Boost for SA as sec­ond Swiss bank plans lo­cal of­fice

Business Day - - FRONT PAGE - War­ren Thomp­son Fi­nan­cial Ser­vices Writer thomp­sonw@busi­

Bank Julius Baer, one of Switzer­land’s old­est and largest bank­ing in­sti­tu­tions, has be­come the sec­ond Swiss pri­vate bank in as many weeks to an­nounce its plans for op­er­a­tions in SA.

The 128-year-old pri­vate bank, which is listed in Switzer­land and man­ages more than $400bn for its clients, of­fi­cially launched its SA of­fice on Wed­nes­day. It joins the 222year-old Lom­bard Odier, which two weeks ago said it had been li­censed to pro­vide ad­vi­sory ser­vices in SA and would be tar­get­ing high net-worth in­di­vid­u­als who want to diver­sify their port­fo­lios off­shore.

The Swiss banks’ en­try of­fers a vote of con­fi­dence in Pres­i­dent Cyril Ramaphosa’s ad­min­is­tra­tion, which has fo­cused on clean­ing up cor­rup­tion and turn­ing around loss-mak­ing state-owned en­ter­prises.

De­spite an ini­tial rise in busi­ness and con­sumer con­fi­dence fol­low­ing his elec­tion, the coun­try slipped into re­ces­sion in the sec­ond quar­ter for the first time since 2009.

“We be­lieve there will be a turn­around in the cur­rent eco­nomic sit­u­a­tion. There is a lot of eco­nomic hope that Ramaphosa has given to the peo­ple. We think if you want to be pi­o­neer­ing, then you have to be one of the ear­li­est to es­tab­lish a pres­ence, even if it is not im­me­di­ately at­trac­tive to do so,” said Daniel Savary, deputy global head of emerg­ing mar­kets at Julius Baer.

Raoul Korn, an ex­ec­u­tive di­rec­tor at Julius Baer, said the bank had a long-term strat­egy to grow its busi­ness in SA. “When we com­mit to a mar­ket we do so for the long term, and that means go­ing against the grain some­times,” he said.

High net-worth in­di­vid­u­als who choose to use the bank’s ser­vices be­come clients of Bank Julius Baer in Switzer­land, which is where their port­fo­lios are ad­min­is­tered from. But ad­vice is co-or­di­nated through on-the-ground re­la­tion­ship man­agers who utilise the bank’s var­i­ous spe­cial­ists.

Julius Baer’s launch in SA came as Reuters re­ported that Credit Suisse, Switzer­land’s sec­ond-largest bank, had pulled out of SA as part of a global re­struc­tur­ing, which has seen it scale back its in­vest­ment bank­ing of­fer­ing to fo­cus on wealth man­age­ment. Deutsche Bank also with­drew a num­ber of its ser­vices from the lo­cal mar­ket ear­lier in 2018, but is main­tain­ing a phys­i­cal pres­ence of­fer­ing debt cap­i­tal mar­kets, fixed in­come and trea­sury ser­vices.

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