Societe Generale's private bank pulled out of Asia three years ago. Where has the French bank been pouring its resources after exiting the world's fastest-growing wealth market? finews.asia speaks to two high-ranking executives.
Societe Generale made waves when it withdrew from private banking in Asia, selling its private banking activities in the region to Singapore's DBS in 2014.
Since then, the Paris-based bank has focused its resources on expanding its wealth management activities Europe, where it bought Kleinwort Benson in the U.K. last year – and recently concluded its integration into SGPB Hambros. If the bank can keep those assets, Hambros will manage £14 billion in assets in the U.K.
But SocGen has also quietly been strengthening its Zurich branch under former Credit Suisse banker Tobias Wagner with a raft of new hires, Wagner and Swiss private bank head Olivier Lecler told finews.asia in a joint interview.
Keep Hiring
For France's third-largest bank, Switzerland as a key part of its European map, its highest private banker told finews.ch-TV two months ago, sitting alongside home market France as well as Monaco, Belgium, Luxembourg and the U.K.
Wagner has hired 26 bankers since last June, and the bank plans to keeping going. «The idea is really to go investing probably at the same pace, there is no reason to change that,» Lecler said in an interview at the bank's Zurich offices. «This is a medium- to long-term effort, and we are ready to deliver a continuous investment in Zurich and Geneva.»
The French bank's 400-strong private banking workforce in Switzerland has set its sights on the ultra-rich – those with more than $50 million to bank – and on external asset managers.
«From a certain size of client, usually more than $20 million, you will try to diversify your holdings and Switzerland will typically be part of this strategy,» Lecler says.
Small Bank, Big Resources
To fulfil the sophisticated needs of the world's richest, SocGen wants to partner with its investment bank to jointly pitch for business. The proposal? SocGen's Swiss private bank feels like a boutique but can marshall the resources of the parent bank's 145,000 people – as well as its balance sheet.
«One banker will give you access into that entire network. That is convenient and powerful to family offices, external asset managers and ultra-high net worth individuals,» Zurich head Wagner said.
He has attracted several high-ranking bankers since joining last summer, several from Credit Suisse including private equity expert Simon Ibbitson. Last spring, Luca Vari joined from boutique JCI’s Milan branch as ultra-high net worth head.
Wanted: Investment Bankers
SocGen doesn’t disclose what portion of the overall private bank's 120 billion euros in assets in management is held in Switzerland, but says it is growing. The Swiss unit aims to hike net new money by 5 percent annually, Lecler says.
That means SocGen is looking for a particular type of banker – ideally, in the mold of Vari and Ibbitson, who have spent the bulk of his career in investment banking.
«You look for a certain profile of bankers, which is really the new world where everything is fully regularized: very entrepreunurial people who are capable of having a fairly sophisticated discussion with entrepreneurs, with family offices or financial intermediaries which is across asset classes and delivery capabilities,» Wagner says.
Referrals and Feeders
SocGen is getting to the ultra-rich sometimes through referrals from SocGen’s investment bank or through banks such as Rosbank in Russia, one of 11 independently-run retail banks in Russia, Bulgaria, the Czech Republic and elsewhere which the French bank fully owns.
Unlike the traditional model of Swiss private banking – pocket a lucrative fee for portfolio management, often on undeclared assets – SocGen’s private bank clients are typically commanding corporate and investment banking services.
«We really need people who can understand every aspect of their their banking needs, not just private banking. A pure traditional private banker will miss out 80 percent of the questions [posed by clients],» Lecler (pictured above) says.
Lending Balance Sheet
That also means that SocGen has to be willing to lend balance sheet when its wealthy clients want to snap up a real estate bargain in, say, Cap Ferrat, where the world’s most expensive private home currently for sale, Villa Les Cèdres, is listed for 350 million euros.
«It is a strong differentiating factor. We are able to finance our clients, which is not so often the case with our competitors,» Lecler says.
Lecler says Paris is committed to fostering the Swiss unit, as well as pour more resources into it. The pace is dictated, Wagner says, by how quickly he can hire new bankers in Zurich and fit them into the private bank's mindset, more than any budget limitations – a stance reminiscent of the frenetic pace of hiring for most private banks in Asia.
Ready for M&A
For Lecler, who eyes the bigger picture, the «base case» is to grow by hiring, though deals are under consideration after withdrawing from Asia.
«Of course we are also having a close look at the market, and making an acquisition is absolutely among the possibilities especially in Switzerland which is clearly viewed by the group as one of the countries we want to invest in private banking,» he says.
«If there is a good opportunity, we will be ready to participate in the consolidation of the sector.»
