Societe Generale Private Banking’s Asia-Pacific CEO, Olivier Gougeon, explains why sustainability, rather than size, is top of his agenda.
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PBI: How has SGPB focused its Asian business to benefit clients?
Olivier Gougeon (OG): Societe Generale Private Banking (SGPB) has been in Asia since 1997 and over this time, we have established ourselves as a key private banking player in the region. We have built up a robust and sustainable model where our size allows us to have the best of both worlds – scalability and the agility to be responsive to our clients’ needs and the changing landscape.
As the wealth management arm of an established universal bank, we can draw on the strengths and capabilities of our parent bank, the Group, to offer a range of opportunities to our clients in the region. Through our global centres of excellence, combined with the experience and expertise of our local teams, Asian clients benefit from a comprehensive range of solutions to suit their needs.
As well as being culturally and linguistically aligned, our relationship managers have in-depth knowledge and strong understanding of Asian clients, having dedicated significant focus on catering to their personal circumstances and business needs. The longevity of our staff, where about 80% of our senior relationship bankers have been with the bank for at least five years, reflects our stability and commitment to the long term interests of our clients. Working closely as a team with our locally based investment specialists, clients have access to an open architecture where a comprehensive range of best of breed products and services are supported by more than 40 market specialists in Singapore and Hong Kong.
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PBI: What are SGPB’s key initiatives in Asia?
OG: A sia i s one o f t he fastest g rowing wealth regions in the world and we recognise the importance and potential it represents.
The coming years will be an exciting as well as challenging time for us as we work towards deepening our client relationships and growing our business in the region.
Post the financial crisis, it has become even more crucial for us to strengthen the trust we have established with our clients, as they lie at the heart of our business. We will continue to focus on initiatives which enhance the qualities which our clients value – service excellence, strong personal relationship management and customised solutions for the long term. In addition, we will continue our initiatives to leverage technology and operational platform to enhance efficiency and respond to changing regulations and theenvironment.
PBI: What trends do you see in the Asia private banking market?
OG: Where private banks in Asia have had strong ambitions for rapid growth in the past, they are now more realistic in their expectations. Stability, quality business and sustainable growth are highly valued. Banks have become more focussed on adapting their business model, selection of markets and client segments, talent retention, allocation of resources and cost management.
Regulatory changes have also been dominating the scene as a major force shaping the industry. Banks have had to dedicate
significant resources to ensure continuing compliance with new and prevailing regulations. This trend is expected to continue
and will serve to raise the bar in professional standards while improving the industry’s reputation and clients’ trust in banks.
Where clients have been very risk averse in the past, investor confidence has increased in recent times. In Asia, we are also seeing a positive trend with a growing awareness among investors of the benefits of engaging the services of investment professionals to manage their assets better. This may be by way of discretionary portfolios or on an advisory basis while still maintaining control of investment decisions. The shift has been prompted by more second generation entrepreneurs who recognise the benefits of professional management in a complex environment.
PBI: Wealth planning is an area of growing importance in Asia, are you seeing more demand from Asian clients?
OG: With strong economic growth in Asia, many high net worth individuals, who are mainly first or second generation entrepreneurs, have successfully built up their wealth over the years. For some of them, their children have grown up and there is the realisation of the need to preserve their wealth and to be prepared to pass it on to the next generation.
At SGPB, we have been able to cater to the wealth planning needs of these Asian high net worth families through our long standing trust company, SG (Trust) Asia, which was established in Singapore in 2001. Through our team of local professionals who are well versed with serving Asian clients, and supported by our global centres of expertise, we are well positioned to help clients with transitioning their wealth to the next generation.
PBI: SGPB is strong in structured products, what other investment products are clients interested in across the region?
OG: In addition to our comprehensive range of investment products and services, we have particularly strong expertise in structured products. We have a expert team with excellent technical knowledge and solid experience in financial markets to provide our clients with personalised innovative solutions in structured products and derivatives.
From 2013, we have noticed clients adding more derivatives and structured products to their portfolios. Such products have been used in different roles; in certain cases, to take new positions on asset classes such as equity indices, basket of shares and currencies, while embedding protection on the downside; in other cases to hedge existing portfolios.
Clients have also been increasing their holdings in equities, in particular, in the US and Asia. Meanwhile, demand in fixed income products have been sustained. However, with rising interest rates and possible slow down of quantitative easing, bond values have been negatively impacted in the short term. On currencies, investors have been taking profit on their long US dollar positions and its recent slide versus Euro, Japanese Yen and British Pounds. For commodities, especially gold, which is a popular investment product in Asia, it has definitely lost some its shine.
Olivier Gougeon is regional CEO, Societe Generale Private Banking, Asia Pacific.
