Rich individuals from Europe and the Middle East are moving money from Switzerland to Asia, said Renato de Guzman, who heads private banking at Oversea-Chinese Banking Corp. after it acquired Asian assets of ING Groep NV.

“It’s a favourable trend,” Guzman said in an interview on Jan 27. He takes the helm at the Singapore-based bank’s unit today after having been ING’s Asia private banking head since 2000. “Having a Singapore bank with no ties to Switzerland is an attractive proposition for a lot of them.”

Guzman, 59, is trying to capitalise on wealthy clients seeking to shift funds from UBS AG and other Swiss banks amid a dispute with the US on disclosing client data to tax authorities. OCBC’s US$1.46 billion ($2.05 billion) purchase of ING’s unit, which tripled its private banking assets, also reflects optimism that Asia’s riches will grow faster as its economies outperform.

UBS Chief Executive Officer Oswald Gruebel said this month in a note to staff that it’s “imperative” Switzerland’s biggest bank halt withdrawals. Net redemptions by wealthy clients at UBS accelerated in the third quarter, bringing the total to 182.9 billion francs ($251 billion) over 18 months and undermining profit at the bank’s biggest division.

The Swiss government is seeking to avoid the re-opening of a lawsuit against UBS as the US seeks information on as many as 52,000 bank clients suspected of tax evasion. A local court ruled last week that an August settlement, in which Switzerland agreed to process data on 4,450 client accounts, isn’t fully enforceable.

‘IT’A TRICKLE’

“We already have a European desk that’s been successful in terms of moving assets from Switzerland to here, serving those really looking for an alternative to Switzerland because of what’s going on there,” said Guzman.

Funds managed for such clients had accounted for about five percent of ING’s Asian private banking assets, he said.

In total, funds attracted from Europe were at most 6% to 7% of the US$700 billion of private wealth managed in Singapore and Hong Kong at the end of last year, said Roman Scott, managing director of Calamander Capital, which advises private banks.

That share will likely shrink as wealthy Asians pour more money into private-bank accounts, he said.

“It’s a trickle, which will never get to be a canal, let alone a river,” Scott said. “If you get a bit of money from Europe or the Middle East, it’ll just be icing on the cake.”

 

Guzman, who oversaw a 24% annual growth rate in assets managed at ING from December 2002 to August 2009, is also betting on Asia’s burgeoning wealth.

The Asia-Pacific region will overtake North America by 2013 in terms of high net-worth individuals’ wealth, according to the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management. The region will grow 12.8% a year, surpassing expansion in North America, Latin America and Europe, from 2008 to 2013, the report forecast.

“There’s still new wealth being created in Asia, there’s a lot of possibilities, and a lot of factors that makes the whole environment very attractive,” Guzman said.

Guzman said he aims to expand the combined OCBC and ING operations by cross-selling banking products and tapping the wealthy in China through OCBC’s six mainland branches and four sub-branches.

SOUTHEAST ASIA FOCUS

The bank may also consider managing private-bank assets in China through so-called onshore operations, Guzman said without giving a timeframe. The nation has the fourth-highest population of high net-worth individuals after the US, Japan and Germany, according to the Merrill/Cap Gemini report.

OCBC’s first priority is to build its business in Southeast Asia, where it already gets 90% of private- banking revenue, Guzman said.

OCBC beat bigger rivals including London-based HSBC Holdings Plc, Europe’s largest bank, and DBS Group Holdings, Southeast Asia’s biggest lender, to acquire ING’s assets in October.

At a briefing to announce the deal at the time, OCBC’s CEO David Conner said “there’s no question” about who would helm the combined business after the Singapore firm, with 50 relationship managers and 2,500 clients, took over ING’s unit, which had 150 relationship managers and 5,000 clients.