Swiss-based private bank Pictet aims to boost its income from trading. Yet it won't happen the way suggested by Boris Collardi, according to information obtained by finews.asia.

Pictet, the venerable private bank of 215 years, wasn't going to announce the launch of its multi-issuer-platform for structured products when it went live at the beginning of August.

And that was despite the relevance of the step for the bank: The platform is the first active contribution by the bank in the business with structured products. And, significantly, this new business will likely generate an increase in revenue. A spokesman for the bank confirmed the launch of the platform and added that a number of renowned, global issuers were part of the deal when contacted by finews.asia.

Structured Products, Providers of Revenue

And yet, Pictet has been too late for the big deal this year. Rivals including Julius Baer, Zuercher Kantonalbank (ZKB) and Credit Suisse were out first for the big deals that were available during the turbulent weeks after the emergence of Covid-19.

Their revenues surged in the first half as a consequence. Julius Baer didn't shy away from owning up to the main source of income: trading in structured products and derivatives. The two other, Credit Suisse and ZKB, are considered major players in the business with structured products and that paid off.

Pictet has done well too and managed an increase in its revenues by 6 percent in the first–corona–half. But it was the trading income that helped boost revenue as was the case with Julius Baer and ZKB.

What's Holding Pictet Back?

There is an element amiss in the structured market that will prevent the business from taking off: Pictet doesn't issue structured products. The spokesperson confirmed that the bank will continue providing a platform only for third-parties.

And that's pretty much a significant defeat for Boris Collardi. The former Julius Baer-banker had put forward a plan to boost revenue by launching structured products shortly after taking up his new role as a partner at Pictet in the spring of 2018, according to usually well-informed sources who spoke to finews.com.

Collardi, 46, was an avid proponent of the structured products business during his nine years at the helm of Julius Baer. Structured products returned the most handsome profits for years. Philipp Rickenbacher, who ran the business from 2009 through 2016, today is chief executive officer at the Zurich-based bank.

Structured Products Expert on Board

Over at Pictet, Collardi's plan seemed to fall on fertile ground. In November 2018, Valentin Vonder Muehll joined the Geneva-based company as their new global head of derivatives trading. He also moved from Julius Baer to the Geneva rivals, having been the head of trading with structured products in Zurich. Vonder Muehll is one of Switzerland's most prolific experts in structured products available in Switzerland, having been active in developing and selling such products since 1994.

Collardi had poached Vonder Muehll to build a similar office at Pictet, the sources told finews.com. But the plan didn't go according to the wishes of its promoters. The original intention was to enable Pictet to design, produce and issue derivatives, but partners at Pictet weren't fully convinced Vonder Muehll decided to cancel the bid in spring and left the bank subsequently.

«Sell Side» Is More Lucrative

The reason behind this failure was that Collardi hadn't been able to convince the partners. And the rule is at Pictet, that decisions of this scope have to be taken unanimously.

The tug-of-war ended with the partners agreeing to a compromise: Pictet undertook to design and launch a platform for third-party users yet refrains from becoming an active participant. Thus it remained a buy-side player and refrained from joining the fray as a seller, the business that is substantially more lucrative.

Vonder Muehll didn't comment on this information and Pictet didn't comment on his departure and Collardi's role in developing th business with structured products.

Putting Down a Marker

The events show how Collardi and his partners on the steering committee tend to disagree in some respects. While Collardi helped Julius Baer boost its profit with a keen understanding of the business and while he didn't meet major opposition from executive or board, Pictet is so much different from the Zurich bank.

While he was made a partner to improve the wealth management portfolio, partners have taken the line to show him what is off-limits to him. It is Bertrand Demole who signs off on the trading front. Demole has been with the bank for the best part of 20 years and represents an important part of the family owners.

The position of Collardi wasn't helped by the announcement of Finma, the regulator, that it considers expanding its investigations into the anti-money-laundering efforts at Julius Baer to include top managers in person.