Bank of Singapore, OCBC’s private bank, has struck an agreement with Zurich-based Bank Vontobel that enables its Asian clients to book their assets in Switzerland.
The deal will enable BoS clients to access Vontobel’s European financial products and services, and to choose either firm to manage their assets booked in Zurich.
It is a good move for both firms, said industry experts, but whether it will see significant take-up or will drive new asset inflows remains to be seen.
The partnership helps to remove one of the disadvantages Bank of Singapore has compared to the likes of UBS and Credit Suisse, noted Steven Seow, Asia head of wealth management consulting at Mercer. He pointed out that BoS’s chief executive, Bahren Shaari, used to work at UBS.
“But I am not sure how big the take-up rate would be,” Seow (pictured left) told AsianInvestor. “In any case, giving the clients another booking centre option is always a good thing.”
Trend for alliances
Justin Ong, Asia-Pacific leader of the asset and wealth management practice at PwC, said: “I think it’s a great move, but in reality it is probably capitalising on what was already in existence. The way forward for expansion by Asian wealth players into new markets is going to be by alliances, rather than M&A.”
Other industry players agree with this view, including Jean-Louis Nakamura, Asia-Pacific chief investment officer at Lombard Odier, a Swiss bank that is focused on the local partnership approach in the region. And Swiss firm UBP established an alliance with Chinese wealth manager Noah Holdings in 2015.
Moreover, BoS is not the first Asian private bank to have partnered with Vontobel. ANZ did so in 2013, but without its clients being able to book assets in Switzerland. BoS also offers booking services in Hong Kong.
The new deal is beneficial for both BoS and Vontobel, Ong told AsianInvestor. “There are clearly Asian high-net-worth individuals who already book directly in Europe through other means, and this gives them an option to now get serviced also via a locally domiciled player.”
Meanwhile, firms like Vontobel that lack a large presence in Asia and don't necessarily want to build too much capacity on the ground in the region can seek to attract clients and assets through the alliance with BoS, said Ong.
Likewise, their European clients can now access Asian expertise and products via BoS, he added.
“Whether or not this will reap new and significant asset gathering is still too early to say," noted Ong, "but at the very least the ability to create a new market opportunity without incurring heavy investment and costs in creating onshore presence for both parties makes a lot of sense.”