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HONG KONG is the centre of the Swiss Bank Corp's private banking operations in the Far East.

    ''Our biggest private banking client base is in Hong Kong,'' said Rudolf Heer, managing director and head of the Hong Kong branch of Swiss Bank.

  ''While there are a lot of expatriates among our clients, local Hong Kong residents predominate and they have become increasingly sophisticated investors,'' he added.

    The bank started its first Asian operation by setting up a representative office in the territory nearly 30 years ago.

  Today, it has grown into a fully-fledged branch, offering a complete range of banking services and has also increased its presence in the region by setting up offices in Tokyo, Singapore and Sydney.

       It employs about 40 people in its local private banking and portfolio management operations, subscribing to the asset allocation approach for private clients.

   ''This approach is based on studies done by the research team of our economic division, at our head office in Basle, which is globally responsible for all asset allocation,'' Mr Heer said.

    The research team will study and make forecasts on each major economy.

   Blue chip companies in the major equity markets are evaluated, based on their financial strength and profitability, and included in a master list of stocks which are given to the bank's local portfolio managers.

   The bank's international investment group will also issue guidelines on a global basis to portfolio managers on the percentage of assets to be put in equity, bond, bullion and currency markets.

    ''The portfolio manager will then add his local expertise to invest clients' funds within the guidelines set by our head office,'' said Mr Heer.

  ''This ensures that only investment grade instruments are purchased and the account is not leveraged.

  ''So, in the event of a market crash, this portfolio will be well protected.''     In Hong Kong, the Swiss Bank has three major categories of clients' risk profiles for asset allocation.

    One is the yield-driven model. The emphasis is on recurring income and minimisation of capital fluctuations.

   This is the most conservative model, and the portfolio will predominantly consist of bond sand money market instruments.

   Second, is the long-term growth model. The portfolio is structured in accordance with the bank's prevailing overall investment policies.

  The portfolio will include a balanced mix of equities, straight and convertible bonds, short-term deposits and, occasionally, precious metals.

   The objective is to attain a real rate of return over a period of time.

   Third, is the aggressive growth portfolio, which normally has a much heavier exposure to equities and equity-related instruments.

  But is can also be aggressively liquid when the bank considers such a strategy to be strategically beneficial.

    Some investments in this portfolio are held for a short period. This model is the most volatile and there can be significant short-term fluctuation in capital value.

      To start an advisory account, a client has to invest a minimum of US$500,000, going up to US$1 million. Meanwhile, for a portfolio management account, the minimum investment is US$1 million.

   The bank normally assigns two account officers to coordinate clients and they usually develop a personal friendship over the course of time.

    Clients were also offered special services like the Swiss Bank's trust and corporate services at its Jersey or Bahamas' trust offices, according to Mr Heer.



HK centre for Swiss deals