These will result in innovations in labor productivity, massive investment in infrastructure as megacities blossom, new economic segments flowing from green energy, and regional hyperconnectivity.

Overall, regional demographics are favorable, with a population dynamic currently marked by young populations and a low dependency ratio of young working people supporting the aged. The UN Department of Economic and Social Affairs forecast in a 2022 paper that APAC will grow from 4.2 billion citizens to 4.6 billion by 2040 and the region will account for over 60% of global output, according to a 2024 World Bank report.

Multinational research firm BMI views the region’s young and large population as a force for growth: “in particular, Indonesia, which will see its population grow by 12 million people,” says Cedric Chehab, BMI’s chief economist. “Another structural driver will be significant investment in infrastructure related to power generation, trade, and manufacturing.”

He adds that the increasing population will improve productivity and increase urbanization rates. “Bank funding will continue to play an important role, but this will be compounded by external financing via bilateral or multilateral efforts.”

At the same time, a new financial system is emerging based on digital assets that range from those issued by regional central banks to digital currencies. The move to tokenized holdings in Hong Kong and Singapore has already upended standard bond issuance and real-world assets and has gained traction in South Korea.

Soaring consumption driven by a growing middle class will reduce the region’s reliance on exports for growth, a necessary dynamic as the global free trade model comes into question. Regional debt is below the global average (with the notable exceptions of China and Japan), and local capital markets are rapidly developing in depth and sophistication, propelled by distributed ledger technology (DLT).

This is exemplified by Vietnam, where real GDP growth averaged 6% in the decade to 2024, according to the Vietnamese General Statistics Office. However, its low fertility rate of 1.9 children per woman is lower than Southeast Asia’s average of two, although ahead of Singapore’s and Thailand’s rates of one and Malaysia’s of 1.6, respectively. This presents an impending baby bust, according to data from the General Statistics Office.

“Vietnam’s economy continues to benefit from strong manufacturing and export activities, growing foreign direct investment, and government support, particularly in improving infrastructure. We expect domestic growth to continue and wealth to rise,” says Jens Lottner, CEO of Techcombank in Hanoi. “This rising affluence, increasing digitalization, and the large potential for more product penetration across mortgages, bonds, stocks, and insurance mean Vietnam’s banking industry still has huge growth potential.”

By contrast, the populations of China, Japan, South Korea, and Singapore are forecast to shed a combined 64 million people over the next 15 years due to age-related mortality and declining fertility, but they are developing new economic models based on health care, consumption, education, and leisure to cope with higher dependency ratios.

Tony Yang, president of CTBC Bank in Taipei, notes there are three major downside risks to the region’s growth over the next 15 years: an excessive reliance on a single market, leading to dramatic fluctuations in economic growth; rising geopolitical risks, most likely dragging down investment activities and leading to a loss of orders; and increased protectionism that is not conducive to escaping the middle-income trap.

Hong Kong, Singapore, and Japan are emerging as regional digital asset hubs, boosted by a fast-developing regulatory framework. Some 70% of Asian institutional investors own digital assets (compared to the low 40% range in the US and low 50% range in Europe) according to a 2024 report from SBI Digital Asset Holdings. The ballooning family office industry in the region is firing up demand for digital assets, particularly in the nascent fixed-income and real-world asset (RWA) tokenization arena.

In February 2023, the government of the Hong Kong special administrative region issued the first sovereign tokenized green bond via an HK$800 million (about $103 million), one-year offering. The SAR followed on a year later with a HK$6 billion multicurrency bond denominated in Hong Kong dollars, renminbi, dollars, and euros under the Government Green Bond Programme (since renamed the Government Sustainable Bond Programme). The deal was the largest digital bond yet issued and attracted a final book of more than 50 global investors.

Incorporating DLT into the international primary debt market is at a nascent stage, according to Tim Fang, head of Debt Capital Markets for Greater China at Credit Agricole CIB in Hong Kong.

The MAS selected InvestaX to tokenize Singapore’s new onshore investment vehicle, alongside UBS, State Street, PwC, and the Tezos Foundation.

“The past 18 months have seen a major shift, with the rise of institutional-grade issuers focusing on treasuries and other publicly traded assets. This has brought legitimacy, scale, and a clear product-market fit, driving rapid adoption,” he adds.

Last November, OCBC became the city-state’s first financial institution to offer tokenized bonds via its own paper, to a midsize manufacturer looking to diversify its treasury holdings.

“A corporate or accredited investor client [with assets of S$10 million—around $7.5 million] can subscribe to tokens in denominations of S$1,000 and can similarly liquidate investments in those denominations to meet cash-flow requirements, with OCBC acting as market maker in its bonds,” says Kenneth Lai, head of Global Markets at OCBC in Singapore. “Exit prices are determined based on market prices of the underlying bonds that the tokenized bonds reference, and it is possible to sell and settle the transactions on the same day.”

As a credit proposition, the tokens can be treated like the underlying paper they reference. In the event of a debt restructuring, they will receive the same treatment.

“We expect a surge in demand for tokenized securities that cater to the needs of institutional investors and HNWIs [high net worth individuals],” says Evy Theunis, head of Digital Assets in the Institutional Banking Group at DBS Bank in Singapore. “Institutional investors want the ability to quickly rebalance between cryptocurrencies and yield-generating assets in response to rapidly changing market conditions, without having to keep on- and off-ramping.”

She adds that DBS “could see the issuance of more tokenized private assets, like privately held shares, as HNWIs seek exposure to an asset class that is typically accessible only to institutional investors.”

Indeed, this trend was underlined in early March when Singapore-based DigiFT, a digital exchange for tokenized assets, secured a license to offer custody services for investment products. The company recently listed a tokenized version of a $6.3 billion private credit fund managed by US asset manager Invesco.

“For investors, the key factor remains the quality of the underlying asset. The token itself is merely a vehicle for value transfer—if the asset has no or low value, investor demand won’t follow. Publicly traded RWAs reflect NAV [net asset value] transparently, but private market tokenization still lacks this level of visibility,” says InvestaX’s Kwan.

Notably, Trump failed to mention China in his announcements about imminent tariff increases shortly after his January 20 inauguration, instead naming Canada and Mexico as subject to tariffs of up to 25% by February 1.

Meanwhile, China’s Vice Premier Ding Xuexiang said at the World Economic Forum in Davos, Switzerland: “We don’t seek [a] trade surplus. We want to import more competitive, quality products and services to promote balanced trade.”

Trump, for his part, reportedly told aides shortly before his inauguration that he wants to visit Beijing early in his term, suggesting the possibility of a deal between equals rather than unilateral action in the case of China.

China’s trade surplus has risen substantially since the Covid-19 pandemic, driven by a significant depreciation of the country’s real effective exchange rate, supporting export growth and depressing import demand.

“Macroeconomic factors are driving these external developments,” IMF economists wrote in a September note. “These include negative domestic demand shocks in China, due to the property market downturn and low household confidence, as well as a dissaving shock in the United States due to elevated government and personal spending.”

China’s December export growth confounded market expectations, surging 10.7% year-on-year via $335.6 billion of exports for a booming 5.9% full-year growth rate, according to data from Dutch bank ING. Exports to the US surged 15.6% in December to a 30-month high, driven in part by front-loading ahead of possible tariffs, while those to ASEAN countries powered up 18.9%.

