BSI’s deputy CEO for Asia, Esther Heer, is poised to step up hiring after the boutique private bank was granted a branch licence by the Hong Kong Monetary Authority this week.
The Swiss firm, which in 1998 became part of Italian insurer Generali, submitted its application in the second week of January – meaning the process took just shy of 11 months to be approved.
It brings the number of licensed banks in Hong Kong to 152. The last private bank to gain an HKMA operating permit was Banque Privée Edmond de Rothschild SA on September 16.
Previously BSI Investment Advisers (Hong Kong) was operating with an investment advisory licence from the Securities & Futures Commission.
Asked about the importance of a banking licence, which will allow BSI to book assets in the city, Heer tells AsianInvestor: “If you want to be an international private bank, Hong Kong is clearly an important booking centre. It is a conduit to China and a strong financial centre in itself.
“There are a lot of overseas investors who are very keen to maintain accounts directly in Asia, where people have first-hand information and understand the region. We have had many people approach us about maintaining pure Asian portfolios in Hong Kong.”
BSI has been on a targeted build-out in Asia following the recruitment of Hanspeter Brunner as regional CEO last year and now has over 230 staff in Singapore, from just 30 in 2009.
Heer, who rejoined her former RBS Coutts colleague Brunner a few months later, now has over 70 staff to cover North Asia, including a team in Singapore, and plans to double this within three-to-five years.
One of her first tasks will be to appoint a head for Greater China – or at least China and Taiwan – and she will be better placed to make an appointment with the backing of a bank licence.
She says she has already been in discussion over such a hire and will be hoping to wrap up an appointment soon. “There was a very good opportunity to hire in 2009 and 2010, and maybe the first part of this year, but now I think people are a little hesitant again,” she reflects.
“I hire entirely on reputation and while I work with headhunters I rely on my own instincts and what I know from having been in the market a long time.”
BSI has four bankers in Hong Kong covering China and Taiwan, which Heer hopes to expand to 10-15. She also has seven bankers in Singapore covering those two markets.
She confirms that operations hires in Hong Kong are completed, meaning human resources, compliance, risk, finance and credit. “It is very important to have that established for the branch, because you need to have everything in place when your bankers arrive,” she confirms.
She says she will look to increase BSI’s wealth management team in Hong Kong, led by Todd James and comprising four investment advisers, one research analyst and a risk manager. “We have set up the platform, now this team needs to be increased,” she notes.
Heer is a believer that old-school private banking is back in fashion, with clients irked at losing money that was managed single-handedly by a private banker.
“We want to encourage the idea of using an investment team and portfolio management,” she says, noting that Chinese clients are now more willing to consider portfolio management.
Heer estimates that BSI has no more than 10% of in-house funds on its platform, the rest being third-party products and ETFs (although it has a joint venture with Generali on the hedge fund management side, meaning all these products are internally generated).
Accounts up to $3 million with BSI are managed exclusively on a third-party funds basis, and Heer adds: “We have also taken the decision that we want to find more boutique fund houses. There are some very good fund managers out there who can provide value-add.”
BSI Group’s assets under management amount to SFr74.7 billion ($80.9 billion) as at June 30. Its Asia business represents over 10% of global AUM, having started 2009 below 4%.