Bank Julius Baer has origins dating back to 1890, and today, the Swiss private banking group is a premium brand in global wealth management. Editor-in-Chief of Vision, Leonard Stall, speaks to Group CEO Boris Collardi about the past, present and of Julius Baer in the Middle East
Vision: Julius Baer was the first international bank to open in Dubai International Financial Centre (DIFC). What encouraged you to make the move a decade ago?
Boris Collardi: We thought that there was potential for Dubai to be a hub for the region, and for a number of communities and regional markets, and everything has been going according to plan - although not in a linear way as we initially thought.
DIFC has developed very positively. It was just ‘an idea’ ten years ago. We had the first licence from DIFC, number one and, at that time, it was a bit of a leap of faith. There wasn’t much around The Gate! Back then, there were a lot of ideas and initiatives, but these have now been brought to life, and we’ve seen lots of companies and businesses moving to DIFC and people relocating here. So, for our business, private banking, it has been very flourishing ground.
For the first couple of years we were using the licence for a number of key transactions. In early 2006, we started pure focus on the private banking strategy, and set out to attract high and ultra high net worth individuals. The journey since has been only one way, growth. We now have around 100 staff in Dubai and that’s a testimony both to the potential of the business and the market share we could achieve.
We are not one of those large groups characterised by ‘stop and go’ strategies, undergoing constant change, where people come for three to five years, then there is a change in management
We have a broad customer base in our Dubai office. Local entrepreneurs, the non-resident Indian community, expatriates and Russian clients that have relocated to the emirate: altogether, an interesting mix of clientele.
How big is the regional footprint of Julius Baer’s Dubai base?
The office is now accounting for between 5 and 10 per cent of our overall business. If I add in non-resident Indian business, then it’s more than 10 per cent of our business globally. It’s mainly managed out of Dubai, although we have offices in Abu Dhabi and Bahrain, some physical local coverage in Kuwait, and we extend the circle to Lebanon, Egypt, Turkey and some other markets that we cover as part of this region as well. We also reach into East Africa from Dubai.
New markets are an important part of the strategy. Traditionally, we have been a Swiss bank for European clients, but in 2006 we began a new international growth strategy moving us into Asia and the Middle East, and then we started moving into Eastern Europe, Africa and Latin America.
What sets Julius Baer apart from the competition?
There are a number of things that distinguish Julius Baer today. First we are in a segment of our own. We are not one of those large groups characterised by ‘stop and go’ strategies, undergoing constant change, where people come for three to five years, then there is a change in management. At the same time we are bigger than the smaller private banks that come here and do not have the required investment.
So what characterises us is quite simple: we have continuity and commitment. We have been here for ten years and we have the same group of people, the basis for building relationships with clients. When you have continuity you can build relationships, when you have relationships you can have trust.
Where are the opportunities today?
There are only upsides at the moment. If I look at the region from a market point of view, we haven’t even begun to scratch the surface of a market like Saudi Arabia, a market we would like to be able to tackle in a systematic way in the years to come.
We will also be able to offer an entirely new set of capabilities to clients in India to invest outside of India, and for those outside to invest in India.
Our bank’s values also chime in with family businesses in the region and beyond. Next year we celebrate 125 years of the group. One of the questions we are now asking ourselves is how a company survives 125 years. It has to do with entrepreneurship, vision, courage, and innovation and these are things in our DNA.
We have a broad customer base in our Dubai office. Local entrepreneurs, the non-resident Indian community, expatriates and Russian clients that have relocated to the emirate: altogether, an interesting mix of clientele
We have gone through seven generations of family succession, of transition from one generation to the next, although in 2005 the family went to a minority stake and to opened up the capital of the firm for growth. Be it in Asia, or the Middle East where we see first, or second generation of transfer, this is an area where can bring a lot of expertise. We already run seminars with the Bank of China on succession.
Are investment strategies changing?
There are as many strategies as there are clients, but generally our clients are more conservative than they have been in the past. There has been a strong shift away from international diversification into more into local stocks rather than bonds, and there is certainly less leverage than in the past.
The recovery in the real estate sector has had a very positive effect on investment here. Asset value is going up, and income is going up for those that have a rental portfolio: it only has a positive effect. And cash flows are encouraging people to invest into new projects, and there are a flurry of these new projects coming on stream.