With growth remaining strong in the US and ASEAN, demand for Chinese exports—which last year were dominated by ships (57.3%), semiconductors (17.4%), autos (15%), and household appliances (14.1%)—seems likely to persist.    

If growth of assets under management (AUM) is the appropriate measure, private banking and wealth management in the Asia-Pacific region are in the best of health. Averaging content from various data providers indicates that AUM in the region grew by $400 billion in 2023 after two years of contraction.

Consultancy firm Accenture recently reported that Asian wealth management firms aim to double their AUM to $260 trillion by 2026. At the current pace, this is achievable.

However, the regional industry struggles with how its firms differentiate themselves. Most offer well-designed client interfaces, AI-powered portfolio management, and big data analysis. They also offer product access to liquid public markets, from global fixed income and equity to mutual and exchange-traded funds.

Innovative digital superiority and universal bank heft will determine which bank wins the individuation race. The winners can also access superior research, private deals, and a gold-plated front-office talent bench.

DBS Private Bank’s relationship management team has a stellar reputation, backed by its “One Bank” business model whereby the front office can draw on the universal bank’s myriad of capabilities, not least its research capacity and the bank’s “phygital” approach of combining digital transactions with face-to-face interaction.

The data points are superlative: AUM grew at a compounded 10% annual rate from 2017 to 2023; the private bank has a scant 43% cost-to-income ratio versus the industry’s average of 60% to 80%; and total wealth management income rose by 35% last year, boosted by a 24 billion Singapore dollar (about $18 billion) inflow of net new money.

DBS has made extraordinary strides as a financial institution over the past decade. If the Asian growth dynamic plays out to deliver the Association of Southeast Asian Nations as the world’s fourth-largest economic grouping by 2030—after the US, Europe, and Northern Asia—as is widely forecast, then the bank’s seemingly relentless march will not abate.

A subsidiary of Singapore-based OCBC, Bank of Singapore (BoS) can leverage the group’s approach to sustainability and environmental, social, and governance (ESG) concerns to its advantage.

OCBC has invested SG$30 million since 2021 to launch a suite of sustainability training modules. That year, BoS was the first private bank in Asia to add ESG factors into assessments of loan amounts and focus on MSCI-rated funds with an ESG AA scores and above.

In 2022, BoS co-chaired an Association of Banks in Singapore task force to produce the city-state’s first sustainable investment guidelines. Last year, it was the first private bank in Singapore to sign the Singapore Stewardship Principles for Responsible Investors.

BoS is implementing a suite of ESG assessment tools that will add a sustainability dimension to clients’ investment portfolios through ESG ratings and scores. This will enable the bank’s front office to assess ESG performance data based on MSCI’s ESG ratings.

The bank describes itself as a “digitally led and knowledge-driven financial services firm.” ICICI Securities offers multiple delivery channels, including its app and website, and the ICICI Direct digital investment platform, digi-assist, equity relationship manager, wealth manager, and partner independent financial associates.

ICICI created a “data lake” and analyzes data through multiple analytical tools. Use of execution algorithms allows order slicing and averaging within a digital open-architecture integrated platform. Tools include a watchlist and charts-led trading ecosystem, tableau dashboards, and heat map insights.

Last year, the bank moved an independent part of its trading platform to the cloud to gain the bandwidth and scalability necessary for business expansion, utilizing the capability of Amazon Web Services, and ensuring that the data remains in India per regulatory requirements.

“We aimed to move much faster—scale and adapt at speed to develop new digital services … to execute thousands of trades in seconds,” says Subhash Kelkar, former chief technology and digital officer at ICICI Securities in Mumbai.

For 10 consecutive years, Global Finance has recognized the leaders and visionaries in the private banking industry through our World’s Best Private Banks awards.

While private banking’s core mission of managing the world’s fortunes with a focus on the long-term, intergenerational aspect of wealth planning has remained unchanged throughout this journey, the same cannot be said about the industry’s offerings, which have grown immensely more sophisticated and individualized.

Catering to the needs of the affluent today presents an entirely different challenge than 10 years ago. Supporting this transformation is a change in the core demographics of private banking customers, who are now younger and more diversified in gender, geography, and other factors than ever.

This year’s winners are those who have excelled at attending to these increasingly complex demands and stayed at the forefront of the private banking industry.

Perhaps more than ever, success in private banking hinges on a combination of courage, vision, and expertise. This is particularly true given the faster investment returns and higher geopolitical tensions experienced by the affluent in 2024.

For the fifth consecutive year, the global banking giant J.P. Morgan US Private Bank has excelled at adapting to shifting macroeconomic conditions, delivering best-in-breed results to its clients.

Riding the phenomenal rebound in global investing brought by improving monetary conditions and subsiding inflationary pressures, the bank saw client assets rise by 24% over the previous year, amounting to more than $2.5 trillion under supervision.

Against this backdrop, revenues posted a notable 18.5% increase from the year prior, with pretax income showing an even more significant boost of 36% year-on-year (YoY).

On the product side, the bank made significant strides in integrating advanced artificial intelligence (AI) tools such as JPMorgan Chase’s Connect Coach and the Chase Connect mobile app into its award-winning product offerings. These include first-class risk analytics and portfolio management services that serve as a benchmark for many in the industry.

Yet, despite these fantastic advances in its products, the bank also looked for human talent, adding over 300 expert advisers to the team. As a result, the bank attracted more than 5,400 new clients. —Thomas Monteiro

Few would doubt the claims of HSBC Global Private Banking (HSBC GPB) that it possesses an “extensive network, rich experience, and solid reputation in the market,” as underpinning its ability to provide access to private equity for private bank clients.

HSBC GBP can offer private equity opportunities to customers in the primary and secondary markets, and coinvestments via its annual Vision Private Equity discretionary program, launched in 2019. The program provides investors with opportunities through a single vintage discretionary portfolio diversified by geography, sector, and strategy. For ultrahigh net worth (UHNW) clients, the bank offers access to special exclusive investment opportunities tailored to clients’ investment knowledge and risk appetite.

The latest Vision Private Equity program closed in June with $403.2 million in client commitments. Since its inception, the program has raised aggregated capital commitments of over $1.9 billion from international investors; and a seventh Vision Private Equity fund launched in November.        —Jonathan Rogers

Bank of New Zealand (BNZ) wins our award as the Best Private Bank for Women Clients not only because of its numerous strides in gender equality but also, more broadly, because of its unwavering, long-term focus on empowering women. This commitment starts with the bank’s staffing, with a 100% female leadership team and a 60% female workforce.

On the customer-offerings side, BNZ offers an unparalleled range of services tailored to women’s unique financial journeys. These include custom investment solutions and tailored financial advice from the bank’s expert financial advisers.

WealthNet, the bank’s investment portal and award-winning digital platform, ensures seamless access to clients’ portfolios and enhances financial literacy and engagement.

Moreover, initiatives like the Ivy Waters Memorial Scholarships, Quietly Powerful program, and enhanced parental leave signify the bank’s dedication to supporting women at every stage of their careers and personal lives.

