Credit Suisse: Global household wealth increases 4.9% to USD 241 trillion, marked by a resurgence of wealth in the Eurozone

  Credit Suisse: Global household wealth increases 4.9% to USD 241 trillion,
               marked by a resurgence of wealth in the Eurozone

Wealth of USD 51,600 per adult in the world reaches all-time high

PR Newswire

ZURICH, Oct. 9, 2013

ZURICH, Oct.9, 2013 /PRNewswire/ -- The Credit Suisse Research Institute
today released its fourth annual Global Wealth Report 2013, which finds that
from mid-2012 to mid-2013 aggregate global household wealth increased by 4.9%
in current dollar terms to USD 241 trillion, despite the continuing challenges
posed by the economic environment.

(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO )

North America gained USD 8.4 trillion, an increase of 11.9%, fueled by a
recovery in house prices and a bull equity market in the United States. It
became the lead region in terms of total net wealth for the first time since
2005, overtaking European holdings, which added USD 5.5 trillion, an increase
of 7.7%. As a result of a 22% depreciation of the Japanese yen against the US
dollar during the period, household wealth in Japan dropped 20.5% to USD 22.6
trillion, dragging down total wealth in Asia Pacific by 3.7% to USD 73.9
trillion. However, Asia Pacific ex-Japan continued to register stable wealth
growth by 6.2% to USD 51.3 trillion in mid-2013. 

Key findingsof the report include:

  oWealth is to rise by nearly 40% in the next five years, reaching USD 334
    trillion by 2018
  oEmerging markets are to increase their share of global wealth to 23% by
    2018, with China alone expected to represent over 10% of global wealth
    then
  oThe US is to remain the undisputed leader in terms of aggregate wealth,
    with total net worth approaching USD 100 trillion by 2018
  oEurozone wealth per adult in 2013 has recovered more than half of the
    large loss experienced 12 months earlier, mainly due to rising equity
    prices
  oSwitzerland ranks highest in average wealth, breaking the 500,000 USD
    level to hit a new high of USD 513,000 per adult
  oThe number of millionaires worldwide is to increase by about 16 million
    reaching 47 million in 2018

Giles Keating, Global Head of Research for Private Banking & Wealth
Management, Credit Suisse, said: "The fourth annual Credit Suisse Global
Wealth Report shows a USD 11 trillion rise in wealth to over USD 241 trillion,
with the US as the clear winner overtaking Europe and APAC falling back due to
the sharp depreciation of the yen. We look at wealth mobility for the first
time and it appears surprisingly high. For instance, less than two-thirds of
the 2000-01 Forbes billionaires remained on the listby 2005, and barely half
were on it by the end of the decade."

Credit Suisse Research Institute's Michael O'Sullivan said: "Our research
shows that global wealth has doubled since 2000, quite compelling given some
of the economic challenges of the last decade.We expect this trend to
continue in the foreseeable future, driven largely by Emerging Markets' strong
economic growth and rising population levels."

Credit Suisse provides the most comprehensive and reliable source of
information on global household wealth available. The analysis comprises the
wealth holdings of 4.7 billion adults across 200 countries – from billionaires
in the top echelon to the middle and bottom sections of the wealth pyramid,
which other studies often overlook.

For a copy of the Credit Suisse Research Institute report, "Global Wealth
Report 2013," please click here.

Highlights of the Global Wealth Report 2013

Changes in Wealth from 2012-13
Total global household wealth increased in current dollar terms to USD 241
trillion, or USD 51,600 per adult in the world, an all-time high for average
net worth.

In recent years, exchange rate movements versus the US dollar have
significantly impacted the relative wealth rankings of individual countries.
During the year to mid-2013, exchange rates were confined to a narrower range
than in the past, therefore, had less impact. Exceptions include Japan, whose
currency depreciated by 22%, and Egypt, Argentina and South Africa, which were
devalued by more than 15%.

