Sixth-generation founder of one of Switzerland’s oldest
private banks, Yves Mirabaud, tells
Maryrose Fison why banking secrecy is not dead in the country’s
private banking industry and
Mirabaud is centred on consolidating its foothold after its recent
expansions.
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It may boast the world’s largest offshore banking centre,
but rule changes forcing Swiss banks to pass on information about
foreign clients suspected of tax evasion, may seriously impact the
way Switzerland does business in the future.
Switzerland’s decision to comply with the
Organisations for Economic Co-operation and Development’s (OECD)
rules relating to exchange of information treaties shortly before
last year’s G20 summit, and UBS’s ongoing dispute with US
authorities, left some speculating about a change in the Swiss
banking industry.
The most extreme comments in the press have
suggested compliance with OECD’s rules spell the beginning of the
end of the country’s competitive edge on offshore wealth, but Yves
Mirabaud, a managing partner and sixth-generation banker with
Geneva-based private bank Mirabaud, remains optimistic on the
future of the country’s banking industry.
“There has been a lot of speculation that [OECD
compliance] is the end of bank secrecy but that is absolutely not
true,” Mirabaud says. “There have been some changes because the
bank secrecy was protecting discretion on tax matters which will no
longer be the case following the decision to negotiate some double
taxation treaties, but the bank secrecy is still there and it’s
very important.”
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Dedication to tradition
Generations of families have built up
trust in Mirabaud’s services and it has worked hard to maintain its
reputation, often flying against the grain of prevailing investment
fads. During the boom years before the credit crisis, the bank
maintained a strategy of conservative investing. It avoided
products that it felt were unnecessarily complicated and credits
itself with protecting clients from paying a heavier price for the
market volatility.
“We have always been very conservative
investors and avoided highly-structured products that [our] bankers
and clients had difficulty understanding,” recalls Mirabaud. “We
invest in quality stocks, in quality companies and in quality
bonds… I would say the appetite for risk has increased [more
recently] but still our remaining philosophy has been transparent,
liquid and understandable investing.”
As of June 2010, the bank has more than 10,000
clients and CHF25bn ($22bn) of assets under management. Within the
last decade, the level of deposits has fallen only twice
year-on-year; once following the implosion of the technology bubble
in 2002 and after the onset of the credit crisis, in 2008.
Consolidating presence
The emerging markets and eastern
European countries have become fertile breeding grounds for private
banks looking to tap into new pools of clients with Mirabaud
adopting a policy of expansion in recent years.
Since 2000, the bank has pursued a strategy of
geographical diversification and now boasts bases on four
continents across 13 financial districts. It has offices in
Switzerland, France, Hong Kong, Canada, the Bahamas, Britain,
Monaco, Hong Kong, Spain and Dubai. Last year it also acquired a
minority stake in the Spanish brokerage firm Venture Finanza.
With more than a dozen offices opened worldwide
in recent years, Mirabaud says consolidation, rather than ongoing
expansion, is its major focus over the next few years. He says the
group is close to where it wants to be and the next 12 months’
focus will be on strengthening its presence, client base and
reputation within the relatively young branches in Dubai, France
and the UK.
“We have to work hard on our new investments.
France is still a new investment, we have new activities in London
too, so we will have to solidify all of this,” says Mirabaud.
Domestic focus
Over the next five years, the bank’s primary
development objectives will be to focus on its domestic private
clients with a target range of CHF1m to CHF5m, institutional
clients – which account for approximately 20% of the group’s assets
under deposit – intermediary services and product distribution.
Offering its private banking services abroad
also throws up challenges of a different sort. Distinct variations
exist between the banking services clients desire within Europe and
North America and within Asia and the Middle East, Mirabaud
explains.
“The new markets in Asia, the Middle East and
Eastern Europe are not used to giving you management power and they
are looking for an advisory service where they can take the
decisions in the end rather than giving you a mandate to manage
their portfolios,” he says.
This is one reason why the bank makes a point
of being as close as possible to its clients internationally. He is
reluctant to put a figure on the cost of establishing new offices,
but calculates it takes between three and five years for a new
branch to break even.
Tapping new markets
Approved by the Spanish regulator in
November, the Venture Finanza deal not only marks a major step for
Mirabaud into the Spanish-speaking market, it stands to open
profitable business channels for the bank through its offices in
Barcelona, Madrid and Valencia.
Consolidating its presence in Europe further
last year, the bank purchased a small shareholding in Finaveo, a
platform for independent wealth managers in France that offers open
management as well as multi-manager products, with the latter being
offered via Mirabaud Gestion SA, the group’s French investment
arm.
For Mirabaud, the bank’s goal with Venture
Finanza is straightforward. It will increase its share capital to a
majority stake within the next four years and aims to have Venture
Finanza’s business activities running as part of Mirabaud’s brand
by this November.
While the true impact of the OECD’s
information exchange agreements is yet to fully reveal itself,
Mirabaud’s strategy of global expansion is helping it prepare for
the rigours of a rapidly changing Swiss market.