BNZ’s focus on responsible investing ensures that women clients are investing in a sustainable future. This aligns with the bank’s growing preference for investments with financial returns and positive social and environmental impacts.         —TM

Africa faces a major challenge in preserving generational wealth. Glaring gaps in education and financial literacy are key contributors.

South Africa, which boasts a vibrant financial services sector, illuminates the magnitude of the problem. In 2022, financial literacy in the country stood at 51%. A staggering 70% of generational wealth is depleted by the second generation and 90% by the third. Worse still, 25% of those who inherit wealth are inadequately prepared for financial responsibility. The worries are amplified with 60% of Africa’s population being under 25.

Standard Bank has set out to change this sad state of affairs. Driven by a strong belief in the power of financial literacy for sustainable generational wealth transfer, the bank is investing heavily in financial education. For instance, the NextGen Thought Leadership equips many with basic financial literacy and leadership skills. Through education, the bank plays a critical role in bridging intergenerational wealth disparities and promoting upward mobility.   —John Njiraini

Our Best Private Bank Digital Solutions for Clients this year, BNP Paribas, is no stranger to innovation. In fact, despite the phenomenal advances in technology in 2024, this award reflects a much longer journey, leveraged by years of consistent investments in the area, through both good and challenging times.

Amid the numerous innovations released by the French banking giant, significant improvements to its already best-rated digital app have helped the bank scale its strategy of catering to the next generation of wealth.

Among these, the bank launched “MyGuide,” a digital platform designed to enhance onboarding by offering interactive digital presentations that effectively introduce potential clients to the bank’s services and capabilities. This tool is part of the bank’s broader strategy to improve user experience and streamline the client engagement process through advanced digital solutions.

The bank integrated its app with major social platforms, offering convenient and comprehensive account management.

As a result, BNP Paribas effectively doubled its share of entrepreneurial clients under the age of 40 this year and aims to grow further in this segment.        —TM

For the second year in a row, Banque Richelieu Monaco has won the Best Boutique Private Bank in the World award for leveraging its unique mixture of personalization and growth to offer its growing customer base the best tailor-made opportunities.

In a world where banking services are increasingly consumerized, the Monaco-based bank effectively continued betting on balancing a human-scale structure with competitive agility. The bank excels at catering to the needs of its high net worth (HNW) and UHNW client base.

The results speak for themselves. Amid a thriving environment for global investments, the bank increased its operating income by nearly 50% between December 2022 and June 2024 and doubled its loan book during the same period.    —TM

Over the past two years, Hana Bank has focused on delivering solutions to increasing private bank client demand through a comprehensive portfolio, digital wealth management, and specialized family office services. Early in 2024, the bank introduced the Hana Real Estate All-Care Solution. This integrated advisory service uses AI-based proprietary technology to deliver end-to-end real estate development, operation, and sales consulting.

This followed the launch of AI Wealth in March last year. This AI-powered wealth management platform utilizes extensive data analysis to make asset allocation decisions and predict market trends. By the end of 2023, the platform had attracted $279 million in new investment funds.

This year, the bank built on this enhanced, digital-enabled, portfolio-management capability by offering split-purchase exchange-traded funds (ETFs). These ETFs enable clients to buy ETFs on a split basis during price dip market-entry points. —JR

Santander Private’s long-term commitment to social responsibility gained significant momentum this year. The Spanish bank rode the global rebound in ESG investing to continue leading toward a more equal, sustainable future in its several markets.

On the social front, Santander launched several initiatives that provide education and resources to underserved communities by fostering financial literacy and inclusion, particularly in Latin American markets.

The bank also significantly expanded its range of ESG-related investment products, introducing new funds that comply with international sustainability norms and regulations. Over 80% of its global fund offerings now focus on socially responsible investments.

Finally, Santander also began reporting environmental and social metrics for clients in the US and Switzerland, enhancing transparency and insight into sustainable investments.            —TM

With over $24.4 billion in philanthropic assets and $52 billion in assets managed for nonprofit organizations, Bank of America has continued to shine as the undisputed global leader in philanthropy this year.

The secret behind the behemoth’s success is its award-winning philanthropic strategy team, each member boasting over 25 years of experience in the area to provide highly specialized advisory services without additional fees.

This has allowed the bank to continue educating and guiding wealthy donors in strategic giving—unique, specialized advisory services provided without additional fees. Over the last few years, the bank’s growth trajectory in this area has yielded more than 1,000 new relationships with foundations and endowments, increasing its offerings to clients seeking specialized services.

Among the several strides made this year, the winner in this category for the fourth time in a row made a multimillion-dollar investment in its digital grant-technology platform, which enhanced grantmaking operations for foundation clients.    —TM

Our Best Private Bank for Business Owners, PNC Private, scaled its operations after a challenging year for US regional banks by taking advantage of a more-resilient-than-expected US economy and an improving business environment.

The bank’s Hawthorn Business Owner Solutions team shone brightly, delivering tailored guidance for growing, protecting, or transitioning businesses and supporting owners through education and financial insights.

Moreover, PNC’s collaboration with strategic players such as Solebury Capital and Harris Williams help provide customers with specialized advisory services, such as merger and acquisition advice, capital market financing, and employee stock ownership plan financing evaluations—all areas seen as crucial this year amid the thriving environment.

PNC Private also promoted several family business forums throughout the year, bringing together business stakeholders for meaningful educational engagements and networking.        —TM

Despite boasting over 30 years of excellence in the field, our Best Private Bank for Sustainable Investing, J. Safra Sarasin, has set itself apart from the competition by blending experience with a forward-thinking approach.

While the bank continued to offer top-level sustainable-investment opportunities aligned with the United Nations Sustainable Development Goals, its proprietary Sustainability Matrix has been the real game-changer. This matrix empowers its customers to make better decisions that align with their sustainable-investment strategy, avoiding reliance solely on third-party sustainability data.

Designed by a dedicated team of sustainability analysts, the tool is continuously refined to evaluate financially material ESG factors across all sectors, ensuring the best decision-making.

The bank has introduced two innovative investment strategies centered on strategic minerals essential for achieving net zero emissions, broadening the amount and depth of its sustainability-aligned offering.    —TM

As HNW and UHNW customers’ needs grow ever more sophisticated, Bank of America’s innovative infrastructure of services, combined with decades of excellence in wealth management, keeps proving to be a game-changer for its customers in the family office segment.

The giant bank increased its client balances globally by 24% YoY despite growing geopolitical challenges, one of the industry’s top concerns.

The bank’s proprietary CashPro For Family Office is among the best services of its kind. It enables efficient data aggregation, accounting, and treasury management, streamlining an otherwise complex, time-consuming process.

Additionally, the bank’s Family Offices division has focused on promoting several exclusive events and forums within the industry, thus connecting like-minded families in the search for solutions to the industry’s problems and unique networking opportunities.      —TM

DBS is acknowledged as a pioneer in AI and machine learning. It has built this technology into the bank’s “phygital” business model, which combines digital insights with face-to-face engagement between the front office team and clients.

The bank uses behavioral impulses—nudges are a vital component—to send targeted messages to clients and their relationship managers. Using data-driven intelligent prompts, the bank has dramatically enhanced client relationships. Last year, some 7.2 million “next-best nudges” were sent to 22,600 clients, improving performance by 6% to 62% of nudges. They resulted in a client conversation within 30 days of the nudge being sent and a 50% engagement or click rate.

