Since taking over Coutts International, Union Bancaire Privée (UBP) has a strong presence in Asia. Is it important to be a Swiss bank there?
Guy de Picciotto: Without a doubt, Swissness is important – more important even than in Europe or Latin America. Do we capitalize on it? No.
GDP: UBP has never been markedly Swiss. When my father – Edgar de Picciotto – founded the Bank in 1969, the big Swiss banking names already existed. In order to stand out, he started to invest in hedge funds very early on making us a pioneer on the investment side. Later on, we began to take over foreign financial banks, which made us definitely more international than others. Today that’s what almost everyone is doing.
Is the story true that in the bank’s early days, your father would leave the lights on in the offices day and night to give the impression of being busy?
GDP: He often told me that story, so it’s probably true (laughs). But seriously, in comparison with other private banks in Geneva, we were always somewhat different.
Are you going to celebrate UBP’s 50th anniversary?
GDP: That’s a tricky question. No. In fact, while it’s true that our father Edgar de Picciotto founded Compagnie de Banque et d’Investissements (CBI) in 1969, UBP’s roots reach as far back as 1956 when TDB American Express Bank was born, a firm which merged into CBI in 1990 to become UBP.
So that's another distinguishing feature of our bank: it has several birthdays! And some will remember that we already celebrated it in 2006. But we celebrated again internally in June this year. Well, whoever said we do things like everyone else? (laughs)
In recent years, UBP has taken over a range of competitors in Switzerland, such as the international private banking arm of ABN Amro, Lloyds International Private Banking and most recently, Coutts International. This British institute was very strong in Asia. Does this mean you’ve reached a critical mass in the region?
GDP: No. That definitely cannot be said with 18 billion Swiss francs in private clients’ assets under management. Our closest competitors are around twice as big as us. In order to stay on clients’ and other relationship managers’ radars, we have to grow further. Admittedly, that’s tough, as it’s what every bank is trying to do.
Does that mean the next acquisition is already on the agenda?
GDP: In Asia, we can definitely grow organically and we’re hiring larger teams of relationship managers. However, another acquisition would certainly help us to take a quantum leap forward. That said, at the moment there aren’t any attractive takeover targets.
Has a new cycle begun, following the recent years of consolidation?
GDP: Probably. Financial institutions that had to review their strategies and have come to the conclusion that they should pull out of Asia or Switzerland, have since done so. The wave of consolidation has come to an end.
What would be the critical mass for UBP in Asia?
GDP: There’s no exact figure. We are profitable in Asia, but we haven’t yet reached critical mass. The level is probably around the point at which it becomes too big to be managed properly and according to our culture and values.
What’s your growth rate if you just grow organically in Asia?
Michael Blake: Over the last three years, we’ve grown by 45 percent. To my mind, that’s a healthy rate of growth that we want to sustain, but this has to happen in a controlled way.
We don’t want to take on thirty new relationship managers in one year, only to cut twenty of them twelve months later. If we keep up the current momentum, so about ten to fifteen new RMs per year, that’s about right.
What effects are the pro-democracy demonstrations in Hong Kong having on your business?
MB: Let’s put it this way: clients are concerned, but at the moment they’re waiting to see how the whole situation develops.
In financial circles, there’s talk that the wealthy are relocating their assets from Hong Kong to Singapore. Is that true?
MB: The problem with that assertion is that it’s complete hearsay. In other words, you can’t prove it, or at least it’s not what we’re seeing.
GDP: In all honesty, I doubt this is happening, although there might be banks that are working on it.
Do you now go to Hong Kong more often to monitor the tense situation there?
MB: No. Generally, I’m in Hong Kong about twice a month. In terms of our day-to-day business, there has been no major change. There remain a lot of business opportunities across the whole greater China region, including in Hong Kong.
Where is UBP seeing the strongest growth in Asia?
How do you convince clients to opt for UBP rather than for one of the myriad other banks?
In Asia, we are seeing strong demand for tailored asset management mandates, especially from clients with assets of at least $10 million. At UBP, private clients can benefit from the solutions offered to institutional clients and this makes a difference.
On top of that, we’ve got a great deal of know-how in advising family offices, as well as advising wealthy families, who want to set up a family office. This is an expertise we’ve recently launched in Asia.
The big private banks in Geneva are keen to stress that they’ve been family-owned for hundreds of years. UBP is also family-owned, but it doesn’t put this fact center stage. Why not?
GDP: The vast majority of wealthy clients in Asia aren’t at all familiar with Swiss private bank brands and history. Besides, hardly anybody knows how to pronounce my surname! (laughs)
Being family-owned is an advantage, but what really matters is having relationship managers who know their clients, understand their needs, and deliver.
You mentioned that you hunt whole teams from your competition. Do these private bankers also manage to convince their clients to change banks?
MB: That really depends on the particular client relationship – how long it’s existed and how close it is.
GDP: Some teams that we’ve hired come over because they no longer feel comfortable elsewhere due to internal restructuring. Generally, their clients then come with them.
It sounds cynical, but I often say that in banking, you often grow because of others’ mistakes. That’s why we have to make fewer mistakes than others. It sounds worrying, but it’s true.
In Asia, the signals are pointing to growth. How are things looking in Switzerland?
GDP: Different. Swiss banking is still fighting old battles. Laws and regulations are constantly changing and getting stricter, and access to the European market will probably never happen. This means we need to get out; meanwhile local European banks are becoming ever more competitive and there’s a bitter pricing war raging. I have no idea where it will all end up.
In other words, you can’t really grow in Europe.
GDP: It takes a lot of effort. Without a doubt, Germany is attractive and we work on this market out of Zurich.
In contrast, France – which was formerly very important – is no longer a priority market for us, as a lot of wealthy French clients have decided to relocate outside of France Italy, is attractive and we have growth plans in the near future.
Guy de Picciotto
Head of Wealth Management Asia & CEO Asia