and more limited investment choices make leveraged investment less attractive than in some other private banking markets. Clients are instead using portfolio financing partly to unlock liquidity against investments they want to retain while pursuing other opportunities.

The same applies to advice itself. Yap acknowledged that willingness to pay directly for advice varies by customer. Some higher-end clients are willing to pay for advice; others may receive advice but generate revenue for the bank through subsequent transactions.

The objective, he said, is not to maximise revenue by recommending only what HLB already has. “If I don’t have it, then I’m going to partner with someone that has it,” he said.

For Yap, that is part of becoming a trusted adviser: the recommendation should be driven by the customer’s requirements rather than the limitations of the bank’s existing product shelf.

Following wealth from accumulation to succession

The proposition extends beyond investment management because much of the wealth accumulated by Asian entrepreneurs remains tied to operating companies, property and other illiquid assets.

Yap distinguished business cash flow from transferable family wealth. Profits may continually be reinvested in a company, while ownership of the company itself may be difficult to divide among the next generation. That changes the conversation as founders age. The question becomes not only how to generate additional returns but what should ultimately be transferred: the operating company, financial assets generated by it, property or some combination of them.

It also depends on whether the next generation wants to operate the business. Yap said families therefore need to determine whether the next generation should inherit the company itself, other assets or whether an eventual exit from the business is more appropriate.

Yap said HLB is spending more time on succession planning, wealth structuring, family governance and legacy planning. He argued that these issues should not be confined to the wealthiest families. Customers holding several properties, investment accounts or assets across jurisdictions can also face questions about ownership, division and eventual transfer.

The objective is not necessarily to liquidate illiquid wealth. It is to establish structures around what the family owns, what it wants to preserve, what should remain in an operating business and what eventually passes to family members or other purposes.

For HLB, this extends the entrepreneur relationship across another stage: from financing the business while wealth is being created, to managing more of the founder’s personal assets and eventually addressing how business and family wealth should pass across generations.

Scaling advice without removing the adviser

Capturing more of these relationships creates a capacity problem. HLB cannot penetrate a large existing customer base and simultaneously deepen complex private banking relationships simply by adding advisers at the same rate.

Yap sees technology and artificial intelligence as ways of increasing the productivity of relationship managers rather than replacing them.

He gave portfolio-review preparation as one AI use case, saying an adviser previously needed about two to three hours to analyse performance and asset allocation and prepare recommendations and presentation materials, compared with about 15 to 50 minutes using AI.

Yap identified know-your-customer processes, source-of-wealth analysis, onboarding and risk profiling as other areas where AI can streamline work. HLB is also looking at digitising manual processes around investment transactions, including replacing combinations of physical documentation and confirmation calls with in-app authentication where appropriate.

But Yap draws a distinction between automating the work surrounding advice and replacing the adviser. “With technology, with platforms, with AI and all that, you can help smoothen the discussion. You can help to provide better insights, but the advice still comes from a human,” he said.

That makes talent development complementary to technology. Yap said HLB launched its Wealth Academy in late 2025 to establish structured training across different wealth roles and customer segments. New hires without previous wealth management experience undergo an initial programme covering financial concepts and products before entering relationship roles, while more experienced employees receive training covering areas including alternative investments and legacy planning.

Yap said about three quarters of his management team are new, with people brought in from different organisations. HLB is simultaneously expanding its relationship manager base while attempting to increase what each adviser can do.

Measuring whether relationships deepen

Yap said his ambition is for HLB to become Malaysia’s largest wealth manager. He identified AUM, revenue and client numbers as conventional measures of scale, together with wealth management’s contribution to the broader group and the market’s perception of the franchise.

But his other measure goes more directly to the proposition underlying HLB’s strategy: whether the bank’s relationship with individual customers deepens as their wealth grows.

HLB therefore looks at the depth and size of customer relationships over time, not only the number of clients it acquires. Yap said HLB is seeing progress on this measure, while acknowledging that more work remains and that the bank is spending considerable time on the underlying data.

The different parts of the strategy address the points at which that relationship can otherwise fragment: when a depositor becomes an investor, when an entrepreneur converts business wealth into personal wealth, when assets move offshore, when investment requirements become more sophisticated and when wealth eventually passes to another generation.

HLB already has many of the underlying customer relationships. Keeping pace with their growing wealth depends on how much of those relationships it can retain and deepen as their needs change.