In most other parts of the world, the economic environment has been generally
favorable towards wealth acquisition. While Japan's currency issues led to a
net loss for the Asia-Pacific region, gains were recorded in all other
regions. Total wealth in North America (up 11.9%) overtook European holdings
(up 7.7%) to become the lead region for the first time since 2005 (see Table
1).

Table 1: Changes in Household Wealth 2012-13 by Region

                                Total Wealth 2013 Change in Total     % Change
Region                                            Wealth
                                USD billion                           2012-13
                                                  2012-13 USD billion
Africa                          2,711             32                  1.2%
Asia-Pacific (including China   73,879            -2,859              -3.7%
and India)
Europe                          76,254            5,475               7.7%
Latin America                   9,139             317                 3.6%
North America                   78,898            8,362               11.9%
World                           240,881           11,328              4.9%

Changes in Wealth from 2012-13: Focus on the Eurozone
Credit Suisse in its report details the resurgence of wealth in the Eurozone,
with rising equity prices and the slightly favorable euro-dollar movement to
recover more than half of the very large wealth loss experienced 12 months
earlier.

Wealth per adult was 154,900 euros in mid-2013 for the Eurozone as a whole,
but there are significant differences between countries. Credit Suisse
estimates indicate that household wealth in Austria, Germany, Ireland, and the
Netherlands is similar to the Eurozone level, but wealth is about 20% higher
in Italy and Belgium, and about 50% higher in France and Luxembourg. Countries
lower down the ranking include Spain and Cyprus with about 60% of the Eurozone
average, Greece with half of the Eurozone average, and Estonia and Slovakia
with less than 20% of the Eurozone level.

Wealth in the Future
Wealth is expected to rise by nearly 40% in the next five years, reaching USD
334 trillion by 2018. Credit Suisse expects that the pace of wealth generation
in emerging markets will continue to be greater than that of developed
markets. The share of wealth of emerging markets will likely reach 23% by 2018
at USD 76.9 trillion, an increase of 0.5% on average each year. The annual
rate of increase is projected to be 9.1% for emerging markets against 6.1% for
developed markets.

Among major economies, China will likely be the largest gainer in relative
terms with wealth to grow at a rapid pace of 10.1% over the next five years to
USD 35.9 trillion. China accounts for 9.2% of global wealth, and this will
rise to 10.7%. The US will lose some share, but will still account for 29% of
global wealth in 2018 with USD 98 trillion. Wealth in India will also grow
very rapidly, at an annual pace of 9.3% to USD 5.6 trillion in 2018. On a per
adult basis, China will increase its wealth by USD 12,100 to USD34,400 and
India by USD 1,900 to USD 6,600.

Estimates by Credit Suisse suggest that the number of global millionaires
could exceed 47 million in 2018, a rise of nearly 16 million. While the number
of millionaires in emerging economies is still far below the levels in the US
(18.6 million) or Europe (15.0 million), it is expected to increase
substantially in the next few years. China could see its number almost
doubling by 2018, raising the total to 2.1 million. Pushed by Brazil (an extra
186,000) and Mexico (an extra 87,000), Credit Suisse also expects a
substantial increase in the number of millionaires in Latin America, which
will reach almost one million in five years' time (see Table 2).

Table 2: Number of Millionaires in 2013 and 2018 by Regions, Selected
Countries and World

                                 Number (thousand) Number
Country                                            (thousand)       Change (%)
                                 2013
                                                   2018
US        13,216            18,618           41%
France            2,211             3,224            46%
UK                       1,529             2,377            55%
Germany              1,735             2,537            46%
Brazil          221               407              84%
Korea           251               449              79%
Mexico             186               273              47%
Singapore              174               235              35%
Indonesia             123               194              58%
Russia                         84                133              58%
Hong Kong                 103               168              63%
Turkey           102               158              55%
Poland            45                85               89%
Malaysia            38                67               76%
Chile         54                86               59%
                                 Number (thousand) Number
Region                                             (thousand)       Change (%)
                                 2013
                                                   2018
Africa                         90                163              81%
Asia-Pacific (inc. China &       6,571             11,488           75%
India)
Europe                           10,236            15,027           47%
Latin America                    569               936              64%
North America                    14,213            20,001           41%
                                 Number (thousand) Number
World                                              (thousand)       Change (%)
                                 2013
                                                   2018
World                          31,680            47,614           50%

