Societe Generale Private Banking Hambros (SGPB Hambros) is looking to acquire a private bank to bolster its presence in the UK, just months after selling its Asian division to DBS, Valentina Romeo and Mark Foxwell report.
The bank is rebalancing internally and establishing a much stronger focus on the UK as the group doubled its presence in the region compared to last year.
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Christophe Billard, group commercial director at SGPB Hambros, said the bank has considered various acquisition opportunities since last year to "increase its foothold in the UK."
"We are definitely looking to expand further, this is part of the growth plan for the whole UK, Crown Dependencies and British territories commercial strategy plan," he said.
PBI can reveal that SGPB Hambros has met with investment banks in recent weeks to look at potential opportunities with an unlimited war chest at its disposal. Some of the proceeds from the Asian sale could go towards an acquisition.
"If a potential acquisition matches the DNA of SGPB Hambros, we are happy to continue that trend," said Billard.
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By GlobalDataSGPB Hambros is itself the culmination of an acquisition when Societe Generale acquired Hambros Bank in 1998, and has since acquired a number of other businesses, including the private banking arm of Barings Asset Management, London and Guernsey in 2011.
Billard said that it will assess later on this year whether to expand into any new regions in the UK. Currently, it has offices in a number of offices outside of London, including Cambridge, Edinburgh, Leeds, Lymington and Newbury.
"In centres as Leeds, Cambridge, Edinburgh and Newbury there is a loyal base of customers. There is a strong potential in the UK, not just in London. In these other regions you also have private clients who know what private banking is and understand what Hambros is. 10% of our business is now in the hands of the regions," Billard told PBI.
As the bank is ‘rebalancing the capital’ after selling its Asian unit to DBS, Billard explained:"If we wanted to be more permanent and long -term forward looking, a re-adjustment was necessary to rebalance the capital utilisation and scale resources."
In order to meet its growth target, the bank is in the process of hiring eight client relationship managers (CRM) across London and its regional offices, according to a spokeswoman. Previously, the bank hired 16 new CRMs and last month it announced a new advisory division, consisting of 12 advisors, to provide support to bankers with investment advice for their clients.
SG Hambros recently also re-organised its London-based Russian team to focus more closely on Russia and the Commonwealth Independent States.
Billard added: "Of course we are reinforcing London, but we have been spreading our resources on the international teams as well, like our French unit, and we have also totally reshuffled the Russian team."
Societe Generale Private Banking, present in 14 countries globally with over 2,400 employees, has more than 84.5 billion ($116.3 bn) of assets under management (AuM) as of the end of December 2013.
Earlier this year, SGPB Hambros also said it is planning to double its AuM organically by 2019.
Eyeing up Africa
In addition, the bank is exploring an expansion of its private banking services in West Africa, including Morocco in the North and the Ivory Coast, Ghana and Nigeria.
The bank is seeking to capitalise on SocGen’s links with the francophone region targeting its existing network, such as large corporate or entrepreneurs.
"Rather than embracing everything, we will probably restrict business to where we have connections and potential synergies with the rest of the bank," Billard said.
"We have one small team in Guernsey that is already handling a little bit of business in Africa, but it is not organised properly. We are looking at how we can ensure that we have a proper correlation with the existing Societe Generale network in Africa," he added.
SGPB Hambros has already a strong presence in South Africa, currently the largest market for HNWI in the whole country (50,000 HNWIs).
In South Africa the larger share of the new wealth stays onshore, but there is still a strong need for securing assets off-shore. Furthermore, HNWIs are increasingly interested into international wealth planning solutions and new international private banking centres (Mauritius, Dubai) along with the traditional ones (London-CI, Geneva), SGPB Hambros said.
Asia still part of the game
Since it divested its Asian business in March this year, Societe Generale Private Banking has established a partnership with DBS to offer a strategic booking platform to both banks’ clients on Asian and core European markets.
The partnership is intended to offer DBS clients the opportunity to book in major centres, such as SGPB Hambros in the UK, but also in the French, Swiss, Luxembourg and Monaco units of Societe Generale private banking.
"Conversely some of our clients who are willing to book in Asia or de-localise to Asia, would be also offered the platform of DBS (mainly Singapore and Hong Kong), but they will be referred to regional experts," Billard said.
After much speculation, SocGen sold its Asian private banking business (Singapore and Hong Kong units) to DBS for $220 million and total of $12.6bn of AuM. The move was part of SocGen’s cost-cutting and disposal program also pushed by the tough competition among Asian wealth managers.
However, Billard said: "We are not really leaving Asia, but we got to work on a different business model which is capital lighter. The bank has been investing a lot in Asia in the past, but it has also reckoned that the competition is extremely fierce, margins have gone down, clients are extremely demanding particularly in Asia, so revenues were limited."
According to a DBS spokesperson, there is still an ongoing integration between the two groups, but the transaction is expected to be completed in the last quarter of this year.
Despite several players are struggling to maintain profitability and retrench to their core markets, namely Credit Suisse and Barclays, SocGen seems to believe there is still a high business potential in the UK as HNWI’s appetite for investments starts to re-emerge.
As Billard explained, SGPB Hambros has also witnessed a growing trend of French entrepreneurs and UHNWIs expatriating to the UK and said it’ll ‘actively pursue’ this client segment area.
SGPB Hambros might have that ‘distinctive feature’ to compete in the market, given its stable international ties with Societe Generale. Furthermore, being smaller in size, Billard said Hambros’ strength as a niche business is all on their RMs and the quality of their relationship with clients.
"To better concentrate on clients you need better resources, that’s why we are focusing on hiring quality bankers dealing with smaller portfolios. This is a constantly growing and changing game. In the UK there is still room for business and this is also because other banks are not properly servicing their clients."
