Lloyds TSB Private Bank wants to leverage its position
as the UK’s largest retail bank to become one of the top 5 UK
private banks in the next 3-5 years. Malcolm Glaister, director of
the bank’s UK ultra high net worth business, discusses his plans
with Nicholas Moody.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Lloyds Banking Group is the
UK’s largest retail bank and one the country’s biggest commercial
banks but remains small in the private banking space.
Its private bank has been earmarked as
an area for potential growth, with a renewed push in the UK.
“If you look at the revenue contribution of our
private bank to Lloyds TSB Group now, to where we should be in
three-five years, we have got a long way to go,” says Malcolm
Glaister, director of the bank’s UK ultra high net worth (UHNW)
business. “Therefore, it is a wonderful growth business.”
Within the past year it has made 12 new hires
to its wealthy client group, each with an average of 20 years
experience.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThese recruits have come from across the
industry including Deutsche Bank, SG Hambros, Barclays Wealth, UBS,
Citibank, and three different family offices.
Each banker looks after only 25 clients,
allowing them to flex pricing and challenge providers to get the
right price.
Quick growth planned
Glaister, who has been at Lloyds 14 months,
concedes it did not have a multi-million pound investment fund to
build its team rapidly but would hire opportunistically. It would
grow its teams in the £2m ($2.9m) plus and £20m plus space.
Glaister says that by focusing on those
segments, he thinks Lloyds can increase its share of wallet and the
number of clients in that space significantly.
“While we have got this small number that will
grow and it will grow reasonably quickly,” Glaister says.
“We have hired 10 people since last September
and I see that level of recruitment continuing – that can come
externally and internally,” he adds.
At 31 December 2009, Lloyds TSB International
Private Bank had £16bn in assets under management (AuM) in the £2m
plus segment globally. Glaister agrees it is ambitious to push into
the top five UK private banks when its AuM was compared to Barclays
Wealth or HSBC.
Lloyds splits its international private banking
service into two distinct brackets. High net worth clients are
those with minimum investable assets of £2m to £20m, with an
average of between £3m and £4m. Its UHNW service caters for £20m
and above.
The UHNW unit acts as a ‘quasi-boutique’ where
each banker sits across all its four private banking services:
personal banking services, investment management, credit solutions
and wealth structuring solutions. They act as the central contact
for the client, whether they want to deal with personal assets or
institutional assets.
Lloyds TSB International Private Bank wants to
create a very different proposition for clients with investable
assets of £2m plus, says Glaister. In particular it proposes
creating bespoke portfolio management for smaller clients as well
as its UHNW customers.
“Every private bank does that for a £30-50m
client, but not many do that for a £5m client,” Glaister says. “We
are now doing that for clients who have investment portfolios of
£5m and upwards.”
Glaister suggests Lloyds is the ‘obvious
choice’ for new private banking clients in the UK, where the market
is segregated with no natural leader.
“Some banks put their brand out as being the
bank of resident non-domiciles, global people, or bankers to the
Queen,” he adds. “We are the biggest British retail bank – there is
no reason why we cannot sit in that middle ground and say we do not
need to differentiate ourselves.”
Instant credibility
Glaister says growth is expected to come from
several directions. The first is by tapping into its pools of
existing Lloyds retail and corporate clients.
He also hopes the high calibre of its recent
senior banking recruits will give Lloyds the instant credibility
needed to gain new customers on the high street.
“Clients now want something different from
their bank,” says Glaister.
“They need to see through fees, liquidity and
counterparty to have absolute transparency on everything they do.
More and more they look to the private banker as their person on
their side of the table, looking at what the bank can do for
them.”
Glaister says there is a big shift toward
absolute transparency.
“The client is paying for advice and they
should be totally aware of the expense of running their portfolio
or wealth solution.People in the past have not asked enough
questions around what is the total expense ratio [of products],”
Glaister adds.
Being part state-owned has little impact on
Lloyd’s private banking business, says Glaister, as it is perceived
as being a stable, conservative bank.
“We are not about delivering first quarter
shoot-your-lights-out performance,” he says. “We are about
delivering preservation of wealth with consistent, no-surprise
performances. We are not about highly volatile returns and
uber-trading strategies. [We are] a bank whose DNA is built around
risk and managing it.”
