Led by chief executive officer Guy de Picciotto, Geneva-headquartered UBP propelled itself into the top 20 private banks in Asia ranked by assets under management (AUM) when it acquired Coutts from Royal Bank of Scotland. The family-owned bank saw its Asian AUM shoot up from less than US$1 billion in 2015 to just under US$12 billion after the acquisition.
Speaking to The Business Times when in Singapore recently, Mr de Picciotto said Coutts has been totally integrated and is doing very well.
"It is quite profitable. After goodwill, we are breaking even. Most important, we have been able to retain the clients, the bankers, add to the bankers, create products and services that help clients. So, I am very happy, and usually I never say I am very happy!" he laughed.
He has set a medium term target for the bank to achieve 30 per cent of its total AUM from Asia.
"This 30 per cent of the overall should be achievable within five years. Today, we are at below 20 per cent. Of course, I expect the overall assets of the bank to increase also."
Based on its financial results on June 30, 2017, UBP's assets under management rose to 118.9 billion Swiss francs (S$162 billion), from 113.5 billion francs the previous year.
As for clients and their needs,Michael Blake, UBP's Asia head, said demand from its two growth markets of China and Indonesia has changed.
"Ten years ago, everybody was saying entrepreneurs in China will be investing excess capital in their business because of the very high growth rates then. But in the last 10 years, those businesses have matured.
"A lot of the Chinese entrepreneurs have a more international lifestyle. They have children overseas and overseas businesses as well as second residences elsewhere. They are looking for an international wealth manager who can manage a diversified portfolio for them."
However, Mr de Picciotto said the bank cannot neglect Asia, especially in Singapore where there is a burgeoning private banking sector. It has been expanding both at home and overseas, buying Lloyds' international private banking business in 2013 and ABN AMRO's Swiss subsidiary in 2011 on top of Coutts.
The Asia-Pacific offers the greatest growth potential for private banking, growing nearly 10 per cent last year, against lower-single-digit rates in Europe and North America.
The integration of Coutts, Mr de Picciotto said, could have been executed more decisively if not for a reluctance to rock the boat too much.
"So, we decided to do it in two to three steps. Effectively, I know it would have been better to do it in one. It is better to take the pain, like when you remove the band-aid,'' he said, while mimicking the stripping of a plaster from his arm.
For now, acquisition is on the back burner for UBP, which boasts a Tier 1 ratio of 26 per cent and ranks among the best-capitalised banks in Europe.
"We don't have any funding issues for the acquisitions we would like to make, which are in the range of 10-20 billion Swiss francs worth of assets.
"Of course, if it were a bank with 100 billion, 200 billion francs, then we could stretch differently. But we are not looking at that,'' he said, adding that no target is in sight now.
"Although the Coutts acquisition went on smoothly, it was just a year and a half ago. We need to digest. That's why we didn't look at any this year although there were some very interesting candidates. But we have to leave them to our competitors. There are also not many suitable candidates around available for sale.''
UBP's clients typically want a long term relationship manager and an adviser who can meet inter-generational wealth transfer needs. They also want a strong and stable bank that can customise investment strategies.
This is crucial for success, given that in Asia, unlike Switzerland, private banking is dominated by a young talent pool, which focuses more on pushing products.
That is why UBP prefers to keep its hiring to a limited number of highly experienced bankers with 10-20 years behind them, who must be able to leverage on the bank's broad range of tools, products and services to customise new deals for clients.
"This is an important component," said Mr de Picciotto. "You can't judge a good hire based on what he transferred. It is not just a volume game. One of the approaches in this market is to go out and hire as many people as you can . . . We don't need to do that."
"If we can repeat that in 2018 and in 2019, we would have reached our goal of 100 bankers in the region that I last set," he said.
Post-Coutts, the bank now wants move beyond hiring for growth and focus on its key qualities.
"We are a family owned bank, and there are not many around. This means there are no big layers of management to go through. It is rather quick and direct to get a decision and match expectations of clients.
"The second is: we do wealth management for private clients and institutions. So we have an asset management department. This is a key component that we manufacture products and create products that are served through the distribution of the institutional business, and also for the private bank."
He cited an example in UBP's direct investment product offering which is particularly suited for Asia, where a lot of clients are entrepreneurs.
Direct investment product advisory is a new component it started two to three years ago. Since then, UBP has been involved in about 20 deals and sees traction by clients to continue this.
These are often club deals where a number of clients come together and make a direct investment in a business be it in commercial aviation, student accommodation in Europe or real estate assets in the US on long leases to organisations.
Mr Blake said: "These tend to be longer maturity yield plays, less liquid investments, but which complement a lot of clients' traditional portfolios. And certainly, given the client demography here and other parts of the world, we are dealing largely with high net worth, ultra-high net worth entrepreneurs.''
About Guy de Picciotto
Guy de Picciotto, 57, is the Head of the Geneva wealth management bank Union Bancaire Privée (UBP), which was founded in 1969 by his father, Edgar de Picciotto. After his business administration studies at Webster University, de Picciotto worked as a business consultant in Geneva and Brussels. In 1988 he joined UBP, which at the time was still Compagnie de Banque et d’Investissements. He has been CEO since 1998. As at the end of last June, the bank was managing CHF 119 billion worth of institutional and private clients’ assets, making it one of the ten biggest wealth managers in Switzerland. UBP employs nearly 1700 staff in over twenty locations around the world. The bank is owned by the de Picciotto family.