Singapore was at the heart of the EFG-BSI deal that has been instrumental for boosting the former’s operations, client base and staff count in the region, according to EFG Asia CEO Albert Chiu, and Singapore and Southeast Asia CEO Kong Eng Huat.
Since finalizing the integration, the acquisition has grown EFG’s assets under management (AUM) unit in Asia to CHF 21.3 billion and strengthened its market coverage and research capabilities.
‘Within Asia, Singapore benefited hugely from this transaction as BSI’s regional headquarter was in Singapore, our operations doubled the number of staff, client accounts and business volumes since integration,’ Chiu told Citywire Asia.
While the Singapore integration was completed by November 2016, the Hong Kong integration was finalized by March 2017. EFG brought over most of BSI employees in the Singapore unit and a smaller number in Hong Kong. In terms of markets, Chiu said the deal is hugely complementary as EFG looks to grow its Asian business.
The acquisition is also helping EFG broaden its client coverage in the major Southeast Asian markets – Indonesia, Malaysia, Thailand and the global South Asia market – as well as expanding its external asset manager business in the region.
'In Asia, BSI was very strong in the Indonesian market and the NRI client segment, while EFG was stronger in North Asia. Hence the client base is very complementary and there are very few client overlaps,' Chiu added.
The private banking industry in Singapore, for example, services billions of offshore wealth from Indonesia, of which some $6.5 billion was repatriated following the tax amnesty programme launched by the Indonesian government last year. In the age of low interest rates abroad, Indonesian entrepreneurs have been raising cash through foreign currency loans to fund their local enterprises.
As private banks continue to tap the wealth, tax reporting and transparency have become a key factor following the amnesty programme. It is becoming even more significant with the global adoption of OECD’s Common Reporting Standards.
'With the Common Reporting Standards being implemented, clients are reviewing their trust and wealth planning structures and vehicles to meet the new standards, and that’s where our wealth solutions group comes in -- to review the trust structures and to make changes based on the new regulatory environment,’ said Kong.
EFG has a trust company licence in Singapore. While Hong Kong has traditionally been home to North Asia’s offshore wealth, the Singapore booking centre has an active North Asian clientele. As China’s wealth booms, EFG expects more capital to come to the city-state.
Increased staff count
Since EFG’s billion dollar acquisition of BSI, the former not only boosted its offerings to clients in the region, but also expanded its research unit with more investment counsellors and research analysts.
'We now have the critical mass to look at things that we would normally not have been able to do, such as single stock financing,’ said Chiu.
‘Before the acquisition, we didn’t have an extensive investment team to cover Indonesian and South East Asian securities but with the integration, we now have a much larger investment team to look after these securities,’ added Kong.
‘One noticeable advantage of this acquisition is that it has raised the profile of EFG and confirmed the bank’s commitment for growth. We put together two banks of almost the same size and even if this was challenging, we delivered,’ said Chiu, noting that EFG’s ambitions for growth in Asia is attracting high quality private bankers.
The Swiss private bank has hired more than 10 relationship managers in Singapore and has a pipeline of announcements the following weeks. With booking centres in Hong Kong and Singapore, and representative offices in Jakarta, Taipei and Shanghai, EFG’s target client base is high net worth individuals with over $10 million in investable assets.
'It is not abnormal for any client to have two or three private banking relationships. Our aim is to deliver hands-on solutions for long-lasting, successful relationships for our clients. We want to be their core private bank,’ said Chiu.