Some financial groups have pulled out of Asia over the past few years, or scaled back certain operations, only to start returning in pursuit of a large and rising affluent middle class. VP Bank is determined to stay for the long haul, notwithstanding current headwinds caused by geopolitics and other forces.

It may not be the world’s largest bank, but with an international footprint straddling most time zones and partnerships with groups in countries such as China, Liechtenstein-based VP Bank reckons it knows how to make most of its strengths.

VP Bank Wealth Management (Hong Kong) is an important part of the bank’s business and has its part to play in the overall firm achieving a 4 per cent-plus annual growth in net new money out to 2026, under its medium-term strategy, plus a profit margin of more than 15 basis points and cost/income ratio of 70 per cent out to 2026. At the end of 2021, it had SFr51.3 billion of client money, rising 8.1 per cent from a year before. Its Basel Tier 1 capital ratio of 22.4 per cent is robust by international yardsticks. Globally, headcount rose last year to more than 938 staff.

WealthBriefingAsia recently spoke to Reto Marx, head of Hong Kong, VP Wealth Management (Hong Kong). The bank has operated offices in Hong Kong and Singapore since 2006 and 2008 respectively.

“There is much more we can do in the region. Everyone knows about its [Hong Kong’s] financial importance here. There are many opportunities in Greater China. We moved to a new office in Hong Kong, and we can double our headcount. We will remain nimble in this regard,” Marx said.

“Aligning our organisation to drive Strategy 2026 forward, in order to scale and grow, we have integrated Hong Kong and Singapore as one region,” he said. “This includes putting in place our first Asia management committee (Asia Manco) and expanding our Hong Kong office (larger office space) as part of VP Bank's Asian expansion in order to accommodate anticipated headcount growth.”

Marx said the business is thinking about the long-term, regardless of shorter-term problems and political issues. It is important that VP Bank shows Asian clients it is in the region for the long haul. “Nobody doubts that China will catch up [with the West] rapidly and that is why I am here.”

That Asia commitment comes through in several ways. For example, Hong Kong-based Hywin Holdings, the wealth management firm, has partnered with VP Bank. In 2021 VP Bank and its sister businesses signed a pact with Hywin Wealth Management and associated entities to build an offshore platform pitched at wealthy Chinese clients. This partnership approach is not unique to VP Bank, of course. Other firms such as Julius Baer, Schroders and Bordier, to name just three, have done the same in order to tap local expertise. Time will tell how well all these arrangements work out.
 

International reach
VP Bank has offices in Liechtenstein, Switzerland, Luxembourg, Singapore, Hong Kong, and the British Virgin Islands. These are its five international locations.

In Asia, VP Bank provides intermediaries with what its annual report calls a “state-of-the-art service platform,” providing wealthy private clients with advisory services in wealth management.

Demonstrating a deep, long-term commitment to doing business in Asia is crucial, Marx remarked, noting that there have been lessons learnt from banks that sold their Asian private banks, only to try and come back after a few years.

Intermediaries (family offices, external asset managers, and others) are an important Asia client segment. 

“We have focused on intermediaries, private individuals and investment services,” Marx said, alluding to VP Bank’s relationships with organisations such as Hywin Wealth. “We are very much in the intermediaries space and that remains our DNA. The bank has had success in this area, including with family offices.”

The start of the Wealth Connect financial market regime tying together mainland China, Hong Kong and Macao was done to much fanfare. However, it is not yet a major deal for banks such as VP which look after the higher end of the HNW market, nor is it for ultra-HNW clients, Marx said. Developments may change in time.

The group has been busy. Last August, VP Bank rolled out the ORBIT alternative market platform. This is about incubation, sourcing and offering private market investment opportunities to VP Bank’s clients and non-clients. It plays very much to the current hot trend of interest in private market investment opportunities, which has attracted large interest in Asia, Marx said.

No interview is complete without discussing sustainability and environmental, social and governance (ESG)-themed investment. Marx raised the subject of how the firm has developed the “VP Bank Sustainability Score (VPSS)”, which the bank applies to its ESG investments and activities.

“Clients want to know about how their money is being invested,” he said.