Julius Baer yesterday said it has received a banking licence from the Hong Kong Monetary Authority (HKMA) -- another step in the Swiss private bank's plan to strengthen its Asia platform.
The announcement was made at a press conference addressed by Thomas Meier, chief executive officer for Asia and the Middle East; Andrea Benenati, CEO for North Asia; Kenneth Ho, deputy global head of the investment solutions group; and Ian Pollock, chief financial officer for Asia and the Middle East, and chief operating officer for North Asia.
In his opening remarks, Meier repeatedly mentioned what a great moment the granting of a bank licence is for Julius Baer, and caused the assembled audience to laugh when he termed the event 'Benenati’s great moment' before he handed him the microphone.
Julius Baer has a stated ambition to grow Asia into its second home market and has spent the past four years since it set up shop in Hong Kong in 2006 strengthening its offering. The banking licence enables it to offer a full suite of services to clients who prefer to retain their assets in Hong Kong.
Hong Kong is Julius Baer's second booking centre in Asia after Singapore where it started its Asian operations in 2002. On the drawing board for Singapore is a trust company. Julius Baer has also filed an application to open a representative office in Shanghai, which it hopes will get approvals to launch next year.
The banking licence demonstrates the commitment of Julius Baer to both Hong Kong and North Asia, said Benenati. Asia currently represents around 10% of the bank's SFr166 billion ($172 billion) in assets under management (AUM) globally. Julius Baer aims to grow the AUM in Asia to between 20% and 25% of the total AUM over the next five years, added Benenati.
Both Meier and Benenati stressed that Julius Baer might be new to Asia, but the staff on the ground in the region have many years of experience in the region. In response to a question about how expensive private bankers are becoming in Asia, Benenati agreed that good people are demanding high compensation. But he noted that the unique value proposition of Julius Baer as a pure-play private bank with open architecture helps it to attract the right people.
Benenati did not quantify how many people Julius Baer intends to hire to meet its aggressive AUM growth targets, saying the focus is on hiring high-quality people and not on building up numbers of staff.
Ho highlighted that the bank chose to build its investment team in Asia to be able to deliver the best advice for its clients in the region. The Hong Kong bank branch allows Julius Baer to offer its clients renminbi products, said Ho, who also mentioned that Julius Baer has been encouraging clients to park some money in renminbi. The bank expects to be the second private bank to launch a renminbi fund, added Ho.
Both Benenati and Meier refuted a question about private banking in Asia being saturated. Benenati drew a comparison with Europe, saying in Europe growth in AUM comes primarily from migrating clients, while in Asia it is derived largely from new wealth generation. Meier added that many of Asia’s wealthy are first generation rich. And putting in place structures and plans to facilitate the transfer of wealth to the next generation is an opportunity for Julius Baer.