The wealth arm of BNP
Paribas in Asia is aiming to grow assets under management from
$40bn to $80bn in the next three years, and double its number of
relationship managers.
The targets are part of a
three-pronged strategy developed by BNP Paribas Wealth Management
chairman and chief executive Mignonne Cheng.
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The first is a market-based
approach, similar to that now being employed at RBS Coutts (see
above), which will see the bank focus on the China, Hong Kong,
Taiwan, Singapore and India (onshore and non-resident Indian)
markets, rather than on specific booking centres.
“The new approach is to have a
market approach,” says Cheng. “Previously, we only looked at it
from a booking centre perspective, but that is changing. We are
taking a client view and wherever the client is we follow them. If
they want to book assets in Hong Kong, Singapore or Geneva, it
doesn’t matter. We follow the client.”
Increasing
cross-sell
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By GlobalDataThe second is to improve cross-selling between Wealth Management
and the Corporate and Investment Bank (CIB), a division Cheng
previously worked in.
To do this, Cheng is working on improving cooperation between
the two units and expanding elements of the CIB platform to wealth
clients, providing greater access to fixed income, equity
derivatives and corporate finance.
“That’s part of the reason I joined
wealth management, to try and leverage the franchise of the bank by
bringing more clients from the CIB platform to Wealth Management,”
says Cheng. “There have been occasional referrals between CIB and
Wealth Management but I don’t think we’ve used that to the full
extent.”
Third, and related to the
cross-selling strategy, is the creation of a new segment at the
bank called Key Clients, which will offer services to individuals
with more than $30m in investable assets (see facing page for
Deutsche’s key client offering).
As part of this process, the bank’s
super-wealthy clients, typically those with $100m or more with the
bank, are being migrated from a division called Premium Group into
the wealth management business to be serviced under the new Key
Client segment.
Premium Group was a division
jointly operated by CIB and Wealth Management and is now becoming a
direct part of BNP Paribas Wealth Management. The process is
ongoing and scheduled for completion at the end of this year.
Cultivating its key
clients
Key clients will offer more tailor-made solutions to clients and
leverage the support of CIB where there is demand for specific
products.
Cheng says particular areas of interest among the bank’s ultra
high net worth clients include access to structured equity
products, corporate finance, merger and acquisitions and IPO
possibilities for entrepreneurs and cornerstone investment
roles.
Equity derivatives in particular
developed a bad reputation in the financial crisis of 2008 to 2009
and Cheng says the type of structured equity products wealthy
individuals request has changed.
Accumulators, which allow investors
to buy equities at a lower price than they are quoted but
accentuate losses if the stock declines, were one such product.
Structured equity derivatives are regaining popularity,
according to Cheng, although they are now more commonly used for
hedging positions and reducing, rather than increasing, risk.