Within the digital-assets sphere, DBS quickly recognized the transformative potential of tokenization in unlocking liquidity and facilitating access to typically illiquid assets via fractionalization. DBS is the first and only bank in Singapore to provide a tokenization service, digital custody service, and digital exchange as a single integrated solution for clients. —JR

Fifth Third Private Bank caters specifically to entrepreneurs through personalized investment strategies, wealth management, and trust services. It has ridden the better-than-expected momentum in the US economy.

The regional US bank recorded a revenue increase to $608.7 million, up from $516.6 million the previous year. Its Business Transition Advisory team played a pivotal role, and its gross proceeds reached a phenomenal $1 billion.

The strategy behind the success has focused on region-specific knowledge, leveraging its profound understanding of local market dynamics and regulations to provide the best solutions to entrepreneurs.

Through enhanced digital tools, clients can access sophisticated, personalized wealth management strategies on a user-friendly platform. These tools facilitate tailored solutions that address complex financial needs while offering flexibility for evolving client goals.        —TM

Santander Wealth Management & Insurance is one of the five global businesses around which the Santander Group is organized. Private banking serves more than 260,000 clients in 11 countries, with a strong presence in Latin America. It combines deep local knowledge with a global platform, providing global banking services.

In line with the growing international demand for Santander Private Banking services, particularly in Latin America, new clients can be onboarded more quickly and easily through an efficient, secure digital channel. This is essential as individuals in Latin America become wealthier and their needs become more global. They tend to increase their investments in strong currencies, such as the dollar and euro, and continue to seek new opportunities.

Santander Private Bank has added 90 new bankers to its Latin America-focused Miami office and in Mexico. The bank expects to reach €500 billion (about $525 billion) in assets under management (AUM) by 2025 and sees Latin America accounting for the bulk of that growth.        —Estela Silva

As part of a new, long-term expansion strategy, PNC Private Bank focused on attracting millennials and the affluent in the emerging market, increasing and diversifying its already best-in-class customer base.

The bank launched new digital finance tools designed to appeal to tech-savvy clients. These tools ensure seamless and intuitive access to financial services that fit contemporary digital habits.

Its flagship Hawthorn Institute for Family Success also received significant attention, helping affluent clients align family values with wealth strategies, specifically addressing the unique needs of younger, wealth-inheriting clients seeking to sustain family legacies.

PNC also emphasized business succession planning and investment strategies tailored to startup founders through new specialized offerings that cater directly to the segment’s needs.  —TM

For BTG Pactual, the next generation of investors is the ambassador of values and mission for the future, and a special program prepares them to carry the torch forward.

Future Leaders is a program going beyond traditional wealth management, delving into the intricacies of intergenerational wealth. It dissects the process, ensuring participants can manage wealth and navigate these intricacies confidently.

From understanding the intricacies of estate planning to staying current with cutting-edge trends and innovations in family leadership, BTG leaves no stone unturned. This comprehensive knowledge forms the bedrock of sound decision-making.

In short, the Future Leaders program is a testament to BTG Pactual’s unwavering dedication to empowering the custodians of wealth and legacy. With a legacy of excellence and a vision that spans generations, the bank strives to create a future path for the leaders of tomorrow. This program’s impact is evident in its transformative influence on the lives of program participants and in shaping the future of intergenerational wealth management.            —ES

With an integrated and innovative approach, Bradesco Global Private Bank positions itself as a financial dynamo and a strategic partner for its clients. It offers a segmented and highly personalized approach to clients with net worth under $1 million, structured to maximize each client’s satisfaction and financial success. The bank also has a strong consumer and retail banking presence and divisions that cater to HNW individuals. Investment advice, tax planning, and estate planning are among the services offered to these clients.

Bradesco’s team of specialists consists of 120 bankers responsible for direct client relationships, 20 daily bankers focused on new generations, 120 relationship officers dedicated to account and service management, and 40 advisers specialized in investments. Last year, the bank achieved 500 billion Brazilian reais (approximately $86 billion) in AUM, a 150% growth since 2017, representing a market share of 22% and a one-percentage-point increase.      —JR

CTBC’s Private Privilege (PP) segment, which has $5 million or more in investable assets, grew by 28% last year, with AUM powering up 23% for a 74% revenue surge. PP clients saw their portfolios gain, on average, between 5% and 10% in 2023 thanks to stringent investment advice anchored in low-to-medium-term duration high-grade bonds. Once the entry point had been finessed and high yields locked in, the segment’s portfolios benefited from the US Federal Reserve’s rate-tightening policy.

At the same time, clients could take advantage of CTBC’s growing product suite and attendant portfolio-management sophistication, and structured notes were deployed to capture returns in overseas equity markets.

New products offered to PP clients in 2023 included local bonds and ETFs, alternative investments curated by Pictet TR-Atlas Titan and Schroders, and building on the existing comprehensive offerings, including publicly offered funds, overseas bonds, and dual currency investment.           —JR

Serving an astonishing 30% of the world’s billionaires, Citi Private Bank remained the undisputed leader among UHNW customers again this year, earning an honorable mention in our award.

Despite the sector’s historical penetration, the bank kept pushing for even more growth and, as of the second quarter of 2024, boasted around 14,000 UHNW clients.

To stay ahead of the competition, the New York–headquartered giant launched several tailored investment solutions this year, including advanced asset allocation and risk management strategies that address the specific needs of HNW individuals. The bank has also ramped up investments focused on appealing to a new generation of wealthy clients, such as the Next Gen program, which provides networking opportunities, educational resources, and events to prepare new generations for leadership and wealth management.         

Global Finance: What is the Philippines economic growth outlook for 2024-25?

The outlook for domestic output growth over the medium term is largely intact. With 6.3% growth in the 2^nd quarter, it would likely settle within the government’s target in 2024 as a whole. We expect growth to be supported by robust construction spending and the timely implementation of various government programs.

GF: The Philippines Central Bank (BSP) was the first major central bank in Asia to cut rates following the widespread regional post Covid-19 monetary tightening. Is the bank comfortable acting ahead of the Fed?

Eli Remolona: The BSP takes a data-driven approach to policymaking. The cut in rates in August was driven by our projections of inflation and growth based on the latest data on domestic conditions. The timing of the FOMC’s actions did not play much of a role in our decision.

In fact, about two months before our latest policy rate cut, our forward guidance already indicated that we expected to shift to a less hawkish monetary stance. I also mentioned during an economic forum in early July that the BSP did not need to wait for the US Fed to cut rates before we do.   

The rate cut [in August] came amid a favorable inflation outlook. A key factor to this is the recent Executive Order lowering the tariff on rice imports. Rice is the staple in Filipino households, and so changes in rice prices have considerable impact on overall inflation. In addition, core inflation has continued to ease, with a September reading of 1.9%.

Our latest estimates show that even if some risks to inflation materialize, inflation will settle at 3.3 % this year, 2.9% next year, and 3.3% in 2026. These are all within the target range of 2-4%.

With inflation now on a target-consistent path, we have room for a calibrated shift to a less restrictive monetary policy stance.  

The reaction of financial markets to the BSP easing its policy rate earlier than the US Fed has been relatively muted, with the Philippine peso weakening only slightly versus the US dollar right after the recent policy decision and has since continued to appreciate.

