Big takeovers in Asian private banking are typically a bonanza for headhunters, who seek to poach disgruntled bankers away from newly merged firms.
As we’ve reported, Standard Chartered has a “blank cheque” to hire more ex-Barclays relationship managers from Bank of Singapore, the firm that bought Barclays’ Asian wealth unit last year.
Now former ABN AMRO private bankers are being tapped up. They’ve been fielding more calls from headhunters since moving to LGT earlier this month, when the Liechtenstein bank concluded its takeover of ABN’s wealth operations in Hong Kong, Singapore and Dubai.
“Headhunters are definitely busy talking to them,” says Liu San Li, a former Coutts private banker, now client director in private wealth management at search firm EMA Partners in Singapore.
“The biggest concern for ABN bankers is the LGT brand – many Asian clients have hardly heard of Liechtenstein the country, let alone LGT. By comparison, even though it’s not tier-one, ABN has been a well-known brand in Asia for decades,” says Liu.
“So some RMs might have to move to better known banks. They won’t have a choice if their Asian clients just aren’t comfortable with LGT,” he adds. “To overcome this, they need to educate their clients about LGT – and most of the information about it is actually positive.”
Some ABN bankers may also find it hard to cope with LGT’s more “aggressive” business model, says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group.
“ABN AMRO was a slow-moving firm and wasn’t assertive in its business development. Ex-ABN bankers now will have to perform better than they have been recently,” says Sen. “They’re up against a bank that’s keen to grow in Asia.”
Senior ABN bankers will need to improve their return on assets at LGT, he adds. “Because ABN wasn’t aggressive in Asia, the older RMs got complacent. Now that they’re part of an aggressive bank, they’ll be required to improve their revenues. This will need a change in mindset.”
LGT employed 106 relationship managers in Asia last year and the ABN takeover has reportedly almost doubled its headcount.
While Julius Bear and Standard Chartered may be first in line to poach some of its new recruits, “all private banks” – apart from Goldman Sachs and J.P. Morgan, which only serve ultra-high net worth clients – will be interested in them, says Liu.
But despite the potential problems around brand recognition and revenue targets that we’ve highlighted, poaching from LGT won’t be straightforward.
“The best part of private banking M&As is that client assets move over relatively seamlessly. And LGT is known to carry out mergers well since it bought HSBC’s Swiss wealth business in 2014,” says Sen.
The ex-ABN bankers worked over the May 1 public holiday in Singapore and Hong Kong to ensure client assets and trade positions were properly migrated over, he adds. “So while LGT’s systems and the culture will take time to absorb, they have been earning revenue from day one.”
Sen says there are few duplicate clients in the merged bank because ABN managed a slightly lower segment of clients (the bulk of them had investable assets of $1m to $5m; whereas LGT typically goes after larger AUMs).
“About 90% of ABN’s bankers have moved to LGT. It’s a decent-sized bank and also has an open-skies policy – bankers can serve clients across markets,” says Sen. “There could be some exits because of the merger, but overall LGT is a good bank, especially for the more entrepreneurial RMs.”
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