Rossinsky, managing director and global market manager for SG
Private Banking in the ASEAN markets, has seen his fair share of
credit crunches. In fact, he was in the thick of the action in
Indonesia during the 1997-1998 banking crisis. Titien Ahmad
reports.
With the current gloom and doom facing the
financial services industry, Nik Rossinsky foresees that “the
coming year will be challenging for many investors, some of which
are affected in the US subprime crisis. With the volatile markets,
clients have become more risk averse. Capital protection is
becoming increasingly important despite the fact that this strategy
compromises potential payoffs.”
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In an interview with PBI in SG
Private Banking’s sleek new office in Raffles Quay, Rossinsky
stressed that “unlike the bigger players on the market, SG Private
Banking is a medium-sized player and quick to react in order to
offer complete solutions and expertise to our high net worth
clients.”
He added, “SG Private Banking is pretty well
known for innovation in terms of financial engineering. The
volatility is the downside of the current situation but it also
creates opportunities. You now need to create products that protect
capital so that clients who are conservative can have the
reassurance of that protection.”
Rossinsky sees the private banking market,
especially in Asia, moving forward at a fast pace driven by new
wealth and new markets. According to the World Wealth Report 2008,
emerging markets such as Eastern Europe, Latin America and
Asia-Pacific were the highest growth regions in 2007 for high net
worth (HNW) population and wealth. Asia’s HNW population grew by
8.7 percent from 2006 to 2007 against Europe’s growth of 3.7
percent, while the region’s wealth grew by 12.5 percent compared to
Europe’s 5.3 percent.
Rossinsky has been expanding the on-the-ground
presence for SG throughout the Southeast Asian region with offices
in Brunei and the Philippines – markets other private bankers have
chosen to service from a hub in Singapore or Hong Kong.
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By GlobalData“In 2005, SG Private Banking Asia Pacific,
through its legal entity SG Financial Consulting Services Pte Ltd
obtained the license to operate wealth management services in
Brunei and in 2006 expanded into Manila in the Philippines,” he
noted.
“We were the first private bank that set up in
Brunei to be a wealth manager and financial advisor. The potential
client in Brunei likes continuity, steadiness and having things
they need around them. Being there shows our commitment to the
market and we have seen that the loyalty factor increases when we
have people on the ground,” he said.
Rossinsky is in the process of setting up an
office in Bangkok and sees more to be done in Vietnam, Thailand and
Malaysia. He sees “a lot of wealth being created. There is a new
sense of entrepreneurialism in markets like Indonesia and Malaysia
that creates a lot of new wealth with a new generation of
entrepreneurs. We have to be attuned to evolving opportunities in
these markets to catch the trend.” However, his growth ambitions
are not without challenges.
“As wealthy individuals have multiple banking
relationships to diversify their investments, there is increasing
pressure and competition among the banks,” he concedes.
“There are a lot of private banking players in
the market. The first and foremost challenge is building an
adequate degree of differentiation and I think we are fairly
successful in coming up with new and innovative ideas – we allow
people to invest in wine and distressed debt that has a big upside.
We structure products around such ideas and this helps
differentiate us.”
Rossinsky sees an increasing level of
sophistication among his customers who know how to take advantage
of opportunities in a distressed market.
“The average HNW individual is becoming more
and more – and rightly so – focused on returns and is price
sensitive. The relationship with your private banker still counts
but it is not as prominent as it was 10 years ago; people are
becoming more product-savvy,” he observed.
“Another challenge that many private banks now
face is that of recruitment. With the recent financial crisis,
private banks are now more cautious on hiring. The escalating costs
of onshore expansion, economic slowdown and repercussion of the US
subprime credit crisis are threatening the growth bubble of the
private banking industry.”
In an industry where reputation is key,
Rossinsky does not see the recent rogue trading scandal at parent
Société Générale as affecting the region’s private bank
operations.
“In terms of client reaction, there were some
questions of course. We received phone calls but the management in
Asia handled it quite well and we were able to assure clients that
there was nothing to worry about.
“SG Private Banking is not affected by this
isolated incident,” he stressed. “The fraud concerned very specific
activities [proprietary trading in the corporate & investment
banking arm] and has been isolated. It has no impact on the bank’s
client activities and products.”
SG Private Banking’s assets under management
have grown above 30 percent per annum on average since its
establishment in 1998. In Asia, the bank manages around $20 billion
and Rossinsky is still optimistic on the outlook of the region.
“In general there is still a positive outlook
for private banking in the coming years despite some downside on
the financial markets and global economy as a result of the
financial crisis. The private banking market, especially in this
region, is still moving forward at a high pace, with the new
creation of wealth and new markets emerging.”