GF: How has BSP’s prior policy-rate tightening impacted the Philippine’s key economic variables, and what direction are domestic interest rates headed?

Remolona: Previous policy rate increases had some dampening effect on demand, including credit activity. Nevertheless, the impact of tight financial conditions was something the domestic economy could absorb — as indicated by sustained GDP growth and improving employment conditions.   

On the domestic interest rate path, the current macroeconomic outlook, including target-consistent inflation, supports a calibrated shift to a less restrictive monetary policy stance. However, the BSP will continue to monitor lingering upside risks to prices, including those coming from higher electricity rates and external factors.

GF: What is the outlook for credit growth and credit quality in the Philippines over the next year?

Remolona: The country’s banking sector has been a reliable source of strength for the economy. Bank lending has consistently grown to support economic activities without compromising credit quality. We attribute this in part to prudent lending standards of banks.

Total loan portfolio of the country’s banking sector amounted to P14.2 trillion ($254 billion) as of end-July 2024, up by nearly 11% from a year ago. Of this loan portfolio, non-performing loans account for 3.58%, which is very manageable.

We expect the trend of robust loan growth and good credit quality to continue in the months ahead.

GF: How significant are ESG considerations and the net zero commitment to the BSP’s modus operandum over the medium term?

Remolona: The Philippines had committed to peak carbon emissions by 2030. At the same time, we recognize that climate change poses challenges to our mandates of promoting price and financial stability. This highlights the urgent need for central banks and supervisors to refine monetary and prudential tools to take account of ESG factors.

Firstly, monetary policy decisions will need to take increasing account of the physical risks of weather events. These threaten to present supply shocks that are more significant than the recent shocks in oil and food prices. In the case of the Philippines, these shocks led to an inflation rate of 8.7% in January 2023, the highest in 14 years. It is evident that we can no longer look through these shocks since they change inflation expectations and lead to significant second-round effects. 

Climate change also presents a major challenge to our mandate of promoting financial stability. We think climate risk is the ultimate systemic risk. While we have issued regulations that embed ESG considerations into bank’s risk management frameworks, we must enhance our surveillance tools further. 

We are collaborating with relevant government agencies and other stakeholders to leverage available data, models and expertise in order to strengthen our understanding of climate risk and its impact on the financial system. Our efforts to deepen the domestic capital market and provide alternative funding sources aim to channel funds toward eligible green or sustainable projects.  In addition, the BSP is pursuing an inclusive sustainability agenda. Our initiatives to increase capital flows and green finance to promote just transition and resilience building are also designed to benefit the most climate vulnerable segments, such as the agriculture sector, and small and medium enterprises. 

Moreover, the BSP is committed to incorporating sustainability in its own operations. As a signatory to the UN-supported Principles for Responsible Investments, we are dedicated to integrating ESG considerations into our investment practices.

Global Finance: What is Mongolia’s economic growth outlook for 2024-2025?

Byadran Lkhagvasuren: The Mongolian economy grew by 5.6% in the first half of 2024, mainly driven by high growth in the mining and transportation sectors as well as in the service sector, despite the sharp decline in the agriculture sector. The growth outlook for 2024 and 2025 remains favorable, supported by strong external demand and a significant rise in the Oyu Tolgoi mine’s copper concentrate production. Significant growth in coal exports and the transportation sector have been the main factors driving economic growth, which is expected to be sustained at around 6% this year and 8% next year. Certainly, any unpredictable changes in external conditions and policies of leading economies continue to be a main source of uncertainty.

GF: Mongolia’s foreign exchange reserves increased last year and external debt was reduced. What have been the benefits of this positive backdrop, and is it likely to continue?

Lkhagvasuren: As of July 2024, Mongolia’s foreign exchange reserves reached $4.7 million, reflecting a 23.8% increase from the last year. Several factors have strengthened Mongolia’s external position. In particular, the current account balance was in surplus, largely due to a strong recovery in coal exports in 2023. The government also implemented effective debt management strategies by refinancing parts of the sovereign bond, with no major external bond maturities until 2026. The Bank of Mongolia started repaying the PBoC [People’s Bank of China] swap line in late 2023 to reduce interest costs and improve the central bank’s balance sheet. Despite repaying 6 billion Chinese yuan [$843 million] of the swap usage, foreign exchange reserves remained robust. Based on our current projections, gross reserves are expected to increase in the short to medium term. Maintaining an adequate level of foreign exchange reserves is crucial for ensuring economic stability, fulfilling the country’s international financial obligations, reassuring foreign investors, and strengthening the national currency.

GF: How has the BOM’s rate policy impacted Mongolia’s key economic variables, and where are interest rates headed?

Lkhagvasuren: The tight monetary policy has effectively eased the demand-driven inflationary pressures and prevented inflation from the second-round effects. The supply-side price increases have also decelerated due to the reduced transportation costs for imported goods, while the favorable external conditions—with strong export performance—eased the exchange rate pass-through on inflation. As a result, inflation has declined to the midpoint of the target range in 2024 and is expected to remain within the target range for the medium term. Inflation may slightly rise next year, considering several factors causing inflationary pressures. Aside from the uncertainties surrounding the external environment, the expected increase in fiscal spending will fuel demand-driven pressures on inflation. The ongoing discussions about raising electricity and heating prices may have set the stage for cost-related price hikes. The future direction of the policy stance will depend on these risk factors for price increases, depending on developments in domestic and external markets. [In mid-September, the central bank cut rates 100 basis points to 10%.]

GF: What will be required over the next five years if Mongolia’s Vision 2050 is to be achieved?

Lkhagvasuren: As outlined in Vision 2050, achieving macroeconomic stability and transforming the middle class into the predominant group requires maintaining the inflation rate at its target level and pursuing a managed, flexible exchange rate to absorb and mitigate any external shocks. Moreover, given the Mongolian economy’s vulnerability to external shocks, diversifying the economic structure and setting priorities for investment projects—without compromising external and internal balances—is crucial for sustainable economic development.

With the growing impact of climate change, the Mongolian financial sector has been emphasizing the promotion of green finance initiatives. Mongolia has made ambitious commitments, as part of the Paris Agreement, to lower its carbon emissions by 22.7% against the business-as-usual scenario by 2030. In light of the achievement of sustainable goals, Mongolia became the second country in the world to develop and enforce a green taxonomy in the financial sector. The green taxonomy was approved by the Financial Stability Committee in 2019. Since then, banks have been reporting to the central bank on their green financing according to the taxonomy. The Financial Stability Committee approved the National Sustainable Finance Roadmap in 2022. This important document heightened the commitment of not only the BOM but of all relevant stakeholders in furthering the green finance cause. The goal of the Roadmap is to increase green lending to 10% in the banking sector and 5% in the non-bank financial sector by 2030.

Reserve Bank of Australia veteran Michele Bullock took the helm as the bank’s first female governor in September last year during intense soul-searching at the institution, which had come under critical scrutiny during the tenure of her predecessor, Philip Lowe. As such, Bullock has been hyped as a change agent at the RBA, although the only notable change under her watch has been the transfer of decisions on the crucial cash rate to an interest-rate-setting board, while another board takes care of the RBA’s day-to-day operations.

