Private banking could see quieter times ahead but challenges remain, says Laurent Gagnebin, CEO of Swiss-based Rothschild & Co Bank. In an interview with finews.asia, he maintains new teams, some from Credit Suisse, should help growth this year.
Laurent Gagnebin, Rothschild & Co Bank achieved a good performance last year. Besides the pivot in interest rates and UBS's rescue of Credit Suisse, what were the other factors that led to your very positive results?
The result is due to the investments we have made in recent years. That includes the acquisition of Banque Pâris Bertrand, which we have since fully integrated, and a continual expansion of our advisory capacities in Geneva and Zurich, as well as the first signs of success in our new retirement planning offering.
Besides Switzerland, Germany, Spain, and Israel also made strong contributions.
Can you tell us a bit more about what happened in the Swiss market?
I can't give you detailed numbers. What I can say is that we are doing well in Switzerland and have two equally strong locations in Geneva and Zurich.
«It is – certaintly and fundamentally – not positive»
We expanded our retirement planning services capabilities in Zurich last year. We also hired a Swiss onshore team as well as a Central and Eastern European (CEE) one. Beyond that, we employed new client advisors for several other teams. In total, the number of employees in Switzerland was up by 13 percent.
What does the loss of Credit Suisse mean for Swiss finance?
It is – certainly and fundamentally – not positive. The largest gap it creates is in the segment for small- and medium-sized enterprises (SMEs). But with that, I am also assuming that others will jump in and take advantage of the situation and competitive forces will start to play a role. Everything considered, I don't expect it to hurt Swiss finance.
Has Bank Rothschild & Co profited from the situation or had to manage around it?
It is hard to quantify. To a certain degree, I think we probably profited from the significant uncertainty that Credit Suisse's difficulties have caused for a long time now. The increased frequency of Credit Suisse client advisors scoping out the market was naturally visible.
We received many job applications in spring 2023. But we didn't change our strategy and we only hired very selectively. Most of our new employees didn't come from Credit Suisse as a result.
Are you still looking for new staff in Switzerland and, if so, what kind of profile do they need to have?
Yes, we want to continue to grow and we will hire additional client advisors in 2024. But they have to be a good fit and share the values of Rothschild & Co. We take a long view of things and that is also how we advise clients.
«We look for advisors with extraodinary investment know-how»
It is always about the best investment solution for clients and never about short-term returns. We look for advisors with extraordinary know-how and strong personalities who can meet clients at eye level and provide them with comprehensive advice. You need to have entrepreneurial flair and a broad spectrum of interests for that.
This has been a very turbulent decade for private banking. Do you think quieter times are ahead and that the segment will become boring again? Wouldn't that be a good thing?
I think that most Swiss banks have done their homework by now and we can assume that there will be quieter times ahead.
Still, international competition has intensified. Geopolitical issues are creating uncertainty and regulatory pressures, particularly in Europe, could remain intense. It will remain challenging in any case.
Rothschild & Co. also lends money. What do you do to make sure you don't go through the same debacle that one of your large competitors in Zurich faces?
We don't offer private debt solutions as we see these as being too risky.
How do you avoid the interest of conflicts of clients with private assets who also have business interests with you?
We see the close cooperation between our global advisory and wealth and asset management teams as one of Rothschild & Co.'s great strengths.
«We have also been present in Israel for about the last one and a half years»
The risk of having any conflicts of interest is limited compared with others. We focus on advisory services and do not finance any of the planned transactions ourselves.
How and why did you expand overseas last year?
Our strategy involves focusing on a few selective markets where we have a strong onshore presence. We have been active in Germany for a long time and we grow continually there.
That is why we opened a branch in Hamburg besides our current locations in Frankfurt and Dusseldorf. We have had an onshore presence in Spain for two years now and have already increased the number of employees there from 8 to 15.
The stability of the group, the family's commitment, and our long-term investment approach have been well received there. We have also been present in Israel for about the last one and a half years, and we are already registering pleasing asset inflows there.
What strategy are you pursuing in the Middle East (Dubai, Saudi Arabia, Qatar, etc.), a region that is attracting many banks and wealth managers?
Our global advisory business has been active in the region for a long time. In wealth and asset management, we don't yet have a presence there.
«We want to expand our retirement services offering in Switzerland»
They are, however, interesting markets and we could see our offering being well received there by wealthy families and entrepreneurs.
What are your priorities this year?
We will continue to go down our set path and grow further. We will hire further client advisors in all markets, but very selectively.
We want to expand our retirement services offering in Switzerland and invest in technology that simplifies processes and improves client service further.
Are you still satisfied with your role?
I feel very comfortable in the Rothschild & Co. group. I share the values of the families and partners and am part of an ambitious management team. I also see that I can have a deep impact.
At the end of the day, the group's step to go private was exciting and one that promised a great deal of further growth.
What motivates you to get up and to work every day at the bank?
The people. On the one hand, you have motivated employees. On the other, highly interesting encounters with clients.
«That is how we grow to trust each other»
It is a privilege to be in contact with so many interesting people. I learn something from them every day and have the feeling that I am also able to give them something. That is how we grow to trust each other.
Your father, Georges Gagnebin, was also a long-tenured, banking devotee. What have you learned from him? What was his best piece of advice?
He always said: «Always put a client's interest first, think long-term, and create a stable environment for all stakeholders.»
Laurent Gagnebin joined Rothschild Wealth Management Equitas in autumn 2011, the Geneva pillar of Zurich's Rothschild & Co Bank. Before that, he headed Investec Bank. His first job in banking was at Goldman Sachs, also based in Geneva. He graduated from the École hôtelière de Lausanne and served in the hotel industry for many years. He has led Rothschild Bank in Switzerland since the middle of 2016.
