The Asia strategy of VP Bank
Asia is considered one of the most important growth markets for private banking. According to a study by Boston Consulting Group, the continent is the only region of the world where new client money is growing at a double-digit pace. And the number of billionaires in Asia is steadily increasing – a target group which has a tremendous need for comprehensive, professional financial services.
For these reasons, VP Bank has defined the Asia/Pacific realm as one of its target markets and sees substantial growth opportunities there.
However, this growth market, too, is faced with the challenges of today’s consolidation within the private banking industry – in other words, narrower margins, rising costs due to regulatory pressure, and heightened competition. To stand the test of time, banks in Asia will not only have to position themselves as niche providers with a sharply defined profile, but, just as important, also render truly personalised customer service.
VP Bank meets these requirements to a tee and is pursuing a successful strategy in Asia. As a “boutique bank”, it is clearly positioned as a source of top-notch financial solutions for a highly demanding clientele. VP Bank does not engage in risky investment banking activities, nor does it offer retail banking services in Asia.
Successful business model
VP Bank is present in Asia as a mid-sized bank with some 50 employees. Here as well, the Bank’s business model is based on two strategic pillars: private banking and the intermediaries business. Its individual target markets are primarily in Southeast Asia, namely Singapore, Indonesia, Malaysia, Hong Kong and Thailand. The Bank’s client advisors cater to the needs of high net worth individuals (HNWIs) with assets in excess of 1 million Singapore dollars, as well as to the very special requirements of ultra-high net worth individuals (UHNWIs).
The growing number of financial intermediaries in Asia opens up yet another promising opportunity. Ever since its founding more than 60 years ago, VP Bank has been actively engaged in this segment and today offers its excellent services also to intermediary clients in Asia. Efficient banking, securities trading and administration models for fiduciaries and external asset managers, as well as personalised attention and the cementing of strategic partnerships, are evidence of the Bank’s resolute client orientation, optimal deployment of resources and outstanding service quality. And this offering is broadened continuously.
Thanks to its streamlined hierarchies, VP Bank is highly flexible. Decisions are taken expeditiously, and direct contact with top management can be arranged unbureaucratically. Intermediary clients benefit from the direct access they have to the trading rooms in Singapore and Liechtenstein/Switzerland, which cover the key time zones for securities transaction purposes.
VP Bank is represented in two of Asia’s most important financial centres.
VP Wealth Management (Hong Kong) Ltd was founded as an asset management company in 2006. Its core competencies are portfolio management and the administration of family offices for wealthy private clients. Investment advice, securities trading and safe custody services are also offered.
VP Bank (Singapore) Ltd is a wholly owned subsidiary of VP Bank Group with bank status and approximately 40 employees. Established in 2008, its core competencies include portfolio management and financial advice for wealthy private clients as well as services for external asset managers.
In recent years, VP Bank has expanded its presence considerably in Asia and thereby sent a clear signal to the market. VP Bank (Singapore) Ltd took up occupancy of new offices in 2016, which now enable a doubling of its staff and provide sufficient room for further expansion. Compared to the headcount at the end of 2015, the number of employees at the Singapore office increased this past year by 33 per cent.
Growth is of course a primary objective of VP Bank’s strategic thrust. Compared to the saturated European markets, the trend in client assets from the Asia/Pacific region continues to rise. VP Bank is keying on that trend by reinforcing its Singapore office with added staff who offer their clients outstanding value in the Investment Advisory, Wealth Consulting and Succession Planning areas. In the next three years, the Bank intends to recruit up to 40 new advisors in Asia.
But internal expansion is not the only way VP Bank desires to grow in Asia. Here, as well, the Bank will invest in growth by seizing upon special opportunities as they arise in the market, for example through corporate acquisitions and the takeover of entire teams.
In the medium term, plans are that the proportion of total Group revenues attributable to VP Bank’s foreign target markets will increase from the current 30 per cent to 50 per cent – and Asia will play a central role in this regard.
Intensified regulatory pressure presents a challenge also in the Asian markets, one which VP Bank is mastering by means of various staff training courses and the recruitment of specifically skilled personnel. A compulsory Crossborder Policy addresses all risks in the area of law and compliance.
Given the recently augmented Executive Board in Singapore under the leadership of its new CEO, 2017 will mark a further milestone in the expansion of VP Bank in the Asia/Pacific region.
As a lean financial services provider with short decision-making paths, VP Bank in Asia will be one of the winners from the consolidation that is currently underway in the industry. The Bank’s proven business model, which focuses on wealthy private clients and professional financial intermediaries, combined with its manageable size, means that VP Bank Group is well equipped for the ongoing changes in the Asian markets. And not of least importance, of course, are the Group’s stable shareholder base, solid capitalisation and farsighted strategy.