In the midst of Singapore’s rise as the undisputed private banking hub of Asia, Isaac Stewart speaks to Reto Isenring, Managing Director of VP Bank, Singapore.
Q. What is VP Bank and how do its private banking services differ from the services offered by competitors like BNP Paribas, Deutsche Bank, Credit Suisse and to a lesser extent Banque de Depots et de Gestion?
VP Bank is a true boutique private bank; we are client-centric and provide wealth management and family office services for ultra high net worth clients.
We take the time to comprehend theirs needs and then tailor solutions to suit those needs. With the growing wealth in Asia, we realise the increasing demand for our specialised, and personalised client-centric services.
Q. What difficulties does VP Bank face in terms of penetrating an already competitive private banking market in Singapore and Hong Kong? How do you plan to tackle your lack of brand recognition in these markets?
VP Bank is not a brand that is well known in Asia yet. However, this actually works to our advantage. From talking to clients, we realise that with private banking clients who enjoy confidentiality, they prefer to deal with a bank which is discreet, which is not always on the first page in the newspaper - a bank that proves that it takes confidentiality seriously. Or what I would like to call it: A VP Bank – a very private bank.
However, we also need to build reputation and brand recognition, and to show that we are a serious player in the market.
This branding exercise is currently in progress, and a number of our competitors have shown and proven that you can come to the market without a brand and become properly established when you have the right market strategy.
In the short term, we have relationship managers who are actively promoting our bank and our services. In the mid-term, we have our campaigns, and we are convinced that our careful strategy will pay off in the long run.
We are always open to opportunities but we are not impulsive, we are prudent. With our customers in mind, our strategy is not to just rush into a market and spend millions of dollars.
Before we move, we think twice. At this moment, we’re focusing on our youngest child, VP Bank Singapore.
Q. VP Bank manages CHF 41.9 billion in assets under management for clients from 60 different countries. Some say a new office in Singapore doesn’t necessarily mean VP Bank will make it in Asia. But, what do you think?
We are trying to attract senior relationship managers who are looking for a niche player, with a wide product offering, a good booking and trading platform. We give our relationship managers the entrepreneurial freedom to carve out their own marketing strategy.
Basically, we’re trying to attract senior relationship managers who really want to focus on the client and have less bureaucracy in terms of administration. With our presence in the heart of Asia, we will be better positioned to penetrate the rapidly expanding Asian market with relationship managers who have intimate localised knowledge of the social climate and clients.
Q. Agence France-Presse said that Liechtenstein-based banks have been engaged in facilitating tax evasion for individuals in Europe, in particular Germany, what do you have to say about this? Was VP Bank one of them?
We were never involved in any customer investigation or whatsoever vis-à-vis the European Union.
Q. VP Bank shares fell dramatically in Q108 from February to March, what happened?
This was the market’s reaction to the recent pressure in Liechtenstein due to the tax affair with Germany. This is purely a market effect which a publicly listed company must bear.
Q. Why did the trading volume of VP Bank decrease to fewer than $20,000 in the period from April to June 2008?
I guess that was an investment decision. If you are a shareholder and you missed the opportunity to sell your shares before the share price dropped, you hang on to the shares waiting for price appreciation.
On the other hand, if you are a potential investor you wait and see if the market has bottomed out.
Q. As a minor international private-banking franchise, how will VP Bank survive the massive operational risks that could cut into the bank’s franchise? How will you maintain profitability levels despite the considerable investment needs to improve its modest market position?
Well, the most important point to note is that we are not in investment banking; we do not have exposure to the investment banking risks like other banks. On top of that, we are very conservative.
We have very prudent risk management systems in place in order to protect ourselves from the operational risks mentioned. We are working very closely with our head office as well; where we obviously have huge know-how in terms of managing these operational risks.
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