Top of the Wealth Pyramid
Credit Suisse estimates suggest that worldwide there are 98,700 UHNW
individuals, those with net assets exceeding USD 50 million. Of these, 33,900
are worth at least USD 100 million and 3,100 have assets above USD 500
million. North America dominates the regional ranking, with 48,000 UHNW
residents (49%), while Europe has 24,800 individuals (25%), and 21,790 (22%)
reside in Asia-Pacific, including China and India.

Table 3: UHNWIs 2013: Selected Countries

Country     UHNWIs (> USD 50 Million) % of Global Total
US          45,650                    46.3%
China       5,831                     5.9%
Germany     4,501                     4.6%
Switzerland 3,457                     3.5%
UK          3,187                     3.2%
Japan       2,885                     2.9%
France      2,877                     2.9%
Italy       2,338                     2.4%
Canada      2,321                     2.4%
Australia   2,059                     2.1%
Russia      1,986                     2.0%
India       1,759                     1.8%
Brazil      1,704                     1.7%
Taiwan      1,373                     1.4%
Spain       1,299                     1.3%
Turkey      1,209                     1.2%
Korea       1,206                     1.2%
Hong Kong   1,145                     1.2%
Sweden      1,144                     1.2%
World       98,663                    100%

Wealth of Nations: Top 10 Countries with the Highest Average Wealth per Adult
in Mid-2013 (USD)
The richest nations, with wealth per adult over USD 100,000, are found in
North America, Western Europe, and among the rich Asia-Pacific and Middle East
countries. They are headed by Switzerland, which in 2011 became the first
country in which average wealth exceeded USD 500,000. It dropped below this
mark in 2012, but this year equity price rises resulted in a new peak value of
USD 513,000 per adult (see table 4).

Table 4: Top 10 Countries with the Highest Average Wealth per Adult in
Mid-2013 (USD)

Ranking Country                              Average wealth   Change since
                                             per adult        mid-2012 (%)
1       Switzerland                          513,000          6.1%
2       Australia                403,000          1.3%
3       Norway  380,000          9.0%
4       Luxembourg                       315,000          5.4%
5       US           301,000          11.4%
6       Sweden                               299,000          14.6%
7       France                               296,000          8.2%
8       Singapore                  282,000          6.8%
9       Belgium                256,000          8.7%
10      Denmark                  255,000          10.1%

Wealth Mobility
While the wealth pyramid provides a "snapshot" of wealth at a given point of
time, individuals are constantly moving between the various strata. Credit
Suisse looks at wealth mobility to supplement what is known about changes in
individual wealth positions.

The percentage of billionaire "stayers" is broadly similar across countries,
although there are some notable outliers and some interesting wealth mobility
differences between countries:

  oFrance, Italy and Japan might be expected to have a lower percentage of
    "stayers" because their billionaire ranks shrank considerably over the
    decade.
  oCanada, Germany and the UK also have fairly low retention rates.
  oThe US has by far the highest fraction of stayers, with 78% of the 2000-01
    billionaires surviving to 2005 and 65% remaining in 2010. This may reflect
    that US billionaires have higher mean wealth, so they have to fall further
    on average to exit the group. Also, they face little or no exchange rate
    risk; whereas in other countries, entry and exit from the billionaire list
    may be due simply to fluctuations in the USD exchange rate.
  oOf the BRIC countries, a notable feature for China is the sharp increase
    in the number of billionaires after 2005, reflecting the rapidly
    lengthening upper tail of the Chinese wealth distribution, resulting in
    high upward structural mobility.
  oOf the BRIC countries, billionaires have the highest chance of surviving
    in Russia. The number of Russian billionaires more than doubled from 2005
    to 2010, so the high survival rate likely reflects low downward structural
    mobility in the upper wealth tail, as well as higher than average wealth
    among world billionaires and – quite possibly – state protection of
    billionaire interests leading to lower exchange mobility at the top end
    than seen in other countries.

