Another European headquartered wealth manager has decided to pull out of Singapore citing a lack of scale. Banque Internationale à Luxembourg SA (BIL) has announced that it will close its operations in Singapore for strategic reasons. The closure of the Singapore subsidiary is in line with BIL group’s new strategic framework called BIL2020, which was recently presented.
BIL Singapore began its operations in 1982 and currently employs 23 personnel. The bank employs some well-known names in Asian wealth management including, Reto Isenring, Hans Goeti and Beat Stamm.
In a statement overnight the bank said, “Despite the potential that Asia represents in terms of private banking markets, this decision was adopted after reviewing BIL group’s international presence in light of the new strategic framework and after completion of necessary procedures and internal communication to impacted staff.”
Hugues Delcourt, BIL’s CEO said, “After many years of activities in the country, closing our office in Singapore was a difficult but necessary business decision, as significant scale is required to sustainably operate in this region, which we do not have”, “Although it is never easy to take such decisions, the impact of its implementation is not material for the group. As we carefully reviewed our priorities and target markets, we decided to increase our Wealth Management activities in other regions where, we believe, we can be of greater relevance to our clients and to the market in general, ensuring long-term sustainable growth for the bank. We thank our team in Singapore, as well as the regulator and other participants in Singapore’s thriving financial sector, for their excellent collaboration over the past years!”, concluded BIL’s CEO.
Building critical mass has been difficult for incoming boutique sized private banks in Asia. Without a retail network, a robust distribution and intermediary network or a totally unique offering newcomers are finding the region too competitive. It is expensive and becoming more so with increasing regulatory demands and high salaries, however many are not a cultural fit with Asian clients requirements, hence the rise of the local banks such as DBS Private Bank and Bank of Singapore.
It is unlikely that BIL will be the last to call it a day.