[SINGAPORE] Total assets under management (AUM) in Singapore rose 12.2 per cent to hit S$6.07 trillion as at Dec 31, 2024, surpassing the S$6 trillion mark for the first time.
In 2024, the financial services sector also grew by 6.8 per cent, more than double the 3.1 per cent growth a year earlier, according to the Monetary Authority of Singapore’s (MAS) annual report released on Tuesday (Jul 15).
On average, the sector grew 4.7 per cent each year between 2021 and 2024.
But Chia Der Jiun, managing director of MAS, does not expect the financial sector growth to continue at the “unusually strong” pace of the last few years.
“With the global uncertainty, we do expect global economic activity to come down, and financing activity will also come down,” he added.
Chia pointed to areas of uncertainty such as the extent of tariffs, the durability of trade agreements, and whether there will be a recurrence of escalating trade conflicts.
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“(If) the worst of the outcomes do not occur, and the global economy is able to adapt to a reasonable level of trade (tariffs), then maybe the worst will not happen to financing activity… But certainly you can’t expect the pace of the last few years to continue,” he added.
Growth in the financial sector was broad-based.
Total assets in the banking sector rose at a 6.8 per cent compound annual growth rate over 2021 to 2024, while total assets in the insurance industry increased 3.6 per cent to S$456.4 billion in 2024.
Trading activity was elevated during the year, amid shifts in global and domestic financial market sentiments, resulting in net fees and commissions among banks and fund managers.
The corporate debt market also saw strong growth, with total issuance increasing more than 30 per cent to exceed S$300 billion.
Meanwhile, AUM growth was driven by strong market performance and larger net inflows compared with those in 2023.
According to the Singapore Asset Management Survey 2024 also released on Tuesday, AUM in the traditional sector grew 16 per cent, and alternatives rose 14 per cent.
Alternatives include private equity and venture capital, hedge funds, real estate, and real estate investment trusts.
Net AUM inflow stood at S$290 billion, up 50 per cent over 2023, as fundraising activities recovered amid improving investment sentiment from the previous year.
Breaking down the sources of funds, 77 per cent of Singapore’s funds were from outside of the Republic, with 33 per cent from the Asia-Pacific region excluding Singapore.
In return, 88 per cent of the funds were invested outside of Singapore, with 40 per cent in the Asia-Pacific region excluding Singapore.
Chia said that the city-state will continue to be a trusted and attractive wealth management centre, underpinned by its high standards of regulation.
“Our financial ecosystem will be tough on suspicious and illegitimate monies, but welcoming and efficient to legitimate wealth,” he added.
“This will provide a strong and sustainable basis for the continued growth of the wealth management sector.”
Chia also noted that the financial sector created, on average, 4,400 net jobs a year between 2021 and 2024, with more than 90 per cent of these going to locals.
This puts MAS on track to meet the Industry Transformation Map 2025 target of creating 3,000 to 4,000 net jobs a year.
Central bank operations
For the financial year ended Mar 31, 2025, MAS recorded a net profit of S$19.7 billion, up from S$3.8 billion a year earlier, driven by strong investment gains of S$31.4 billion.
This was partially offset by a negative currency translation effect of S$3.4 billion, and the net cost from MAS’ money market operations to manage banking system liquidity and other expenses of S$8.3 billion.
Chia noted that global markets performed well during the financial year, with all asset classes across bonds and equities, developed and emerging markets posting healthy returns.
The negative currency translation effects were due mainly to the strengthening of the Singapore dollar against the US dollar.
The Republic’s monetary policies are centred on managing the single exchange rate of the Singapore dollar against a trade-weighted basket of currencies.
Thus, when the Singapore dollar strengthens against the foreign currencies that maintain MAS’ official foreign reserves, the central bank experiences a negative currency translation effect.
