S’pore households richest in Asia: Allianz report

SINGAPORE — For the third year running, households in the Republic are the richest in Asia, edging out countries such as Japan and China, but they also have the highest debt per capita in the region, according to a report by financial services firm Allianz.

In the seventh edition of the Global Wealth Report released on Wednesday (Sept 21), the firm said Singapore’s gross financial assets per capita amounted to €114,155 (S$173,050) by the end of 2015, the highest among 10 Asian countries that it surveyed.

Japan came in second with €108,660 and Taiwan rounded up the top three with €99,257. China, the region’s largest economy, was seventh with gross financial assets per capita of €14,281.

Gross financial assets are made up of bank deposits, securities, insurance and pension funds. According to the report, bank deposits accounted for 37 per cent of the portfolio of private households in Singapore.

Allianz said the maturity of financial systems in the countries analysed played a part in their rankings. 

“The percentage of the population that has access to an account held with a financial institution is one indicator of how developed a financial system is. In those countries with high per capita financial assets — Japan, Singapore, South Korea, Taiwan and Israel — more than 90 per cent of the population over the age of 15 has a bank account and, as a result, access to financial services,” according to the report, which studied the asset and debt situation of households in more than 50 countries globally.

“Although significant progress has doubtlessly been made, there is still (in some cases considerable) catch-up work to do in terms of giving the population access to financial services in countries like Malaysia, China, Thailand, India and Indonesia.”

Singapore’s continued dominance came as total financial assets in the country grew 4.5 per cent from the previous year to around €0.6 trillion. However, Allianz said this was the weakest growth rate the country had registered since 2008, “dampened by the negative performance of the stock market”.

In fact, the 2015 growth rates of financial assets in almost all the countries studied paled in comparison to their respective 2014’s and 10-year average figures.

“The development of financial assets has reached a critical juncture. Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver for asset growth no longer exists. At the same time, interest rates continue their remorseless slide, even into negative territory. For savers, the outlook is not rosy,” said Mr Michael Heise, chief economist at Allianz.

Liabilities of households in Asia picked up as well and Singapore was found to have the highest debt per capita in the region with loans amounting to an average €34,900 per inhabitant. Japan’s households came in second with liabilities averaging €24,770, followed by South Korea in third place with average per capita debt of €22,210.

“Per capita net financial assets in Singapore converted into euro amounted to €79,260 … This is roughly eight times the net financial assets per capita in China, the Asian country with the highest growth rate, where they amounted to a mere €11,500,” said Mr Heise.