Bank of Singapore eyes years of asset and jobs growth
The chief of the private banking arm of OCBC says the sector is all about scale, driving plans to boost the number of client-serving roles in Asia
Bank of Singapore, the private banking arm of OCBC Bank targeting fast-growing Asian billionaires, expects to see all assets under its management hitting US$80 billion by 2017 from the current level where it now stands at over US$50 billion.
How to make that happen? It means a lot of new job opportunities.
Bank of Singapore was launched as a private banking arm by OCBC, one of Singapore's Big Three banks. It acquired Dutch financial group ING's Asian private banking business in 2010 as ING tried to boost its capital at home and focus more on its core business following the 2008 global financial crisis.
Renato de Guzman, the chief executive of Bank of Singapore, said he did not expect any major acquisition after the 2010 deal with ING to boost the bank's global presence.
Instead, the bank would be keen on hiring to expand its own team of so-called "relationship managers", said De Guzman, the former chief executive of ING Asia Private Bank.
"There is a consolidation story about private banking business in Asia. You can see IT [information technology], infrastructure, talent and regulatory costs are all going up. If your asset base is not big enough and your business is not growing, it's better for you to get out.
"Private banking business is all about scale."
De Guzman said he understood some international banks including Societe Generale and Bank of America Merrill Lynch were forced to reduce or sell their private banking businesses mainly because of cost reasons.
Bank of Singapore has about 300 relationship managers whose roles are more like account managers and serve as the point persons to provide one-on-one services for the bank's super-rich individual clients.
Among the relationship managers, more than 60 were based in Singapore and Hong Kong who focused on clients in the Greater China region, De Guzman said.
The Greater China region was one of the markets for private banking business with the highest growth rate for Bank of Singapore and the demand for experienced and well-connected relationship managers there was also extremely high, he said.
In 2010, Bank of Singapore employed 213 relationship managers and the number gradually grew to nearly 300 by the end of March this year, according to company data.
When asked whether the bank might want to expand outside Asia to serve more international customers, De Guzman said he did not want to be "distracted".
"It's very difficult to go to a new area. It must be an area where you are already good at it. We don't want to be distracted. We don't want to set up something suddenly in Switzerland or Latin America," he said.
In May, Switzerland, which is known for its long tradition of completely confidential services for high-end private banking customers, decided to hand the details of foreign bank accounts to other countries, which some analysts described as a breakthrough in global efforts to crack down on tax evasion.
De Guzman said the end of Switzerland's banking secrecy made some customers rethink where they should put their money in and who would manage it. On the other hand, global customers' growing interests in diversifying their wealth, in most cases to put more assets into Asian markets, also provided a rare opportunity for Asian banks to win more customers and thereby grow their asset base.
"You need scale to do this [private banking] business and we already have - more than US$50 billion now - and that allows us to rely on organic growth for the coming years," he said.
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