Swiss private bank Lombard Odier has signed a strategic agreement with UnionBank, to launch global and diversified multi-asset funds for the Philippine bank’s high-net-worth investors.
The agreement is Lombard Odier’s second in Southeast Asia and marks the latest step in its strategy to expand its footprint in the region. The first agreement was signed in December 2014 with Thailand’s Kasikorn Bank, as reported.
The partnership with UnionBank was first reported in the local press yesterday when Joselito Banaag, senior vice president and general counsel of UnionBank, informed the Philippine Stock Exchange (PSE) it signed a cooperation agreement with Geneva-based Lombard Odier on August 16.
Jean-Louis Nakamura, Lombard Odier’s Hong Kong-based chief investment officer (CIO), confirmed to AsianInvestor this morning that “it is the same model of partnership [Lombard Odier has with Kasikorn Bank] with a focus on developing a strong local onshore private bank [for the Swiss institution].”
Nakamura has said before that Lombard Odier would enter onshore private banking business through strategic partnerships. The mid-sized private bank doesn't see the value of building its business from scratch in Southeast Asian markets or believe that the current ‘suitcase banker’ model employed by some smaller private banks to serve Southeast Asian HNWIs is sustainable.
Nakamura believes the future of private banking is onshore because of increased regulation and compliance in account opening.
“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. That's the reason we believe the future of private banking is onshore,” Nakamura said.
“Our business model is to enter into partnership with local banks that have a strong brand and networks and help them to build a true private bank. We provide the technology, investment offerings and help train their relationship managers to provide wealth management services,” he added.
UnionBank is a listed universal bank in the Philippines.
According to the Philippine Star, UnionBank posted a 30% increase in net income to Ps3.9 billion ($84.2 million) in the first half of this year from Ps3 billion in the same period last year amid the strong growth in the bank’s interest and fee-based earnings.
UnionBank’s assets stood at Ps439 billion as of end-June. It is spending P1 billion for its 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 stood at $224 billion as of end 2015.