Vincent Taupin, the new head of private bank Edmond de Rothschild seems not overly enthusiastic about the prospects of his industry. And yet he claims not to be a masochist.
Despite the difficulties that Swiss private bankers faced in recent years, what kept them going was a belief that growth would eventually pay off. As long as private banks were able to acquire new assets, their hope was that the squeeze in margin would be offset by higher volume.
But this was no longer the case, says Vincent Taupin, head of Geneva’s Edmond de Rothschild private bank. «It is useless to raise money at stupid prices,» he told the «Financial Times» (behind paywall). It made no sense to collect assets if the bank only made 2 basis points on this money.
Poaching Has Devastating Effect
Taupin, who previously acted as head of the fund business, would prefer to raise prices for the bank's services but is forced to offer concessions to his clients instead. «We do negotiate. But only down to a certain level,» he said.
Taupin, 60, is wary of acquisitions, despite having access to a war chest of as much as 1.5 billion Swiss francs ($1.5 billion). He believes it is extremely difficult to estimate whether the client relationship is profound enough to survive the change of hands.
As soon as a potential merger grabs the headlines, employees are approached by rival firms and offered a job with more money and a higher bonus. The effect of this was devastating for the buyer of a firm, because a takeover of a bank was of no use whatsoever if nobody was left working there, the Frenchman said.
Delisting Reduces Transparency
Edmond de Rothschild in spring announced it would cancel its listing on the Swiss exchange after a thorough reorganization of its business. The bank managed about 128 billion francs in assets at the end of 2018. Pulling its listing obviously means that less will be known about the key figures, reducing transparency.
