Barclays is selling its Asian private banking unit and five firms are potentially lining up to buy it. DBS, Julius Baer and Bank of Singapore (via its parent company OCBC) have reportedly already submitted non-binding bids, while on Friday Nomura and UOB also emerged as potentially suitors.
But what would life be like for the approximately 130 Barclays’ Asian relationship managers (RMs) at each of the bidding banks? Here’s an expect take.
Relationship managers’ main priority when moving banks is to keep hold of their clients – and that largely depends on being able to offer them similar or better products at the new firm. “Julius Baer and BOS have the best infrastructure and product offerings, so are probably the preferred destinations in overall terms too, with DBS third,” says former private banker Rahul Sen, now head of wealth management at search firm The Omerta Group in Singapore. “In terms of products, Nomura’s still too Japanese centric, while UOB is behind the others.”
Three of the five firms come with experience of integrating wealth management teams from other banks. Julius Baer took over the international wealth management business of Merrill Lynch in 2012, while BOS was formed in 2010 after parent company OCBC bought the Asian private banking business of ING. Most recently, in 2014, DBS purchased Societe Generale’s Asian wealth unit. “DBS has done a pretty good job at ensuring a smooth transition and keeping the Soc Gen people on board,” says Sen.
“Because UOB’s private bank isn’t quite as strong as the others, potentially the culture of a merged UOB/Barclays unit would actually be dominated by ex-Barclays people. That’s what happened at Bank of Singapore – it mainly took on ING’s culture, not OCBC’s,” says Sen. But there’s a downside too: “UOB has no presence in Hong Kong private banking and if it acquires Barclays, the HK Barclays employees might feel they have joined a non-existent organisation and feel isolated,” says a private banking source in Asia who asked to remain anonymous.
The strength of your brand matters to clients in Asia almost as much as your product range. Wealthy people like to be seen frequenting private banks with a commitment to the region. “DBS, BOS and JB have strong brand images in private banking. If they become part of these businesses, Barclays RMs would find they have a stronger reputation to rely upon,” says Pathik Gupta, head of Asia Pacific at consultancy McLagan.
Because they don’t have the product platforms to match the others, Nomura and UOB are likely to offer Barclays RMs higher salaries to entice them to stay after the takeover, says Sen from Omerta Group. “There has to be a risk premium if you’re joining these banks.”
Nomura may not yet be a tier-one firm for wealth products in ex-Japan Asia, but as we noted last year, it’s trying to sell more of its investment banking services to its entrepreneurial private clients. “Many RMs perceive Nomura as very strong in investment banking and in brokerage products and services,” says Liu San Li, an ex-Coutts banker, now head of private wealth management at I Search Worldwide in Singapore.
For Barclays’ RMs whose clients are mainly interested in lending products rather than IBD ones, Bank of Singapore may be the best destination. “Overall I think BOS and Julius Baer are the top two firms, but BOS generally has better lending rates than JB because it’s affiliated to OCBC, a deposit taking bank,” says a private banking headhunter who asked not to be named.
Want the best chance of being given new clients after your join? Hope for a DBS takeover. “It’s regarded as the safest bank of the five. It may have smaller product offerings than BOS and JB, but it has more in-house accounts,” says the anonymous recruiter.
If you thrive in revenue-focused teams, then UOB may be for you. “UOB differs from the others in that its bonus pay-outs are more brokerage oriented. They’re more focused on revenue rather than assets under management,” says Liu.
“It’s obviously not as large as Credit Suisse or UBS, but it’s not resting on its laurels either and has plans for aggressive growth in Asia. People I know there say it’s an exciting place to work in Asia at the moment,” says Sen from Omerta Group.
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