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Liechtenstein private bank VP Bank seeks Asia wealth pie, doubles HK head count

Liechtenstein private bank VP Bank AG is doubling down its efforts in Asia to capture the region's growing wealth, top executives said in an interview with S&P Global Market Intelligence.

The European wealth manager this year has expanded its leadership team in Asia, after combining the senior management of its Singapore and Hong Kong offices. The private bank also said it plans to double its head count in the Hong Kong office while being "opportunistic" in partnerships in Southeast Asia to expand its reach to the local affluent population.

"There is no denying that the big growth story will be in Asia," said VP Bank Asia CEO Pamela Hsu Phua.

"What's important is that we are bringing Asia together as one holistic unit to push through 'Strategy 2026'," said Phua, referring to the bank's global five-year roadmap to achieve a net income of 100 million Swiss francs.

Globally, VP Bank reported a net income of 29.9 million Swiss francs in the first six months of 2021. Its full-year 2020 net income fell to 41.6 million Swiss francs from 73.5 million Swiss francs a year earlier due to the pandemic. The bank did not disclose regional revenue breakdowns.

Many global banks, such as Citigroup Inc. and HSBC Holdings PLC, are expanding their operations in Asia to capture the region's growing wealth market. Consultancy firm BCG estimates assets under management in Asia will expand 11.6% annually between 2020 and 2025. Growth of penetration will likely be the key driver to wealth management revenue in the region, estimated to double over the next five years to $52 billion, the consultancy said in a June report.

A key component of VP Bank's strategy is to focus on Asia, although the bank declined to disclose the target revenue contribution from the region. Currently, VP Bank maps out its Asian target markets in Hong Kong, Singapore, Indonesia, Malaysia and Thailand.

What's next in Asia

Chief of Staff for Asia Heline Lam told Market Intelligence that efforts to focus on Asia includes doubling the bank's head count in Hong Kong. Part of the head count will be dedicated to build the intermediaries team for Greater China, Lam said.

VP Bank's main strength lies in its intermediaries business, serving other financial services providers such as trustees, external asset managers and family offices. The intermediaries business currently contributes more than 50% of assets under management for the bank globally.

Part of the bank's growth strategy in Asia is built on local partnerships. In Hong Kong, the Liechtenstein lender in 2019 tied up with Hywin Holdings Ltd., a Chinese wealth manager with some 1,600 onshore bankers and relationship managers. The partnership allows VP Bank to provide offshore services to Hywin's onshore clients. In March, VP Bank deepened the partnership by acquiring a 3.4% equity stake in Hywin's Nasdaq-listed Hywin Holdco.

"Our strategic partnership with Hywin Wealth provides us with an excellent opportunity to successfully continue VP Bank Group's Asia momentum and is a key building block in the development of a wider, highly attractive client base in this region," Phua said.

Ultimately, in competing with other pure-play rivals like Banque Pictet & Cie SA, Union Bancaire Privée UBP SA and Julius Bär Gruppe AG, which are all vying for the growing wealth market in Asia, VP Bank's leadership is willing to take more chances on the continuously evolving market.

"Leadership across the industry is something that needs to be rethought," Lam said. "Managerial courage is very important."