BNP plans Asia wealth-man­age­ment hires as ri­vals re­treat

The Star Malaysia - StarBiz - - Features - By FABIO BENEDETTI-VALEN­TINI

BNP Paribas SA plans to sub­stan­tially in­crease the num­ber of client ad­vis­ers em­ployed by its Asian wealth-man­age­ment busi­ness, see­ing an op­por­tu­nity in the re­treat of some Euro­pean ri­vals from the re­gion.

BNP has been in­vest­ing and hir­ing in Asia for sev­eral years and in­tends to con­tinue its push, says Vin­cent Le­comte, co-head of the French bank’s wealth-man­age­ment busi­ness.

Asked about the po­ten­tial for ac­qui­si­tions, he says the bank’s pri­or­ity is to grow on its own. “The best way for us to grow is to at­tract new clients as well as new teams,” Le­comte says in an in­ter­view in Paris.

He says the bank in­tends to add a few dozen re­la­tion­ship man­agers by 2020 in Asia to ad­vise clients on in­vest­ments. It cur­rently em­ploys 270, mainly in Hong Kong and Sin­ga­pore but also in Tai­wan and In­dia.

BNP’s ex­pan­sion il­lus­trates the con­trast­ing for­tunes of some Euro­pean play­ers in the re­gion. So­ci­ete Gen­erale SA and ABN Amro Group NV, which had smaller lo­cal wealth-man­age­ment ac­tiv­i­ties, have pulled out, leav­ing the field to big­ger play­ers that can af­ford to in­vest in skilled per­son­nel and cover the added com­pli­ance costs that come with such an ex­pan­sion.

Or­ganic growth

Many pri­vate banks are find­ing it hard to make enough profit in Asia, cre­at­ing op­por­tu­ni­ties for their ri­vals, Le­comte says.

Hir­ing re­la­tion­ship man­agers from other firms is one way to cap­ture as­sets in a re­gion pro­duc­ing ev­er­more bil­lion­aires, be­cause they bring their clients with them when they change em­ploy­ers.

Deutsche Bank AG plans to add about 50 po­si­tions, in­clud­ing client ad­vis­ers, in the sec­ond half of 2017, Lok Yim, head of Asian wealth man­age­ment, said in June.

Oth­ers are us­ing a com­bi­na­tion of ac­qui­si­tions and re­cruit­ing. Credit Agri­cole SA this year pur­chased Credit In­dus­triel et Com­mer­cial’s wealth man­age­ment units in Hong Kong and Sin­ga­pore to reach US$14bil in client as­sets in Asia. It is also plan­ning to hire 15 to 20 bankers an­nu­ally in com­ing years.

BNP in­creased its Asian pri­vate-bank­ing as­sets 15% a year on av­er­age be­tween 2012 and 2016, more than twice as fast as growth across the in­dus­try, ac­cord­ing to the Asian Pri­vate Banker, which tracks the big­gest wealth man­agers in Asia ex­clud­ing main­land China.

BNP, which aims to get into the top five in Asian pri­vate bank­ing, comes eighth in a rank­ing led by UBS Group AG, Asian Pri­vate Banker’s data shows.

Growth tar­gets

While Le­comte de­clined to give spe­cific growth tar­gets, BNP’s pri­vate bank is shoot€ ing for more than 400bil (US$474bil) un­der man­age­ment glob­ally by 2020, com­pared € with 355bil at the end of June. Asia al­ready ac­counts for about 20% of those as­sets.

His­tor­i­cally Asian clients have pre­ferred to se­lect their in­vest­ments them­selves, but that is start­ing to change, Le­comte says. BNP is see­ing more de­mand from the re­gion for dis­cre­tionary-port­fo­lio ser­vices that have “solid dou­ble-digit growth,” he says.

The French bank, which has wealth-man­age­ment of­fices in 20 coun­tries, is also look­ing to ex­pand in other re­gions, in­clud­ing Euro­pean mar­kets like Switzer­land and Ger­many.

Asian en­trepreneurs are search­ing op­por­tu­ni­ties in France and Ger­many to di­ver­sify their com­mer­cial real-es­tate in­vest­ments now that the out­look for the eu­ro­zone has im­proved.

BNP’s wealth and as­set man­age­ment ac­tiv€ ities gen­er­ated a pre-tax profit of 226mil in the sec­ond quar­ter, up 25% from a year ear­lier, ac­cord­ing to the bank’s fil­ings. The bank doesn’t pro­vide a break­down by re­gion.

“We have made the choice many years ago to fo­cus on a lim­ited num­ber of mar­kets, be­cause we think that we need to be dis­ci­plined to max­imise our ex­per­tise,” Le­comte says. — Bloomberg

Growth po­ten­tial: A cus­tomer uses an au­to­mated teller ma­chine out­side a BNP Paribas bank branch in Paris.The bank in­tends to add a few dozen re­la­tion­ship man­agers by 2020 in Asia to ad­vise clients on in­vest­ments. — Bloomberg

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