When Switzerland’s Union Bancaire Privée (UBP) bought the international wealth management business of UK bank Coutts in 2016, adding $10bn to its client assets and 250 staff, the main prize was in Singapore.
Coutts had a strong foothold there, under CEO Mike Blake, now running UBP’s business in Asia. But what was a small office in Hong Kong is now also earmarked for expansion, as the bank begins to target China and the northern economies, in addition to nearby south-east Asia.
“I have a real soft spot for Hong Kong,” admits Mr Blake, who spent five years there helping run the UBS Asia Pacific business between 2005 and 2010.
He has just recruited a team of 20 private bankers from key rival BNP Paribas in Hong Kong, according to market sources close to the hirings. He nods and smiles knowingly when discussing the mass defection, although he will not reveal the numbers publicly.
“We will continue selectively hiring where we see bankers with a shared vision, values and a cultural fit,” says Mr Blake, repeating the sort of identikit corporate statement common to CEOs across Asia. In reality, this has been an opportunistic swoop, which his deal-making boss Guy de Picciotto will be proud of.
This is a clear indication of UBP’s faith in Hong Kong and in Mr Blake, at a time when many are dismissing the territory as falling behind neighbouring Shenzen on the Chinese mainland in terms of entrepreneurial dynamism and digital innovation. Around half of UBP’s 300 Asian staff are now based in Hong Kong.
“I have a huge belief in Hong Kong’s ability to re-invent itself,” he says. “Normally it does that just as everybody writes it off. We have heard the story for the last two decades that it can’t compete with Shanghai or Singapore, yet every time it changes its act and continues to flourish.”
In this latest re-invention, as financial centre of China’s Greater Bay Area, it is China’s proximity to the mainland, acting as a bridgehead to the world, which will create Hong Kong’s biggest advantage, says Mr Blake.
He knows both sides of the internal border well. In addition to spending much time in Hong Kong, both in his current and previous roles, he studied Mandarin at the Beijing Normal University in the late 1990s, as he familiarised himself with Chinese culture, in preparation for the “Asian Century”.
This forward thinking impressed UBP boss Mr de Picciotto. Looking for a leader with experience, humility and personality to spearhead the Asian operation, in Mr Blake he found a deep thinker schooled at Oxford University, where he studied Politics, Philosophy and Economics, and a keen amateur footballer, able to combine tactics and strategy.
Now Mr Blake feels the pace of development in mainland China will justify fast expansion for UBP’s Hong Kong operation. “Over the last 10 to 15 years, we have seen increased connectivity between Hong Kong and the Chinese mainland,” he says. “This has included both the Stock Connect system [involving integration and collaboration between the Hong Kong, Shenzen and Shanghai stock exchanges] and improvements in physical transportation, making it easier to cross the boundary. This is in the interests of Hong Kong, China and the border regions.”
This mainland Chinese dynamic provides the new engine for UBP. Over the last two and a half years, assets held by north Asian clients are up 50 per cent, growing faster than south-east Asian business. Most growth comes from new clients, on top of assets and customers transferred from Coutts. Mr Blake’s Asia Pacific unit currently manages SFr20bn ($20bn), around 15 per cent of the group total, but the Geneva head office has ambitions for this to increase significantly, with China spurring the Hong Kong expansion.
CEO Private Banking Asia