CITI FINANCIAL QUOTIENT SURVEY 2009: SINGAPORE RESIDENTS KEEN TO INVEST AGAIN AS ECONOMY AND MARKETS IMPROVE

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1 FOR IMMEDIATE RELEASE Citibank Singapore Ltd 4 January 2010 CITI FINANCIAL QUOTIENT SURVEY 2009: SINGAPORE RESIDENTS KEEN TO INVEST AGAIN AS ECONOMY AND MARKETS IMPROVE Survey findings point to a return in risk appetite as respondents seek to rebuild savings and grow wealth but this is balanced by greater cautiousness A recent nation-wide survey by Citi on financial well-being and attitudes shows that more Singapore residents are now ready to invest and grow their wealth, albeit with greater cautiousness. The findings from the latest Citi Financial Quotient (Fin-Q) Survey 2009 showed that sentiments were turning positive along with the economic outlook and improvement in financial markets. According to the survey, four-in-ten respondents who stopped investing in the midst of the financial crisis have now either resumed investing or are open to it once the right opportunity arises (13% and 31% respectively). A further 36 per cent said they stayed invested throughout while just one-in-five (21 per cent) continue to prefer holding their savings in cash or near-cash equivalents. For investors or those open to investing, the survey findings also suggested a return in risk appetite. Topping the list of preferred investments for this group were equity instruments: 54 per cent opted for stocks as part of their portfolios while 28 per cent picked mutual funds or unit trusts. Lower-risk instruments such as corporate/government debt or term deposits attracted 19 per cent each. Twoin-ten also indicated buying property for future sale or rental yield as an area of investment they look into.* At the same time, the willingness to invest is balanced with an increased level of cautiousness: One-in-four respondents said they were a lot more cautious while 42 per cent indicated that they were a little more cautious in their investment decisions. This is in tandem with the finding that just 39 per cent believe that the worst of the global financial crisis is behind us. 1

2 The Fin-Q survey, commissioned for the third consecutive year by Citi was conducted by Independent global research firm CXC Research across 11 markets in Asia Pacific, comprising Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Taiwan, Thailand and Singapore. In Singapore, the online survey was conducted from 6 to 15 October with 400 randomly selected respondents split by gender (50/50) and across multiple age and income groups. The survey in Singapore also highlighted that the top three financial concerns of residents are rebuilding their savings, meeting monthly expenses and greater retirement savings. 60% of respondents felt that their finances had been affected by the recent crisis and four-in-ten (39 per cent) said that their retirement savings had suffered serious losses as a result. There was strong recognition among respondents that their CPF (Central Provident Fund) monies would need to be supplemented by retirement savings, with 73 per cent indicating that their CPF funds will provide only some or very little of the income they require in their older years (47% and 26% respectively). Monetary concerns continued to affect the way Singapore residents spend with three-quarters of respondents indicating that they had cut back on non-essential spending; and 48 per cent postponing trips.* Commenting on the findings, Mr Shrikant Bhat, Head of Wealth Management, Citibank Singapore, said, The survey accurately reflects the current investor sentiment in Singapore. With confidence and stability returning to markets, there is a discernible increase in willingness amongst investors to assume a little more risk. Investors who had sought refuge in cash and steady yield products are now seeking higher returns and ways to better grow their money. However, it is also true that investors are asking a lot more questions about the products they buy and are making more informed investment decisions. They are also more likely to view their investments within the framework of a holistic portfolio over a longer-term horizon. These are sound investing principles which we at Citibank constantly promote. The Managing Director of CXC Research, Mr Justin Lewis added, The Citi Fin-Q research program is designed to measure the financial wellbeing/preparedness of consumers to respond to short, medium and long-term financial issues. The recent survey results in Singapore show that while the recent Global Financial Crisis had a negative impact on a broad cross-section of Singapore residents, a strong majority remain optimistic about their economic future. At the same time, while there is definitely room for improvement, the trend data over the past three years show Singapore residents continue to take small steps in the right direction. 2

