The logo of Liechtenstein's LGT bank is seen at a branch in Zurich, Switzerland August 29, 2017. REUTERS/Arnd Wiegmann
August 29, 2017
By Joshua Franklin and Angelika Gruber
ZURICH (Reuters) – Liechtenstein’s LGT Bank, owned by the mini-state’s ruling family, hopes to stand out in Asia’s crowded private banking market by touting the clan’s own track record of preserving wealth.
LGT is trying to tap into Asia’s emerging ranks of millionaires and billionaires, a similar strategy to bigger rivals like UBS and Credit Suisse. But unlike LGT, they don’t have a prince as CEO.
“In Asia I am asked very frequently: how did your family manage to transfer the wealth over generations?” LGT Chief Executive Prince Max von und zu Liechtenstein told Reuters in an interview.
“For Asia – where the money tends to be new or more recently generated – that is a big issue for them to get right.”
Max is the second son of Crown Prince Hans-Adam II, whose family has ruled Liechtenstein, a principality of just 38,000 people sandwiched between Switzerland and Austria, since the country’s formation in 1719.
LGT signalled its intent to expand in emerging economies last year when it bought ABN Amro’s private banking operations in Asia and the Middle East, which came with $20 billion in assets.
Max left the door open for further acquisitions, saying the bank “will continue to scan opportunities”.
In 2016, Asian Private Banker placed LGT 15th on its league table of biggest private banks in the region by assets with $29.1 billion.
Earnings posted on Tuesday showed LGT’s overall assets under management for private and institutional clients swelled 19 percent year-on-year to 181 billion Swiss francs ($189.71 billion) thanks to the ABN acquisition and 9.6 billion in net new money. Net profit rose 22 percent to 151.8 million francs.
“PLENTY OF RISKS”
The Liechtenstein family’s holdings include Austrian palaces and a winery, and in 2011 Forbes dubbed them Europe’s richest monarchs. Swiss magazine Bilanz in 2016 pegged their net worth at 8.5 billion Swiss francs.
LGT is keen to play up its bloodline across the business and central to its offering is a private equity-heavy portfolio that closely matches the investment strategy of the Liechtenstein family.
“It is called the Princely Portfolio,” said Max, a Harvard-educated 48-year-old who started out in banking as an investment analyst at JPMorgan in New York.
Stable family ties can be a strong selling point in Asia, where wealth managers sometimes display a Qing Dynasty scroll in their offices with an inscription meaning “three generations under one roof, five generations of prosperity”.
With political tensions still high and sub-zero interest rates in Europe, Max is keeping a cautious outlook, however.
“At this point we are on a very promising track,” he said. “But as we have all learnt, things can turn very quickly. There are still plenty of risks around.”
($1 = 0.9541 Swiss francs)
(Reporting by Joshua Franklin; Editing by Michael Shields)