DBS
Just as Singapore’s biggest bank starts to ramp up its acquisitorial push into private banking across Asia, its operation in Jakarta is tapping into an unexpected bonanza in Indonesia.
That would be the near 1 million wealthy Indonesians who this year availed of the state’s invitation to reveal what was largely already known, that they were sitting on billions of undeclared assets. Indonesia’s tax amnesty unearthed $365 billion of previously undeclared assets, as evasive Indonesians took the opportunity to get on the books without any legal impact. Singapore authorities said some $5 billion was repatriated from the city-state’s banking system.
That has wounded Singapore’s private bank sector, whose so-called ‘briefcase bankers’ got used to shuttling into Jakarta unlicenced to service Indonesian clients, much to the chagrin of people like Indonesia’s finance minister Sri Mulyani, who was pushing the tax amnesty. But what was surprising was that about 75% of the declared amount was actually held under-the-radar in Indonesia, assets that the Widodo government would now like invested in-country.
Indonesia is intent on developing its wealth market, and DBS is stepping up. It expects its client base to leap six-fold from about 100,000 as it integrates its recent purchase of ANZ’s Indonesian wealth management book and pursues clients now legally above-the-radar.