3 About the Citi Fin-Q Survey 2009 The Citi Fin-Q Survey was designed to measure the Financial Quotient (Fin-Q Score) or financial well-being of consumers. As part of this survey, Citi scored respondents on 11 different questions closely related to financial well-being with a maximum possible score of 100. This year s overall Citi Fin-Q score for Singapore residents was 55.1 out of a possible total score of 100. This score represents a marginal improvement over the score of 54.6 in 2008, and suggests there is further room for improvement. (Refer to Annex for details on individual financial subject area Fin-Q scores) As in previous years, the demographic data revealed that Fin-Q scores tended to rise in tandem with age, income and the level of retirement savings currently set aside. Males also typically outscored females. The survey also probed the attitudes and concerns of Singapore residents over their personal financial situation, the impact of the global financial crisis on their finances, as well as their views towards investing and saving for retirement. ############# About Citi Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi s major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at or Media Contacts Caren Lee +(65) (65) Kelvin Wong +(65) (65) Geraldine Ding +(65) (65) caren.lee@citi.com kelvin.wong@citi.com geraldine.ding@citi.com 3

4 ANNEX Summary of the Citi Fin-Q Survey 2009 (Singapore) Overall Fin-Q financial health scores: The Citi Fin-Q Survey 2009 posed questions to respondents in 11 different key financial subject areas including their approach towards budgeting, savings, credit card payment as well as the status of their insurance and retirement savings. Respondents were scored on each question depending on their answers - the higher the score for the question in each subject area, the better their financial position in that area. Singapore residents had an average Fin-Q Score of 55.1 points (from 54.6 in 2007) out of a possible 100, suggesting there is still room for improvement. 55 per cent of Singapore residents had a Fin-Q score greater than 50. The demographic data revealed that the average Fin-Q score tended to increase according to the individual s age, income and retirement savings. Males typically outscored females. Fin-Q score highlights for individual financial subject areas: Seven-in-ten Singapore residents (74 per cent, up 2 per cent from 2008) said they are very satisfied or satisfied with their overall quality of life with the rest reporting that they are not satisfied. 72 per cent (up 5 per cent from 2008) are very optimistic or optimistic about their financial future. The remaining 28 per cent are worried about their financial future. A third of the Singapore residents (31 per cent) surveyed set-out and follow a monthly budget. Almost half of those surveyed (46 per cent) set aside some money as savings every time they get paid. A significant majority of Singapore residents (77 per cent, unchanged from 2008) pay off their credit card balance in full in the average month. Seven-in-ten Singapore residents (71 per cent, down 2 per cent from 2008) believe they have enough insurance to protect them and their families. 4

5 Only 27 per cent (up 1 per cent from 2008) have a formal retirement plan while 11 per cent (down 3 per cent from 2008) have an up-to-date will. Impact of global financial crisis and attitudes towards investing A significant six-in-ten of Singapore residents say their finances have been affected by the crisis. 39 per cent report that their retirement savings suffered serious losses. Only 39 per cent think that the worst of the global crisis is behind us but 61 per cent say they feel quite confident in the country s economic future. The top three financial concerns of Singapore residents, as the country emerges from the crisis, are building their savings back up, meeting their monthly expenses; and doing a better job saving for retirement. 31 per cent stopped investing during the crisis but are now open to investing with the right opportunity while 13 per cent have already started investing again. Another 36 per cent stayed invested. The most popular investment instruments are stocks (54 per cent) and mutual funds/unit trusts (28 per cent). * Retirement savings and the role of CPF funds About one-in-five Singapore residents (22 per cent) feel they know how much retirement savings they need and are on track while another 52 per cent had started saving. 13 per cent had no idea how much they would need or had not started planning for retirement yet. The majority of respondents (73 per cent) believe that their CPF monies will provide only some or little of the income they need in retirement. For this group, 26 per cent say the main alternate source of income they will rely on most is working for as long as possible, while 24 per cent will turn to their retirement savings. 5