Strategy
Swiss, Asian Bank Marriages Flourish

The Swiss banking industry recently urged medium-sized banks to consider local Asia alliances as a way to tap into the region’s wealth.
Swiss private bank Bordier & Cie
has joined forces with a Vietnamese lender to develop services in
the Southeast Asian country, one of the hot “frontier markets”
over recent years.
The deal is also an example of medium-sized Swiss banks
partnering with domestic Asian players.
The lender has signed a strategic agreement with Hanoi-based
Military Commercial Joint Stock Bank, or MB. MB was founded
in November 1994 and its private banking arm was founded eight
years ago. Geneva-based Bordier will share ideas with MB on best
practices, processes and specialist training.
The agreement will enhance MB’s private banking infrastructure
because Bordier will help to spot what MB needs to do to prove
its value proposition, the banks said.
“With the aim of providing specialised and high-end financial
services to the HNW segment, we want to be recognised as the
leading private bank providing financial and consulting services
that are in line with international standards,” Lieutenant
General Le Huu Duc, chairman of MB, said.
“Through this cooperation, MB will provide high net worth
individuals with specialised asset management and private
consulting services such as immigration, health care, education,
etc. These services will not be limited to Vietnam, as we aspire
to reach out to markets in which Bordier is also present,” he
added.
The move comes days after the head of the Swiss
Bankers Association called for medium-sized Swiss banks that
lacked some of the footprint of the top-tier players to
forge local partnerships as a way of tapping into the
region’s fast-growing wealth.
Swiss-Asia combinations
The idea of Asian tie-ups with local players has been in evidence
for some time. In August, Lombard Odier (Singapore) Ltd, part of
the Geneva-based Swiss bank, worked with Mizuho Securities
(Singapore) to offer investment solutions and wealth management
expertise in Asia. Lombard Odier announced strategic partnerships
with UnionBank in the Philippines in August 2016, Kasikornbank in
Thailand in December 2014 and, most recently, Bank Mandiri in
Indonesia in April this year. Julius Baer and Nomura recently
announced a strategic partnership, with the Japanese financial
services group taking a 40 per cent shareholding in Julius Baer
Wealth Management Ltd. This enables the Swiss group to open up
JBWM’s bespoke discretionary mandate services to wealthy Nomura
clients in Japan. In March, Julius Baer and Siam Commercial Bank,
a Thailand-based group, signed an agreement to establish a joint
venture focusing on offering wealth management services to Thai
clients.
With Vietnam’s economy remaining robust – the World Bank has
dubbed its ascent in the past three decades as “remarkable” – the
country is seen as a promising young market. Vietnam’s gross
domestic product is estimated to have increased by 7.1 per cent
from a year ago in the first half of 2018 (source: World
Bank).
While emerging and frontier markets have been hit by headwinds
this year stemming from rising US borrowing costs, Vietnam has
not been as hard-hit as some others. The MSCI Vietnam Index of
the country’s equities surged by 31 per cent in the 12 months to
the end of last week, although in the year to date the index is
down by 3.0 per cent (measured in dollars, and showing a mix of
capital movements and reinvested dividends).
Some of the larger international banks have a direct presence in Vietnam, such as ANZ and Deutsche Bank, which recently announced new country heads there.
In Feburary this year, the non-government organisation Transparency International, which tracks issues such as corruption, said that Vietnam, while still labouring with serious issues of corruption, had made some improvements. The country scored 35 points out of 100 on TI's 2017 Corruption Perceptions Index, ranking 107 out of 180 countries surveyed, suggesting that anti-corruption efforts have met with some success.