Notes to Editors

  oThe Report defines net worth or wealth as the value of financial assets
    plus real assets (mainly real estate), minus household debt.
  oThe figures presented in the Report are based on the best available data
    on household assets and debts, updated and estimated where necessary.
  oAll current data relate to mid-2013; the figures for earlier years
    indicate year-end values.
  oProjections to 2018 are made by the Credit Suisse Research Institute and
    are based on forecasts of the three components of wealth, financial
    assets, non-financial assets and debts.

To obtain a copy of the Credit Suisse Global Wealth Report 2013, please
visit:
https://www.credit-suisse.com/researchinstitute.

Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers
and is part of the Credit Suisse group of companies (referred to here as
'Credit Suisse'). As an integrated bank, Credit Suisse is able to offer
clients its expertise in the areas of private banking, investment banking and
asset management from a single source. Credit Suisse provides specialist
advisory services, comprehensive solutions and innovative products to
companies, institutional clients and high net worth private clients worldwide,
and also to retail clients in Switzerland. Credit Suisse is headquartered in
Zurich and operates in over 50 countries worldwide. The group employs
approximately 46,300 people. The registered shares (CSGN) of Credit Suisse's
parent company, Credit Suisse Group AG, are listed in Switzerland and, in the
form of American Depositary Shares (CS), in New York. Further information
about Credit Suisse can be found at www.credit-suisse.com.

Disclaimer
This document was produced by and the opinions expressed are those of Credit
Suisse as of the date of writing and are subject to change. It has been
prepared solely for information purposes and for the use of the recipient. It
does not constitute an offer or an invitation by or on behalf of Credit Suisse
to any person to buy or sell any security. Any reference to past performance
is not necessarily a guide to the future. The information and analysis
contained in this publication have been compiled or arrived at from sources
believed to be reliable but Credit Suisse does not make any representation as
to their accuracy or completeness and does not accept liability for any loss
arising from the use hereof.

Appendix

(1) Biographies of the authors
Anthony Shorrocks is Director of Global Economic Perspectives Ltd. After
receiving his PhD from the London School of Economics (LSE), he taught at the
LSE until 1983, when he became Professor of Economics at Essex University,
serving also as Head of Department and Director of Economic Research for the
British Household Panel Study. In 2001 he was appointed Director of the World
Institute for Development Economics Research of the United Nations University
(UNU-WIDER) in Helsinki where he remained until 2009. He has published widely
on income and wealth distribution, inequality, poverty and mobility and was
elected a Fellow of the Econometric Society in 1996. Publications include "The
age-wealth relationship: A cross section and cohort analysis" (Review of
Economics and Statistics 1975), "The portfolio composition of asset holdings
in the United Kingdom" (Economic Journal 1982), and, with Jim Davies and
others, "Assessing the quantitative importance of inheritance in the
distribution of wealth" (Oxford Economic Papers 1978), "The distribution of
wealth" (Handbook of Income Distribution 2000), "The world distribution of
household wealth" in Personal Wealth from a Global Perspective (Oxford
University Press 2008), "The global pattern of household wealth" (Journal of
International Development 2009) and "The Level and Distribution of Global
Household Wealth" (Economic Journal 2011).

Jim Davies is a Professor in the Department of Economics at the University of
Western Ontario in Canada, where he has been a faculty member since 1977 and
served as chair of the department from 1992 to 2001. He received his PhD from
the London School of Economics in 1979. Jim was the director of the Economic
Policy Research Institute at UWO from 2001 to 2012. In 2010 he completed a
five-year term as managing editor of the academic journal Canadian Public
Policy. From 2006 to 2008, he directed an international research program on
household wealth holdings at UNU-WIDER in Helsinki and edited the resulting
volume, "Personal Wealth from a Global Perspective" (Oxford University Press
2008). He has authored two books and over 70 articles and chapters in books on
topics ranging from tax policy to household saving and the distribution of
wealth.

