For Liechtenstein-based VP Bank 2018 was a milestone year. The enterprise, with its boutique private banking model, celebrated its 10-year anniversary in Singapore, and its drive in Asia shows no sign of abating, with recent changes a clear signal of intent.
For some seasoned observers, the bank's longevity as a standalone enterprise in Singapore has proved that the boutique model can work in Asia, as witnessed by new board commitment and the addition of several senior industry hires.
This anniversary year also saw a change of status, when the bank upgraded its Singapore operating status from a merchant bank to a wholesale bank, deepening the bank's bond to Asia. The motives behind the move were not difficult to discern: opening access to more products and services for domestic clients, including the ability to do business in Singapore.
"Being a full branch now gives us access to the balance sheet of the head office which is very, very strong," says Bruno Morel, CEO of VP Bank in Singapore. "As we now have the capacity to lend, 2018 has been a very busy year," he adds.
To support its new status in the Lion City the bank has hired extensively, bringing the number of employees in Singapore up to 70, and further additions to the operation are on the cards.
"Next year we will continue hiring, but we need to digest a bit of what we have done this year, the idea was to double in two or three years, so we're close to it," Morel says. With Asia in mind, VP bank also pulled off a hiring coup with a strategic addition to its board of directors by bringing in former Julius Baer Asia CEO, Thomas Meier, in March this year.
For the coming years the focus is on establishing Singapore before considering further onshore private banking expansion in Asia. The bank does, however, have a presence in Hong Kong through its asset management firm, an eight strong team.
"I mean, we have to be selective in our expansion. We cannot grow everything at the same time. That's why the focus in the coming years is on Singapore, so we make sure we are stable here before we move to focus on another location," Morel says.
Questioned on whether his bank is looking to explore regional partnerships, a model other European private banks have been developing, Morel is sure this will not be the case for VP Bank. "The DNA of our business is on working with intermediaries, external asset managers and family offices, so, in practice, we already have a lot of small partnerships," says Morel.
There are undoubtedly other business relationships around Southeast Asia which his bank could try to tap, Morel emphasizes that the majority of VP Bank partnerships are with Singapore and Hong Kong-based firms. These wealth hubs dominate as they provide the right legal framework for this kind of business, according to Morel.
While other banks have recently exited the external asset management business, VP Bank has sharpened its focus on the sector carving out a prominent position in Asia. The bank utilizes innovative approaches, being an early adopter of technology to serve these clients, which has in turn allowed it to scale up significantly while keeping a lid on costs.
"The intermediaries don't have a lot of resources to invest in their own technology so we do it for them, we can consolidate everything, even if they use three custodian banks, we can consolidate for them and their clients in our system," Morel says.
In Europe, the Liechtenstein bank, listed on the SIX Swiss Exchange, has acquired two new businesses during 2018. It snapped up the Luxembourg private banking business of Catella Bank, while its subsidiary VP Fund Solutions took over the management of Carnegie Fund Services.
With a generous amount of equity sitting on the balance sheet an acquisition in Asia is now also in play for VP Bank, underscoring the banks momentum in its Asian ambitions.
However, finding a suitable investment to expand the bank's Asian footprint is likely to be a frustrating waiting game.
The field of potential acquisitions has diluted dramatically over the past couple of years, with the Asian wealth units of Societe Generale, Credit Industriel et Commercial, Barclays and ANZ being snapped up by the expanding private banking units of Singaporean banks DBS and Bank of Singapore.
"At the moment in Asia, there's not much to buy, it has dried up a bit," Morel says.
