Indosuez aims for 8-10% AUM growth in Asia

Singapore

INDOSUEZ Wealth Management, the private banking arm of France's second-largest bank Credit Agricole, hopes to grow its assets under management (AUM) in Asia at a clip of between 8 and 10 per cent this year, said its top executives in an interview with The Business Times.

This growth would have the bank work off a total AUM base of US$14.2 billion in Asia, following the fresh acquisition of private-banking assets from Credit Industriel et Commercial (CIC) in Singapore and Hong Kong.

Indosuez Wealth Management is small in Asia, and amid the stiff competition in this region, the private bank's proposed 8 to 10 per cent AUM expansion would keep its growth in line with the market.

The bank is also aiming to keep their cost-to-income ratio this year at under 80 per cent, similar to 2017.

Indosuez Wealth Management would not give specific retention rates for both the assets and bankers from the acquisition, but said that the integration has been smooth.

Pierre Masclet, Indosuez Wealth Management Asia chief executive officer, said the "common DNA" shared with CIC ensured that the merged entity continued to serve the same type of clients, and cover the same geographies.

Following the acquisition in Asia, Indosuez currently has about 400 people in the region, with Singapore and Hong Kong as its two booking centres for the region.

The bank had earlier expanded into Monaco through a client referral agreement with HSBC in 2016, and in late 2017, moved to acquire Banca Leonardo, a wealth manager in Italy.

Indosuez Wealth Management expects part of the growth this year to come from rising interest in alternative investments such as private equity (PE).

Paul de Leusse, Indosuez Wealth Management chief executive, said that the low-rate environment still prompts clients, who are comfortable with the lack of liquidity in the PE segment, to suss out deals in this area.

"It's a sector that brings one of the best yields. For our clients who are mainly entrepreneurs, they don't just like to have financial assets. They like to have a story about their investments," he said.

Mr de Leusse added that many small players will exit wealth management in the next five years or so, noting that the ones who remain will have to invest and ensure that the assets are "100 per cent compliant".

As it is, Indosuez Wealth Management in 2010 went through a global exercise to identify clients that are not tax compliant. That year, it exited so-dubbed tax havens and other non-cooperative countries where Indosuez was once present.

In 2013, it further launched a tax certification process that was completed for its European Union clients by the end of 2014. That reduced the private bank's AUMs by five billion euros (S$8.12 billion), though the bank said its reduction in AUMs in non-strategic markets has since been "largely compensated" by strong growth in key strategic markets.