Publications include "The Relative Impact of Inheritance and Other Factors on
Economic Inequality" (Quarterly Journal of Economics 1982), "Wealth and
Economic Inequality" (Oxford Handbook of Economic Inequality, Oxford
University Press, 2009), and several publications on wealth authored jointly
with Anthony Shorrocks and others. Jim is also the editor of "The Economics of
the Distribution of Wealth", a two volume compendium of classic articles that
will be published later this year by Edward Elgar.

Rodrigo Lluberas is a PhD candidate in Economics at Royal Holloway College,
University of London and a visiting scholar at the Institute for Fiscal
Studies. He holds an MSc in Economics from University College London and a BA
in Economics from Universidad de la Republica, Uruguay. Prior to undertaking
his MSc, he worked for three years as an economic analyst at Watson Wyatt
Global Research Services and more recently as a research assistant at NESTA.
His main areas of expertise are pensions, consumption and wealth.

(2) Scope and methodology
The 2013 Credit Suisse Global Wealth Report (the Report) and the more detailed
accompanying Global Wealth Databook aim to provide the most comprehensive
study of world wealth. Unlike other studies, they measure and analyze trends
in wealth across nations, from the very bottom of the "wealth pyramid" to
ultra high net worth individuals.

This fourth Wealth Report continues our close collaboration with Professors
Anthony Shorrocks and Jim Davies, recognized authorities on this topic, and
the principal authors of "Personal Wealth from a Global Perspective," Oxford
University Press, 2008.

This year, our special focus is on wealth mobility, which appears surprisingly
high in the short run. For instance, less than two-thirds of the 2000–01
Forbes billionaires remained in the list by 2005, and barely half by the end
of the decade. Across generations, the latest evidence points to more
persistence, although continued high wealth growth in countries like China
will ensure that many individuals rise rapidly in the wealth pyramid.

Taking a broader perspective, our analysis suggests that ten generations or
more have to lapse before the wealth of an individual in North America is
completely independent of the wealth of their ancestors. From a global point
of view, individuals in China and India have a relatively high probability to
be upwardly mobile as a result of the high economic growth in these countries.

The Credit Suisse Global Wealth Report lays the foundation for a long-running
examination by the Credit Suisse Research Institute of one of the crucial
research areas in economics, and a vital driver of future megatrends.
Moreover, it continues the thought leadership and proprietary research
undertaken by the Research Institute over the past three years.

Of note, China and India are treated as separate regions in the report due to
the size of their populations.

(3) The Credit Suisse Research Institute
The Credit Suisse Research Institute identifies and provides insights on
global themes and trends. The objective of the Research Institute is to
provide our clients with leading edge advice by leveraging internal and
external expertise, thus reinforcing our integrated global bank approach.

The Institute was established in December 2008 to conduct research on new
emerging or influential topics, working with some of the world's most
distinguished experts, academics and institutions and Credit Suisse's global
network of internal analysts, and makes this available throughout the Bank for
the business units to create innovative products, solutions and services for
Credit Suisse's clients.

Clients increasingly require global reach, local expertise and competitive
products and services from the financial services industry. The Institute's
investigations are conducted with the goal to furnish clients across divisions
and regions with an in-depth analysis of fundamental social, economic,
scientific, environmental and demographic trends that are expected to impact
global markets in the future.

The Research Institute is chaired by the Chairman of the Board of Credit
Suisse, Urs Rohner, and managed by an Operating Committee from Credit Suisse's
research units from across the Bank. The Institute draws on eminent Senior
Advisors as well as selected Credit Suisse researchers to provide advice,
insight and guidance on global themes and trends for the Institute's research
agenda. The Institute's Senior Advisors are characterized by their
interdisciplinary backgrounds and networks across sciences, academia, business
and the political arenas. They include Walter B. Kielholz, The Rt. Hon. Sir
John Major, KH, CH, Liu Mingkang, Dr. Laura D. Tyson, and Dr. Ernesto Zedillo.
For more information, visit: https://www.credit-suisse.com/researchinstitute.



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