Since February, monetary policy decisions have been made at two-day meetings held eight times a year rather than the previous one-day, once-a-month regime. The cash rate remains at a 12-year high of 4.35% in the face of stubborn inflation, which hit 3.8% in the second quarter, outside the RBA’s 2%–3% target.

Central bank Governor Taleh Kazimov, in office since 2022, had a boost in July when Fitch Ratings upgraded Azerbaijan’s long-term foreign currency issuer default rating to BBB- from BB+ with a stable outlook. Fitch cited a robust external balance sheet, noting that the country’s sovereign currency assets—80% of which are held by the country’s sovereign wealth fund, SOFAZ, with the remainder at the central bank—will hit $74 billion this year. This equates to 98% of projected GDP and is well above the 55% recorded when the agency first rated Azerbaijan as investment grade in 2010.

Government debt is low, at around 23% of GDP, and headline inflation was a scant 0.7% in June. This allows for an increasingly relaxed monetary regime, with the refinancing rate held steady at that month’s central bank meeting following five consecutive rate cuts. Fitch estimates 2024 inflation at 2.5%, comfortably inside the central bank’s 4%, plus or minus 2%.

Bangladesh is in turmoil following Prime Minister Sheikh Hasina’s July flight from the country, which resulted from widespread student-led civil unrest. After 15 years at the helm of an often brutal regime, Hasina provided the last act of a dynasty in power on and off since independence in 1971. Nobel peace laureate Mohammad Yunus was appointed interim prime minister, and in August, he selected Ahsan H. Mansur to be central bank governor.

The political turmoil fuelled a spike in inflation, which hit 11.66% in July amid fast-dwindling foreign exchange reserves. Mansur announced plans to hike the benchmark rate by 50 basis points to 9%, and stated that rates would hit 10% within the coming months. Negotiations were opened, with the IMF agreeing to supplement a $4.7 billion bailout program hammered out in January 2023 by an additional $3 billion.

Bangladesh has suffered years of financial system dysfunctionality. Still, the full extent of the malfeasance of Hasina’s Awami League regime is set to emerge, as Mansur described the “designed robbery of the financial system” in a BBC interview given shortly after his appointment.

Deposits have fled, and non-performing loans have soared.

“They took the money and put it in Singapore, Dubai, London and elsewhere. So, the first effort would be to try to take people to task and get the money back,” said Mansur, who is establishing a banking commission to undertake a comprehensive audit of domestic banks, replace management and inject capital. He estimates that the country’s Islamic banks must be recapitalized to $15billion to $30 billion.

Neophyte Governor Chea Serey, who assumed office in July 2023, has enjoyed a “Goldilocks” opening act to her tenure, following in the footsteps of her well-respected and market-savvy father.

Executing monetary policy is a tricky balancing act in a country that uses the US dollars and a local currency. The Cambodian riel has been gifted a fortuitous tailwind in the form of buoyant international reserves that have surged 12.3% in 2023 to $20 billion, covering seven months of goods and services imports.

Riel stabilization has been achieved by prudent circulation management and foreign exchange market intervention, usually involving selling US dollars versus the domestic unit on the open market.

According to World Bank data, inflation fell to zero in March as food prices decelerated. The current account recorded an unprecedented surplus last year as the trade deficit contracted and tourism surged. Despite a slowdown in domestic credit growth, GDP expanded by 5.6% in 2023 and is forecast to hit 5.8% in 2024, according to the World Bank.

China’s GDP growth hit 5% in the first half of this year, a solid result considering the country’s ongoing real estate crisis, weak domestic demand and burdensome local government debt. However, the second quarter’s base effects account for some of this strength. But that growth rate comes in the context of deflation—China’s GDP deflator is zero and threatening to turn negative. Producer prices have been declining for two straight years, and consumer prices rose by an average of just 0.2% in the first half of the year.

The People’s Bank of China (PBoC) has indicated a sharp focus on the domestic bond markets as a monetary policy tool. In July, the bank launched temporary repo or reverse repos to optimize open market operations and ensure the banking system’s liquidity.

This indicates a radical shift in the PBoC’s monetary policy thinking under Pan Gongsheng, who took over as governor in July last year. In September, the PBoC cut its benchmark seven-day interest rate by 20 basis points to 1.5% and dropped commercial banks’ reserve requirements by 50 bps.

Pan has emphasized monetary policy stability amid widespread calls for radical easing, forecasting that inflation will increase to 1% by year end. The PBoC’s second-quarter monetary policy implementation report, said that prudent monetary policy should be “flexible, moderate, precise and effective.”

The Hong Kong Monetary Authority (HKMA) sets policy in lockstep with the United States to maintain the Hong Kong dollar’s peg to the US unit at a tight 7.75-7.85 per greenback. Reflecting Federal Reserve policy dynamics, it therefore mirrored the Fed’s 50 basis point cut on September 18, for a 5.25% benchmark rate. Governor Eddie Yue once again displayed his quiet competence, with the HKMA noting in a comment following that rate decision that Hong Kong’s financial and monetary markets continued to operate in a smooth and orderly manner, with the Hong Kong dollar exchange rate remaining stable.

GDP growth hit 7.8% in the first quarter, moderated to 6.7% in the second and is on track to hit the Reserve Bank of India’s (RBI) full-year 7.2% growth target.

Governor Shaktikanta Das voiced confidence when he spoke at a conference in August in Odisha, India: “I would like to say with all humility and sincerity and with all confidence that the Indian growth story is intact,” he said, noting the plus-7% growth registered across India’s main economic sectors in the first quarter, including investments (+7.5%), services (+7.7%), manufacturing (+7%) and construction (+10.5%). Crimped government spending and a weak performance from the agricultural sector (+2%) capped a stellar growth performance.

Retail inflation eased to 3.54% in July from 5.08% in June, versus a market consensus of 3.65%. It was the softest rise in consumer process since August 2019, and marked the first time inflation remained within the RBI’s target 4% range in five years, albeit assisted by base effects.

Das presides over an ever-strengthening domestic financial system, with robust capital adequacy, low levels of non-performing assets and solid profitability at the banks and non-bank financial companies (NBFCs). This system is anchored in an improving governance ecosystem focused on risk management and internal controls under the umbrella of ESG-focused structures.

“As risks evolve and new challenges emerge, the reserve bank as a regulator and supervisor constantly focuses on being vigilant, adaptive and proactive about the regulatory frameworks and supervisory systems to safeguard the stability of the financial system,” said Das in a speech to the College of Supervisors in Mumbai in June.

Bank Indonesia Governor Perry Warjiyo has placed the risk of capital outflows at the center of his radar amid calls for a reduction in policy rates as inflation moderated to just 2.13% in July, the slowest reading in two years. He might also have a sharp eye on the rupiah, which has fallen 6.6% against the US dollar this year, even against relatively high domestic interest rates—the benchmark rate sits at 6% after a 25 basis point cut on September 18.

“We held at 6.25% while waiting for better global conditions, when there’ll be room to cut,” said Warijo at a quarterly press briefing in Jakarta in August, referring to the decision to stay rates in July.

