‘Painful’ loss for VP Bank…
StanChart targets cross-sell
Credit Suisse steps up onshore drive…
‘Painful’ loss for VP Bank
VP Bank is expanding its strategic push into new markets in
response to the changing regulatory climate, which has seen
Liechtenstein, its domestic government, relax secrecy rules and
sign a tax agreement with the US.
Adolf Real, CEO of VP Bank, which posted a CHF80.3 million
($68.7 million) loss for 2008, said recent developments on tax
havens have been largely as expected.
“With its strategy, VP Bank has taken into account the changing
circumstances,” he said. “We have redoubled our expansion efforts
into new markets and support the policy of the Liechtenstein
government with regard to international co-operation in tax
Write-downs on VP Bank’s investment portfolio and a client money
market fund totalling CHF240 million saw VP Bank fall into the red
for the year from a prior year profit of CHF157.8 million. The
bank, which described the figures as “painful”, charged CHF116.6
million of a CHF171.9 million revaluation of its investments
through its profit and loss account.
StanChart targets cross-sell opportunities
Standard Chartered’s results again proved a highlight in the
bank reporting season, generating profit before tax growth of 19
percent, following its 26 percent improvement in 2007.
Wealth management and private banking, which sit within
StanChart’s consumer bank to aid referrals, generated $2.79 billion
income in 2008, up 6.4 percent on 2007’s $2.62 billion. Within the
consumer bank, the bank said its cross-sell ratio was 1.4 products
– a number it aims to increase by tailoring products to specific
segments and focusing on pricing based on its entire relationship
with customers, rather than simply on sales.
While group-wide results were strong, $654 million of the $766
million increase came from the wholesale bank division. Wealth
management performance was still strong compared to peers, though
the division suffered a steep dip in income from products, with
unit trusts and insurance products the worst hit.
American Express Bank, the private banking and wholesale
business Standard Chartered acquired in February 2008, made a loss
of $124 million, predominantly because of a $74 million loss on
impaired collateral from private banking clients.
Credit Suisse steps up onshore drive
Credit Suisse has set up a domestic private banking business in
Mexico following similar recent launches in Japan and the
The bank has been rolling out its private banking franchise in
countries where it already has an investment banking, commercial
banking and asset management franchises.
“Our business in Mexico demonstrates our integrated global bank
model, with our divisions working together to deliver local and
international solutions and services to high-net worth private
clients in the country,” said Christian Wiesendanger, head of
Credit Suisse Private Banking Latin America.
It already has a bank and broker dealer business in the country,
Mexican Financial Group, and also has sizeable operations in Latin
America’s biggest wealth market, Brazil, where it is has BRL12.6
billion ($5.5 billion) in assets under management.
The focus will be on ultra high net worth and high net worth
individuals and families, entrepreneurs and medium and large-sized
family business owners.
Pictet grows fund unit
Pictet is expanding its asset management operations and has
hired Victor Aerni, previously a partner with Boston Consulting
Group, in the first part of its plan.
Aerni will head the bank’s Zurich-based funds business, which
over the last decade has come to account for around two thirds of
the bank’s total assets under management and custody of CHF312
billion ($263 billion). Most of the growth in its asset management
business has come from wealthy clients.
“By significantly expanding the bank’s presence in Zurich, we
will be able to give our clients easier access to the Pictet
Group’s asset management services,” said Jacques de Saussure, a
managing partner at the bank.
Pictet recently moved to larger offices in
Praille-Acacias-Vernet to allow it to operate on a larger scale. It
is recruiting additional staff members from HSBC Guyerzeller and
BMB lands $3bn Middle East mandate
BMB Group has landed a mandate to co-manage what is expected to
be the world’s biggest Islamic charitable initiative.
The International Zakat Organisation (IZO), set up in 2007, has
proposed a Global Zakat & Charity Fund which will be over $3
billion in size and will manage charitable funds to address needy
causes in the world.
BMB, which provides asset management and financial services to
ruling families, sovereign wealth funds and HNW individuals, will
co-manage the fund with IZO “on a professional asset management
IZO was set up as a structure to eradicate poverty among the
community of the Organisation of Islamic Conference, an association
of 57 Islamic states.
A way back for structured products?
An attempt to breathe life into structured products, which
became demonised after the collapse of capital protected structures
issued by Lehman Brothers and AIG, has been unveiled.
Scoach Switzerland, a structured products exchange, and the
Swiss Structured Products Association (SSPA) are offering a
collateral-secured option for the products, meaning if issuers go
bankrupt, there should be capital to repay investors.
Structured products are legally classified as bearer bonds,
meaning investors in them bear a default risk that depends on the
creditworthiness of the issuer. The system being introduced calls
for issuers of structured products to deposit liquid securities
with the exchange.
“With this innovative system of collateral security, we are
joining forces with Scoach Switzerland and the SSPA to make a major
contribution to strengthening the structured products market in
Switzerland,” said Christoph Bigger, CEO of SIX Swiss exchange.
SG Private Banking solid
SG Private Banking contributed to a rise in commission income at
Société Générale through synergies achieved between it and the
corporate and investment banking businesses
The business, which is the private banking arm of Société
Générale, posted net income of €213 million ($280 million), down
0.9 percent year-on-year. Net inflows were €4.5 billion, or 6
percent on an annualised basis.
“The quality of its product offering and operations, its
recognised expertise and the commercial dynamism of its sales teams
helped SG Private Banking achieve satisfactory performances in
2008, despite an unfavourable environment,” said a spokesman.
The private banking unit also contributed to a rise in
commission income at the wider group level, through synergies
achieved between it and the corporate and investment banking
The unit’s main achievements in 2008 included the expansion of
the network in France and through new subsidiaries in Canada, the
UK and US.