Surviving the generations

BORN into a family which has spent a couple of centuries in the relationship-centric banking business, it is no surprise how Patrick Odier begins the interview with a bit of diplomatic finesse. "I like the days in Singapore. They are very efficient. It's like in Switzerland. You know why you're here," Mr Odier tells The Business Times. "But at the same time they have a dynamic that we don't necessarily have anywhere else, this sense of things moving. It's really motivating." The Swiss banker, aged 62, is in a good mood. Lombard Odier, the mid-sized Swiss bank which bears his family name, is flying high on the back of a boom in financial markets. Asian assets under management still form a relatively small proportion for the bank, whose clientele is a third Swiss and a third European.

But the bank has been minting money here, growing Singapore earnings at a double-digit pace. It is expanding in South-east Asia through partnerships with local, family-owned private banks. It is also financially strong: Its common equity Tier 1 ratio, or capital relative to risk-weighted assets, at 28.7 per cent as of end-June 2017, is double some of its competitors. And as private banks here try to nudge Asian clients to higher-margin discretionary portfolio management products and not treat their banks as merely brokers, Lombard Odier, like some of its European peers, occupies an enviable position.

Some 45 to 50 per cent of assets under management (AUM) are in discretionary mandates, while another 10 to 15 per cent are in advisory ones. By contrast, some banks here will be happy with merely 10 per cent of their AUM in discretionary portfolios. "If we can demonstrate returns in a systematic way, which I think we have done over the years on average, I think we will preserve our franchise as discretionary managers," Mr Odier says, when asked how the bank keeps its business going.