Kazuo Ueda is not scared of springing surprises on the market, as he did in July when he pushed for a hike in the policy rate to a target of “around 0.25%” from 0%-0.1%, contrary to the market consensus. In doing so, he continued to unwind 17 years of ultraeasy money in Japan—a process he kicked off at the start of his tenure in 2022. This unexpected hike came during a profound and prolonged period of yen weakness, and tightening did the trick for the yen, which surged against the dollar and Asian currencies.

The impact of the yen’s weakness on Japanese inflation might yet prove fortuitous, as wages continue to rise and the elusive prize of rising household consumption draws nearer. Core CPI hit 2.7% in July—a five-month high—as import-dependent Japan felt the full impact of all-time low yen weakness.

“Initial wage settlements … are at their highest level in three decades … and the probability of achieving a stable 2% inflation rate has increased enough to justify the outlined policy normalization,” said Ueda in a speech delivered to the Peterson Institute for International Economics in May.

National Bank of Kazakhstan (NBK) Governor Timur Suleimenov has presided over healthy domestic-demand-led GDP growth since assuming office in September last year, boosted by infrastructure project spending, oil sector investment, educational facility construction and housing modernization. Bank lending to small businesses increased by 24%, and the overall loan mix as of December was 53.3% for the consumer sector and 46.7% for the business sector. Growth came in at 5.1% for 2023 against a moderating inflationary backdrop; CPI declined to 9.5% in January versus 20.7% the previous year, still ahead of NBK’s 5% target. This has allowed for a reduction in the base rate since August 2023 in four increments totaling 225 basis points, bringing the rate to 14.25% in August. 

The National Bank of the Kyrgyz Republic (NBKR) held policy rates steady at 9% following its July meeting, in the face of moderating inflationary pressure and economic recovery. Real GDP increased 8.8% in the first quarter and inflation was subdued at 5.2%—inside the NBKR’s 5% to 7% target.

The Asian Development Bank forecasts GDP growth at 5% for this year, driven by reduced growth in construction and services. The country’s often-turbulent political backdrop has given way to relative stability since 2021, and the country has benefited from ADB financing in the form of public sector loans, grants and technical assistance initiatives totaling $2.6 billion. A notable ADB financing last year was a $40 million project to promote climate-resilient agricultural value chains.

The governor of the National Bank of Laos Republic, Bounleua Sinxayvolavong, was removed from office at the start of July in the face of a burgeoning economic and financial crisis exacerbated by the collapse of the Lao kip, which lost more than 30% of its value against the US dollar last year, propelling inflation that rising fuel prices had already stoked. Basic food security and nutrition are in jeopardy in the landlocked country, according to the Asian Development Bank.

Bounleua was replaced by acting Governor Vathana Dalaloy, who previously served as the central bank’s deputy governor.

The country is locked in a debt spiral—its external public debt-servicing costs surged to $950 million last year from $507 million in 2022, with the national debt totaling around 125% of GDP, and 44% of government expenditures going toward debt service.

Talk of a failed state is widespread amid stagnant wages and collapsing education and health services. The kip is shunned within the business community in favor of dollars or Thai baht, and the black market is the effective arena for business transactions; exports were valued at $8.2 billion in 2022, but only $2.7 billion entered the country. The received wisdom is that China, to whom much of Laos’ external debt is owed, will not allow the country to go bust. For now, chaos reigns.

Bank Negara Malaysia Governor Abdul Rasheed Ghaffour, in office since July last year, has kicked off his tenure in great style. In the second quarter, GDP surged to its highest level in 18 months to 5.9%, via a fortuitous mix of buoyant household spending and stronger exports and investment.

That represents an about-face from the start of this year, when the ringgit came under extreme pressure, collapsing to a 26-year low versus the US dollar in February and recovering subsequently by over 3%. The inflation dynamic is reasonably benign, with headline and core inflation averaging 1.8% in the first half, although BNM projects an average 2%-3.5% rate for the rest of the year, as fuel-subsidy cuts add to inflationary pressure. Benchmark rates are expected to remain unchanged at 3%.

Governor Byadran Lkhagvasuren is presiding over an enviable external position and growth dynamic as he approaches five years at the helm of the Bank of Mongolia (BOM). The current account balance is in surplus thanks to surging 2023 coal exports. The BOM has meanwhile executed deft debt management thanks to past liability exercises, with no debt maturities to repay until 2026. External sovereign debt and swap lines to the PBoC have been paid down (to the tune of 6 billion Chinese renminbi), and foreign exchange reserves have surged 23% to $4.7 billion.

Non-performing loans in the banking system fell to 5.3%, the lowest level since 2015, and of the 33.3% growth in credit last year, the bulk was in the retail segment, with loans to the mining sector moderating. At 5.5% in the first half, inflation was inside BOM’s 6% target level, plus or minus 2%, and likely to remain restrained. At the same time, the growth trajectory is positive. The economy grew 5.6% in the first half thanks to strong mining and transportation sectors and is forecast to hit 6% in 2024 and 8% in 2025.

Citing these accomplishments, global rating agency Fitch upgraded Mongolia’s long-term foreign currency rating to B+ with a stable outlook in mid-September.

The country faces various economic challenges, including ongoing conflict that disrupts land-border trade with China and Thailand and domestic supply chains. In the six months to March, merchandise exports and imports collapsed by 13% and 20%, respectively, according to the World Bank. A staggering 3.1 million individuals were internally displaced, according to a June report from the World Bank, and a third of the population is estimated to be in poverty.

Widespread electricity outages have forced businesses to rely on expensive diesel-generated power. Around 33% of Burmese businesses reported that power outages were their primary challenge in April, compared to 12% as recently as September.

Such a backdrop is inherently inflationary, and the ongoing kyat depreciation, which has dropped around 20% versus the US dollar this year, exacerbates the price pressure.

The World Bank estimates that GDP rose just 1% in the year to March, or around 10% below pre-pandemic levels. Labor market participation is low, with unemployment estimated at 8.1% as of the end of last year. Inflation is expected to moderate to 18% this year from 26.5% in 2023 but will continue to be pressured, not least due to ongoing central bank financing of the fiscal deficit.

Nepal Rastra Bank tightened monetary policy last year to diffuse inflationary and foreign exchange reserve pressure. It raised the policy rate and curbed lending to banks, which had ballooned by more than 500% during the Covid-19 pandemic. As a result, credit growth fell to 4.6% from 13.3% in 2022.

Moderating inflation allowed for a 100 basis points cut in the policy rate in December, and the inflation dynamic continued to improve, averaging 6.4% in the first half of this year on the back of subdued oil and commodity prices. Growth fell to just 1.9% last year from 5.6% the prior year, and is forecast by the ADB to hit 3.6% this year.

The Reserve Bank of New Zealand’s Adrian Orr presides over the third recession in less than two years. His campaign to overcome ingrained inflation—and hit the RBNZ’s 1%-3% target—has taken its toll on the country’s low-productivity economy.

Indeed, such is Orr’s hypervigilance on silencing inflation that he stated at an RBNZ press conference in May that the bank had considered raising rates at that month’s policy-setting meeting. In the event, the official cash rate was held steady at 5.5%.

“The disappointing part is how stubborn domestic inflation remains. We don’t determine productivity; we just deal with the product we’ve got,” said Orr in an interview in May. He noted that inflation for many parts of the economy had fallen, “but we are now at the stubborn tail, which is not surprising.” GDP growth was just 0.3% in the first quarter. The chorus from the New Zealand financial media is that Orr’s draconian inflation campaign is inflicting substantial damage on New Zealand’s economic fabric.

