Management at Nippon Wealth – the latest entrant to Hong Kong’s crowded wealth management market – have outlined how they plan to capitalise on their differentiated proposition to compete.
The firm, a wholly owned subsidiary of OJBC and backed by Japan’s Shinsei Bank and several Hong Kong investors, secured a restricted banking licence from the Hong Kong Monetary Authority (HKMA) on April 2.
It became the first locally incorporated bank (which is not a branch or subsidiary of an international bank) to be granted a licence by HKMA since 1964. Its CEO is Tsutomu Nakajima.
Nippon Wealth aims to commence business fully this summer, offering wealth management services and products including deposits, investment trusts, bonds, as well as insurance. It is in the process of applying for Type 1 (securities trading) and Type 4 (securities advisory) licences.
But the bank, which has HK$289 million ($37 million) in capital, says it will not compete head-on with existing distributors as its differentiating proposition is its focus on Japan-related investments.
Speaking to AsianInvestor, COO Kenichi Hasegawa said Nippon Wealth's strategy was to focus on its Japanese heritage, by providing not-so-easily accessible Japanese investments including real estate, in mutual fund or private equity structures.
It will also arrange cross-border property loans to local investors seeking to invest in Japan. The bank will act as intermediary to the Shinsei Bank subsidiary that will provide the loans.
When asked how it would compete in the crowded Hong Kong distribution market, Hasegawa said: “Our target is quite unique. We will focus on Japan-related investments for the local investors as well as serving those Japanese individuals who aren’t getting the service they want from local banks here.”
Nippon Wealth has 36 staff and is seeking to hire more in relationship manager, product development and accountancy roles. It has a three-man product team looking after fund selection.
Hasegawa said it was conducting due diligence on a list of funds that it wants to onboard once it acquires its distribution and advisory licences from the Hong Kong Securities and Futures Commission.
Other than Shinsei Bank, Nippon Wealth has 10 more shareholders from Japan and Hong Kong, including Convoy Financial Holdings and Fenix Group.