Swiss private bank Reyl & Cie plans to expand internationally and increase its assets under management by 50-100 percent over the next five years as it diversifies further away from its traditional business of advising the super-wealthy.
The bank managed 10.7 billion Swiss francs ($11.5 billion) at the end of 2014, and although that fell by 9 percent in 30 minutes on Jan. 15, when the Swiss National Bank unleashed a huge rise in the value of the currency, it has since recovered and grown again.
“We are working on a 2016-2020 plan which involves getting our assets under management significantly north of 15 billion, so we still have strong ambitions,” Chief Executive Francois Reyl said in an interview at the bank’s headquarters in Geneva for the Reuters Wealth Management Summit.
“Hopefully we can grow the business north of 15, north of 20 maybe.”
Swiss private banks have been buffeted by a storm of scrutiny and regulation in the past five years, largely linked to accusations of helping rich American and European clients avoid tax by stashing money in secret accounts in the past.
The reforms have leveled the playing field, exposing Swiss banks to low-cost rivals abroad and prompting a wave of takeovers as banks seek the size needed to survive.
Swiss banks still have a cachet, Reyl said, because of the “culture of confidentiality” that is part of the national character, but otherwise they face fierce competition.
Reyl’s strategy over the past 12 years has been to branch out into institutional asset management, fund services and corporate advice on mergers, lending and debt, giving it more legs to stand on when times are tough.
Its target private banking client is a first or second generation cross-border entrepreneur who is still in the “wealth creation phase”, said Reyl, whose father founded the bank in 1973.
With ultra-low interest rates, clients are currently showing interest in Swiss and British real estate, private equity, alternative investments and shares, while steering away from fixed income, cash and gold.
The bank now manages 3.2 billion francs in its traditional wealth management business, 3.6 billion in asset management, and the balance in asset services and custody work for institutional investors.
“What was a nice-to-have diversification became an absolute necessity,” Reyl said, adding that a narrowly focused bank of the same size would find it hard to stand alone.
The bank has also ploughed an undisclosed amount into expanding in Asia and the United States and it aims to set up soon in Dubai, giving it a “springboard” around the Middle East and into Africa.
It does not plan to grow by acquisition, unless it can pick up a team in one go.
It does however plan to expand within the United States – a marked contrast to many other Swiss banks, a swathe of which are paying multi-million dollar penalties to the U.S. Justice Department.
The voluntary U.S. scheme, launched in 2013, allows banks to make amends for helping account holders hide assets from the U.S. tax authorities.
Reyl’s lawyers determined it had no need to offer any U.S. settlement, and Reyl said he was “serene and relaxed” to the point the bank had sought an investment and advisory license in the United States.