Reyl & Cie looks East for growth
Switzerland’s Reyl & Cie is looking to expand its client base and investment activities outside Europe as politics limits its scope at home.
Switzerland’s Reyl & Cie is looking to expand its client base and investment activities outside Europe as politics limits its scope at home.
If Switzerland's private banks needed any more encouragement that the future growth for their industry is to the East, they got that encouragement recently, from Bern.
For the market in the West seems to have no future. The government announced a tax deal with London in August, following a similar agreement it made with Berlin.
Swiss banks face calculating, collecting and remitting tax owed from undeclared Swiss accounts held by UK taxpayers.
To avoid extra, hefty charges, account holders may consent to their identities being revealed to London.
François Reyl (pictured), chief executive of the Geneva-based private bank and asset manager Reyl & Cie, says: "Very clearly, the traditional offshore, European-based private banking account market in Switzerland is dying a slow death.
"The opportunities given to cater to clients not compliant with their local tax authorities is quite rapidly disappearing. Switzerland is at the very centre of this.
"Exchange of information will increasingly become the norm. The European offshore market is one where we do not see any future. What is happening is requiring Switzerland's banks in general to reinvent their model."
This dilemma raises two questions immediately. First, who will replace the non tax-compliant Europeans who elect to move their wealth elsewhere? And second, how will banks such as Reyl & Cie develop, to keep other clients as Switzerland's tax advantage falls away?
Wealth creation
To answer each question, look east. Reyl says: "We are pursuing a growth strategy, but growth in an axis oriented towards the East." He mentions Asia (including China), the Middle East, India and Russia.
"This is where wealth is being created and where new entrepreneurs are being rewarded with financial success. They may seek the services of a private banker."
Middle East and Asian clients today account for about 35% of Reyl & Cie's private wealth management, and Reyl expects over time for most of his bank's business to come from outside Europe, in terms of origination-of-funds.
At such moments of dislocation - as centres of political influence, economic power and wealth creation shift eastwards - he says the size of a private banking business is less important than its nimbleness.
"It is clearly necessary to be agile in your strategy and be very tactical in response to change. Our decision making process is much shorter and we are accountable for our actions. It's a shareholder culture - once we find people who share the same values as ours, the contractual and deal-making process is easy and quicker."
The joint venture Reyl & Cie struck with Samena Asia Managers in Hong Kong this April was one such example.
