Having established partnerships in the Philippines and Thailand, Swiss private bank Lombard Odier plans to do the same in Indonesia and Malaysia, as it seeks to expand its private banking footprint in the region.
Vincent Magnenat, Asia-Pacific head of private banking, said the firm had started looking for potential partners, but declined to say which firms it might be talking to. He was speaking to AsianInvestor following the announcement yesterday of a deal with Manila-based UnionBank.
Malaysia has a high-net-worth individual (HNWI) population of 67,000 and HNWI wealth of $435 billion, while Indonesia 47,000 HNWIs with a combined wealth of $157 billion, according to Capgemini statistics published in 2015. The report did not provide figures for the Philippines.
Lombard Odier’s preference is to partner companies that want to grow their private banking business via discretionary portfolios using its risk-based investment strategy. It is not interested in tie-ups purely based on client referrals, noted Magnenat.
In its agreements with UnionBank and Thailand’s Kasikornbank, Lombard Odier provides discretionary management via global multi-asset portfolios, as well as staff training and other wealth management services.
Through its alliance with UnionBank, Lombard Odier will provide services and launch global multi-asset funds to onshore HNWIs, starting this year. The agreement is the Swiss firm's second in Southeast Asia, and it also has tie-ups in China, Japan and Korea.
UnionBank’s assets stood at Ps439 billion ($9.48 billion) as of end-June. It plans Ps1 billion in capital expenditure this year, mostly on digitalisation efforts, with the balance to be used to expand its network of 300 branches.
Lombard Odier’s global AUM, covering both its asset management and private banking arms, stood at $224 billion as of end 2015.
Jean-Louis Nakamura, Lombard Odier’s Hong Kong-based chief investment officer, said the Philippine and Thai partnerships were based on the same models, with a focus on developing a strong local onshore private bank for the Swiss firm.
Nakamura has said previously that Lombard Odier would enter onshore private banking business through partnerships. The firm does not see value in building its business from scratch in Southeast Asian markets, nor does it feel that the ‘suitcase banker’ model is sustainable in Southeast Asia.
Nakamura believes the future of private banking is onshore because of tighter regulations and compliance requirements. “We do not believe in the future of offshore banking. It will become more difficult for private bank clients, say, in Indonesia, to book elsewhere."