UPDATE 4-RBS Coutts hit by Singapore staff exodus

* More than a quarter of Singapore staff quit Coutts

* Some staff joining Swiss bank BSI - sources

* Top private banker left Coutts for BSI Asia

* BSI aggressively expanding its Asian business

* RBS seen hit hard by UK curbs on bonuses

(Rewrites with comments from BSI, more details, background)

SINGAPORE/LONDON, Oct 13 - More than a quarter of the staff at the Singapore office of wealth manager RBS Coutts have quit and some are joining Swiss-based rival BSI as competition for Asian private bankers heats up.

RBS Coutts, part of Royal Bank of Scotland Group Plc (RBS), said on Tuesday "a little over 70 people" had resigned. This was equivalent to about 28 percent of Coutts' Singapore staff and 15 percent of the wealth manager's Asia staff.

The exodus of yet more investment bankers from part-nationalised RBS, whose RBS Coutts arm employs 500 and manages over $16 billion in Asia, follows the recent planned introduction of new British rules to curb bonuses.

"If you are an ambitious Asian wealth manager, why would you go and work for any British bank?," said an unnamed banking analyst, referring to caps on bonuses at a time when wealth managers in Asia are competing for staff. "It's about the money. It's always about the money in private banking," added a former banker with RBS Coutts.

While RBS Coutts gave no reason for the resignations, a company source in Singapore said the bank pays "market competitive" rates to its staff.

The Asian departures from RBS Coutts -- sister company to London based Coutts & Co, which counts Queen Elizabeth II among its clients -- come just weeks after former co-CEO Hanspeter Brunner left to head-up BSI's Asian operations out of Singapore.

Sources familiar with the situation said Raj Sriram, head of RBS Coutts' South Asia unit, had also left to join BSI and some staff will join him and Brunner.

Brunner is due to start at BSI in March 2010.

The fight for staff comes as Singapore's importance as a international wealth management centre rises and top banks seek to secure a presence there.

The focus right now is on the sale of the Asian private banking assets of ING, with Britain's HSBC and Singapore bank OCBC seen as possible buyers, sources familiar with the deal have said.

EXPANSION PLANS

An RBS Coutts spokeswoman in Zurich said the private bank has launched a five year expansion plan and was "aggressively" recruiting more staff with 200 new hires targeted in Asia in addition to replacing those that have left.

RBS Coutts also aims to double its managed assets in Asia over the five years with targets for Europe, where it has its headquarters, "in proportion" with the expansion in Asia. UBS and Citigroup rank as top players in Asia.

Lugano-based BSI, bought by Italian insurer Generali SpA before the onset of the financial crisis, also planned to "substantially increase" staff in Asia, spokeswoman Valeria Montesoro told Reuters.

"We...have started advertising our openings in several Asian newspapers three weeks ago," she said. The overall response to our campaign so far was positive."

BSI currently employs about 1,800 staff worldwide, with about 80 people in Asia.

Private banks and boutique firms are vying to tap the growth of millionaires in Asia. High net-worth individuals' wealth in Asia-Pacific is seen climbing 8.8 percent a year for the next 10 years, according to Merrill Lynch/Capgemini.

"Sadly the Asian private bank market remains a market that depends on raiding existing mature business and mature relationship managers from other banks," said Roman Scott, managing director of private equity firm Calamander Capital.

"There is continued dire shortage of experienced, mature relationship managers."