Switzerland’s EFG International hasn’t so far been a strong player in Asian private banking. Following the integration of BSI, this is about to change and the company is making an extra effort to improve its chances of success.
The acquisition of BSI has propelled EFG International forward: The Zurich-based private bank now manages some $22 billion in Asia, compared with $15 billion before the integration of BSI.
With the increase in assets under management and the higher utilization rate, EFG’s Asian business has also become more profitable. Kong Eng Huat (pictured), EFG’s CEO for Singapore and Southeast Asia, is brimming with confidence and told «Hubbis» in an interview: «We definitively want to grow aggressively.» EFG for a long time wanted to expand its business in Asia but organic growth had been slow to come about, he said. «The acquisition was a great move because we achieved scale, which allows us to spend more on other areas, such as platform,» he added. Kong has been with the bank since 2012.
The former Merrill Lynch executive has prepared the ground for a further expansion. In December, he appointed ABN Amro’s Lee Chang Tze as deputy CEO and head of private banking. In Oliver Balmelli, EFG already had a manager holding those positions, and thus the bank now has co-heads.
Broad Management Base
EFG International in other words has three private-banking executives in Southeast Asia, which makes sense, according to Kong. «We want to grow significantly and you can’t do that if one person has 60 bankers reporting to them,» he said. Co-heads can share the burden.
Both executives will work on recruiting relationship managers, manage the personnel and make sure that the productivity of the teams is increasing.
Increasing Profitability
The relationship managers are required not only to attract new assets, but to also increase profitability with already existing money. Kong will make sure that EFG moves from the transactions-based business to advisory and discretionary mandates.
Kong is convinced that the staff of BSI will benefit from the takeover as well: «The positive thing is that [BSI] has now closed one chapter and opened a new one. Now that they are part of a bigger bank and they can start to focus on doing business instead of worrying about all the issues of the past.»
Tough Times for BSI in Asia
BSI has had a tough time in Asia. To begin with, the transaction negotiations dragged out, weighing on business and then the scandal surrounding 1MDB broke. Singapore’s financial market authority MAS withdrew the bank’s license on grounds of money-laundering charges in relation to the state fund of Malaysia.
The hiring of more relationship managers will help the bank grow further, according to Kong. EFG has already added a dozen new bankers to its fold in Singapore this year. They appreciated the Swiss way of banking, he added: «We treat them like business partners rather than employees.»