The hope is that Pakistan is turning the corner after over three years of economic turmoil. The signs are encouraging. From an all-time 22% high in benchmark rates, the State Bank of Pakistan has trimmed by 250 basis in two moves since June. That comes on the back of moderating inflation, which was 11.1% in July and hit the single-digit level—9.6%—in August for the first time in three years, having ballooned to 30% last year. In July, Pakistan reached a staff-level agreement with the IMF for a $7 billion bailout, and a new state budget containing ambitious tax collection levels was passed.

Eli Remolona, appointed governor of the Bangko Sentral Ng Pilipinas (BSP) in June 2023 by President Ferdinand Marcos Jr., hit the ground running in the first year of his governorship of the Philippines Central Bank. Former Federal Reserve economist Remolona inherited a 17-year policy-rate high of 6.5%. With the five-month headline CPI rate averaging 3.5% in the first half of 2024, inside the BSP’s 2%-4% target, the stage was set for a rate cut.

This well-telegraphed cut was the first from a major Asian central bank since the post-COVID tightening cycle kicked off. The August cut arrived as a 25 bps easing in the overnight borrowing rate. The bank expects to adopt a further 50 bps cut in October to match the Fed’s September rate cut.

GDP growth hit 5.7% in the first quarter and is forecast by the IMF to hit 6% in 2024, supported by recovering domestic demand and exports.

Incoming Monetary Authority of Singapore (MAS) Managing Director Chia Der Jiun faced the initial challenge of sticky inflation after assuming office in January—core CPI was 2.9%. He elected to retain a tight monetary stance as expressed in Singapore’s exchange-rate-based monetary policy band known as the Nominal Effective Exchange Rate, or S$NEER.

That was a savvy call; core prices increased by 2.4% in July, the lowest rise since 2022. That month, speaking at the release of the MAS’s annual report, Chia said that core inflation in the city-state is expected to ease significantly in the final quarter and that GDP growth of 2%- 3% is achievable as major sectors of the economy return to pre-pandemic growth rates, an outcome that would significantly improve on 2023’s anemic 1.1% GDP print.

At the annual report release, Chia announced the monetary authority’s commitment of 100 million Singapore dollars (about $76.6 million) to support the domestic financial industry in building quantum and AI technology capability, and he also highlighted the booming Singapore asset and wealth management industry. He inherits a tight ship: the MAS made a 2.8 billion Singapore dollar profit in the 2023-24 financial year. 

The Bank of Korea (BoK) has presided over interest rate extremes since the Covid-19 pandemic. It cut benchmark rates to a record 0.5% low in May 2020 and pushed them up to 3.5% in January, where they have remained. BoK Governor Rhee Chang-yong cited financial stability risk considerations as a determining factor for monetary easing; ensuring financial system stability is one of BoK’s core mandates.

“In terms of price stability alone, the mood is right to discuss interest rate cuts,” Rhee said at a press conference in July following BoK’s decision to leave rates unchanged for the 12th consecutive time, but “market expectations [for rate cuts] do look excessive in some ways.”

This caution is partially explained by the fact that South Korea has the highest household debt-to-GDP ratio, and the Bank of Korea is concerned about a potential surge in mortgage loans on the back of easier money. A weak won, which is off around 7% versus the US dollar this year, has enhanced inflationary stickiness—even though CPI moderated to 2.4% in June, just outside BoK’s 2% target.

The country is on track to reverse over two years of economic and financial system turmoil. Gross Official Reserves hit $5.4 billion in May, a $1 billion gain since the end of 2023—a singular rebound given the collapse of reserves to a record low in 2022—and the rupee appreciated against the US dollar and local Asian currencies.

GDP growth is forecast to hit 3% in 2024 following a 2.3% contraction last year, boosted by a 50 basis point cut in the benchmark standing deposit facility rate and the standing lending facility rate in March, to 8.5% and 9.5%, respectively, afforded by a sharp contraction in inflation, which rose a scant 2.4% in July. The only cloud hanging over a commendable performance by central bank Governor Nandalal Weerasinghe is the ongoing government offshore debt restructuring negotiations, in which new terms are being sought by holders of $12 billion of Sri Lanka’s foreign debt.

The Central Bank of the Republic of China (Taiwan) shocked markets in March with a policy rate increase from 1.875% to 2% following its quarterly meeting. Governor Yang Chin-long said the discount rate tightening was a “little surprising.” Still, he placed it in the context of an uncertain global inflationary outlook, with inputs including the strength of the Chinese economy, supply chain issues, geopolitical risks and climate change.

The central bank’s monetary tightening campaign has been explicit. Since March 2022, there have been six discount-rate hikes totaling 87.5 basis points, accompanied by three reserve ratio requirement (RRR) increases totaling 75 bps, with the last 25 bps RRR hike made in June. 

Taiwan’s inflationary backdrop has been clouded by a weak Taiwan dollar. The unit was down by more than 6% over the review period. It hit an eight-year low in July as local equities slumped, led by chipmaker Taiwan Semiconductor Manufacturing amid concerted foreign portfolio selling. Inflation surged to 3.08% in February, up from 2.8% the prior month. But the monetary tightening has begun to bite, and core CPI increased by a scant 1.99% in the year to July.

GDP growth declined to 1.31% last year due to soft global demand and weak domestic capital investment, even though post-Covid consumption picked up. Growth surged by 5.83% in the first half of this year, according to the Directorate General of Budget, Accounting and Statistics. The central bank forecasts full-year growth at 3.77%, up from an initial 3.22% projection.

The one-day repurchase rate remains at its highest level in more than a decade—2.5%. And action from the Bank of Thailand (BOT) is unlikely as the bank waits for signs of fiscal stimulus from the incoming administration led by Prime Minister Paetongtarn Shinawatra, who assumed office in August. Private domestic demand has weakened this year, prompting calls for a rate cut and increasing the likelihood of a strong fiscal stimulus package, including a 500-billion baht (around $14.6 billion) “digital wallet” handout to 50 million households.

Growth was robust at 6.2% in the first quarter. That builds on the 6% chalked up last year, propelled by expansionary fiscal policy, frothy private consumption and surging fixed investment. The inflationary dynamic is auspicious, with CPI falling to 8.1% in April from 12.3% at the end of 2022. The IMF projects real GDP growth at 5.4% this year, supported by strong domestic demand.

The State Bank of Vietnam (SBV) has monitored household growth closely over the past year. It has overseen 6% credit growth in the banking system, encouraged concessional lending in the residential property market, and pressed credit institutions to reduce operating costs so that lenders can offer lower loan rates to retail customers.

This has encouraged a healthy, diverse growth dynamic. GDP growth was a heady 6.9% in the second quarter of this year, marking the strongest reading since Q3 2022. First-quarter growth was revised up to 5.87%.

Headline CPI averaged 4.08% in the first six months of the year—the highest reading since January 2023, but inside SBV’s 4%-4.5% target—with price pressures emerging from the education and healthcare sectors. Core CPI chalked up a 2.75% increase. Still, the trajectory appears favorable: Headline CPI fell back to 3.45% in August.