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UBP gets wholesale bank licence in Singapore

Upgrade from its merchant banking licence is expected to boost its asset inflows and expansion

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UBP chief executive for private banking Michel Longhini says that UBP continues to be on the lookout for opportunities to grow through acquisition.

Singapore

UNION Bancaire Privee (UBP) has been granted a wholesale bank licence to operate in Singapore, which is expected to boost asset inflows.

A wholesale bank licence allows the bank to offer Singapore dollar services including deposits and loans, and to provide a wider set of investment solutions to Singapore clients.

UBP, which now operates under a merchant banking licence, expects to begin operations as a wholesale bank from April 1.

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The bank's chief executive officer Guy de Picciotto said: "The upgraded licence underlines our commitment to Singapore, the region and our clients.

"We see great potential in Asia ... and are excited to have the opportunity now to provide an even wider set of bespoke solutions that will better meet the needs of our clients."

The bank's chief executive for private banking Michel Longhini told The Business Times that UBP continues to be on the lookout for opportunities to grow through acquisition.

Last year, the bank acquired Banque Carnegie Luxembourg and the London-based ACPI Investments Ltd, an investment management firm.

"There will still be consolidation in the industry. We focus on quality, so due diligence is very important. We want something that does not deteriorate in quality."

He noted that the financial landscape has changed over the past decade, particularly in terms of tax transparency and regulation.

"There is more transparency and protection of investors, but this has also increased the cost base. There is far more pressure on smaller players and lots of consolidation. But we are a consolidator. We have made six acquisitions over the past nine years."

UBP has reported inflows for the full year 2018 despite a more challenging climate in the second half. Net asset inflows totalled 7.3 billion Swiss francs (S$9.87 billion) at the end of last year, of which 4.7 billion Swiss francs was net new money; 2.6 billion Swiss francs was from the acquisition of ACPI completed at year-end.

The group has total assets under management (AUM) of 126.8 billion Swiss francs, up by 1.2 per cent from 125.3 billion at end-2017.

Net profit fell 8 per cent to 202.4 million Swiss francs from 220.4 million in 2017. Income rose 1.6 per cent to 1.06 billion Swiss francs.

A slowdown in brokerage due to the low volume of transactions in the second half of the year was offset by an upturn in management and advisory fees. The proportion of clients with assets managed in mandates or funds has risen to more than 60 per cent.

Mr Longhini said Asia was a significant contributor across the private-bank and asset-management businesses. Asia now accounts for about 15 per cent of global AUM, and the group aims to take this share to 30 per cent in the medium term.

UBP's private-bank business in Asia has AUM of 15 billion Swiss francs.

"We're growing fast. Our net inflows grew last year by around 8 per cent, which is very solid. Most in the industry target net new money growth of four to five per cent ... With the capacity to take Singapore dollars, our growth can reach 10 per cent. We want to grow consistently by eight to 10 per cent a year."

Last year, the bank took on 20 new front-office staff. There are more than 70 relationship managers (RMs) in Asia, accounting for about 20 per cent of a total of 370 RMs globally.

"We have a nice set-up and it's a profitable business, which is important. It's one of the reasons to continue to invest."

In 2015, UBP acquired Royal Bank of Scotland's international wealth management business, which involved the transfer of Coutts International's activities in Singapore and Hong Kong. The transfer was completed in 2016.