Lombard Odier enters Thai wealth market

The Swiss private bank signs a partnership deal with Kasikornbank to gain access to its high-net-worth clients and to receive referrals. Its Asia-Pacific chief spells out the rationale.
Lombard Odier enters Thai wealth market

Swiss private bank Lombard Odier is entering the Thai wealth management market through a partnership with Kasikornbank, one of Thailand’s largest financial institutions.

The partnership deal signed by Lombard Odier yesterday covers provision of asset management and custodian services to Kasikornbank’s private clients, as well as receiving client referrals from the Thai bank.

Vincent Magnenat, head of private banking for Asia Pacific at Lombard Odier, told AsianInvestor the firm would focus on managing the global investments of Kasikornbank’s high-net-worth clients on a discretionary basis for an undisclosed fee. The clients need to have minimum investable assets of $1 million. Magnenat will use its booking centre in Singapore for the offshore custodian service.

While Kasikornbank will refer high-net-worth clients to Lombard Odier, the latter will offer advisory training to the Thai bank’s relationship managers and investment advisers.

Overall, the partnership will see Lombard Odier opening up its global platform and research capability to Kasikornbank’s private clients.

Magnenat said the partnership with Kasikornbank would allow it to enter the market in a significant way. Kasikornbank has 8,700 wealthy clients, representing 40% of the Thai high-net worth market, which has a total AUM of 700 billion baht ($21.34 billion).

More than 80% of the bank's customers are in Bangkok. Of the total, 70% have expressed interest in investing in a greater number of diversified investment products, according to Kasikornbank.

In a statement, Kasikornbank's chairman, Banthoon Lamsam, said the partnership would advance the standards of its private banking service, noting Lombard Odier’s consultancy in family business succession and single family-office financial management aligned with its own business focus. 

Magnenat stressed that its partnership with Kasikornbank was not exclusive, but he note that it was its first for Southeast Asia and part of its growth strategy for the region.

He said Lombard Odier chose Thailand for the partnership deal as the people had grown richer. The Thai population’s wealth has risen 12.7% per annum over the past five years, higher than the Asian average of 9.5%.

In addition to organic growth, he said the way to go to increase its business in the region was via strategic partnerships, hence he is not discounting possible partnerships in Malaysia, Indonesia or other markets with appropriate firms.

“We will consider other partnerships, but for now we will concentrate our efforts on the existing partnerships we have,” Magnenat said.

Since 2012, Lombard Odier has forged partnership agreements in Korea with Kookmin Bank and in Australia with JBWere. Magnenat declined to divulge further details of the agreements.

The Swiss bank has $238 billion in assets under management globally, of which $8 billion is sourced from Asia. Globally, nearly half of Lombard Odier's private clients have discretionary accounts with the bank, while the worldwide industry average is around 20%. In Asia, where the industry average for discretionary accounts is 5-10%, close to 50% of Lombard Odier's clients have such accounts.

It has offices in Hong Kong, Singapore and Japan.

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