US clientele central to Vontobel’s future

Zeno Staub, the dry-humoured, football-loving Swiss, who has recently taken the helm of Zurich’s Bank Vontobel, has no illusions about the status of his institution amongst the typical private client’s solution set.

“We are a boutique bank, which very often appears in the overall solution of a client,” says Mr Staub, who oversees an asset base of SFr130bn (€106bn) in customer funds and institutional investments handled by 1400 staff. “We are typically the second or third specialist a client uses, never the first.”

Those private banks with the ability to succeed in the wealth market need to differentiate themselves from the competition, says Mr Staub, who has previously worked in the bank’s asset management and capital market arms.

“What are we good at? Running diversified assets for people who want to store part of their wealth in a different jurisdiction,” he says. “The US is a very attractive area for this type of private banking.”

This decision to remain active in North America, where Vontobel derives 25 per cent of its brokerage earnings and runs SFr7bn for US institutional clients, was made after much soul-searching, against a background of larger Swiss players pulling out of the US due to regulatory and taxation factors, often magnified in aggressive attacks on Switzerland by US authorities.

“When regulatory complexity was raised for US private clients, we decided we already had a lot of these competencies and we wanted to keep them.” These clients – currently holding more than $1bn (E700m) with Vontobel, with assets expected to increase by more than 30 per cent this year – are faced with particular challenges in portfolio management, he believes. “Clients need to diversify their wealth internationally away from their core US dollar region,” says Mr Staub.

This forms part of the strategy of boosting the group’s SFr130bn in managed assets, much of it in structured products, by 30 per cent over three years, with the private banking business expected to grow much faster than the fund and investment banking arms.

This growth can only really come through attracting new clients, through word of mouth recommendation, believes Mr Staub, wary of attracting any questionable clientele. “We talk to the other Swiss banks, who are in the process of giving up US business,” he adds.

Vontobel is also conscious of the need to internationalise its business, with SFr90bn of total assets currently overseen for Swiss clients, demonstrating the overwhelmingly domestic Swiss nature of its client base. “This will be an advantage and challenge at the same time,” admits Mr Staub. “Some of our competitors underestimate the need for a strong home market. If you are proven at home, it helps you to go global,” he says, with new acquisitions expected to be in the home market.

The current plan is to add SF20bn of new private banking assets within three years in order to achieve the short-term SFr50bn target.

But there are also some strong arguments against increasing scale and consolidation. “All clients sooner or later want to meet the portfolio manager and then you see a very simple time constraint,” he says.

“Yes, private banks will see consolidation in Switzerland, as the rules of the game have changed. But we will also see success generated by specialised boutiques.”

Zeno Staub, Vontobel