As Nordea Private Banking is setting in motion its Asian expansion, Mr Fredrik Lager was recruited in April as the new General Manager. Well-known to the Nordic community in Southeast Asia, Mr Lager is upbeat as he talks to ScandAsia about his new career challenge.
No doubt, Fredrik and his team will be busy going forward. In order to cater to a growing customer base in Asia he expects to be recruiting more private bankers and back office support staff.
”Nordea Private Banking in Singapore is a branch of our international private banking head office in Luxembourg and the strategy we have been tasked to follow is clear: grow the business in Asia! We want to be the private bank of choice for Nordic clients in Asia and the way to get there is to be pro-active and to have a sufficient number of high quality bankers to look after the clients´ best interests. Nordea has identified several strategic markets in Southeast Asia where we will work extra hard to attract new business. In my view, Nordea´s go-to-market-model is strategically sound, both for us as a bank, and for our clients,” begins the Swedish banker/lawyer.
“Singapore remains our core market, but Thailand, Malaysia, the Philippines, Hong Kong and China are all considered important markets where we want to expand our business coverage. Whilst focus is on attracting Nordic clients we are able to take on-board clients of other nationalities as well.”
Compliance and CRS
“Compliance is becoming an increasingly important aspect of private banking these days. To ensure that they are not being used as a platform for financial crime, all banks need to collect detailed information about their clients and continuously keep that information up to date. The regulatory authorities have definitely increased the pressure on banks in the last couple of years and KYC (“Know Your Client) documentation must be thoroughly scrutinized and reviewed to ensure that all clients comply with global anti-money laundering and anti-terrorist financing rules. Transparency is really the key word in international private banking today and we are all subject to ever changing international standards,” he adds.
One of these new standards is the OECD´s ‘Common Reporting Standard’ or CRS for short. Under CRS banks all over the world must report account activities to their local regulators, who in turn will share the information with the tax authorities in the client´s countries of tax residence. CRS will be implemented in Singapore and Hong Kong in 2018.
In addition to CRS, the EU is introducing an update to the Markets in Financial Instruments Directive, better known as MiFID II, aimed at giving clients better protection and more transparency when dealing with banks. Nordea Private Banking in Singapore will apply MiFID II for the benefit of its clients in Asia.
“Extending the MiFID II regulation to our clients in Asia will set us apart from most local and international banks in the region. I believe clients will truly appreciate the transparency in terms of fees, as well as the enhanced client investor protection. My hope is that banks and independent financial advisors outside the EU, including those in Asia, will introduce similar rules on pre/post trade transparency and best execution in due course.”
Expanding the wealth partners team
At the Singapore office, the former GM, Kim Osborg Nielsen, is still very much involved in the expansion strategy. Reporting to Fredrik Lager, he heads up the Private Banking team and leads the day-to-day business of serving clients. His current team consists of Swedish and Danish wealth partners. In addition, the front office team employs an international strategic advisor, focusing on cross-border and related tax issues, as well as an investment counsellor with strong knowledge of the Asian markets.
“To have an investment counsellor in Singapore is a great benefit for our clients. As a complement to our dedicated wealth partners, clients can call him during office hours and discuss what is happening in the markets, get updates on company reports and execute orders. When the markets close in Singapore, clients can continue to call the dedicated Singapore trading number and be passed straight through to the trading execution desk in Luxembourg. In Luxembourg we have traders who are licensed by MAS to trade on Singapore accounts. As a result our clients in Asia have support and trading access to the world markets from opening in Asia to closing in the US,” Fredrik Lager explains.
“We are here to serve clients from all of Nordea´s home markets. We want to hire another senior Swedish banker to look after the Swedish business that we have recently won. Depending on how the business develops we will be looking to attract senior Finnish and Norwegian bankers as well. Like any growing business, we are always on the lookout for competent bankers to join our team,” Fredrik concludes.
As for regional offices he comments: “China and Hong Kong are rapidly expanding markets. Depending on the continued development and in order to serve clients in the North Eastern part of Asia even better, we will evaluate the potential for establishing a local branch to Singapore in Hong Kong.”
“One strong reason for having our Asian private banking hub in Singapore is because the corporate banking arm of Nordea is established there as well. Another reason for having chosen Singapore is the island state´s political stability and strong banking heritage.”
“Hong Kong is an important market for us, mainly due to the large number of wealthy Nordic entrepreneurs living there. They can be active in anything from shipping to textiles to logistics industries.”
Cross-border investments market leader
“There are also hedge fund managers and senior banking executives with a Nordic background who like to keep at least part of their wealth with a Nordic bank. They often have a preference for Nordic investments and appreciate the value a bank like Nordea can offer. Local banks or large Swiss banks are often more expensive when it comes to investing on the Nordic stock markets and they do not have as extensive research on Nordic stocks and shares.”
Nordea claims to be market leaders when it comes to cross-border investments and international wealth planning for Nordic individuals abroad. This private bank’s strong in-house competence for investment management includes over 300 multilingual employees in the Luxembourg headquarters.
“A great benefit of Nordea internationally is that the private banking machinery is a lot bigger than our Scandinavian competitors, including very strong investment strategy and in-house fund teams.”
Nordea is the largest bank in the Nordic region and among the ten largest financial groups in Europe in terms of market capitalization with around 11 million customers, 31,500 employees and 600 branch office locations.
Thailand always important
As for other countries in Southeast Asia, Fredrik Lager comments: “Thailand has always been an important market for Nordea. As a Nordic bank, we are keen to support the various business associations in Thailand and we frequently host and sponsor client events. A substantial part of our client portfolio comprises of Scandinavian residents in Thailand. This includes wealthy retirees in Phuket and Pattaya as well as senior managers at Scandinavian companies based in Bangkok and entrepreneurs, our fastest growing segment of clients in Thailand, many of whom are involved in various IT-related businesses.”
Nordea´s aim is to initiate a banking relationship with the entrepreneur as early as possible and offer expertise in terms of corporate structuring and investment solutions. If and when there is an exit or if the business is generating substantial profits, Nordea Private Banking will of course be there to offer its portfolio management services as well.
“You can´t just sit around and wait for wealth to be created and then simply expect the entrepreneur to open an account – it is important to be supportive throughout the whole life-cycle to secure long-term relationships,” Mr Lager elaborates.
“The Philippines is another strategic market for Nordea, not least because of the level of entrepreneurship among Scandinavians who have settled there in recent years. Gaming, IT and customer support service businesses are really taking off and we have seen substantial wealth being created by Nordic entrepreneurs. Clearly the high level of English speaking proficiency among students and professionals in the Philippines has contributed to the country´s success in attracting international businesses.”
“Asia most interesting business region”
In the Southeast Asian markets as a whole, Fredrik Lager has noticed increasing activity when it comes to mergers and acquisitions between Nordic and local companies.
“We’re seeing that quite a lot of European companies, including companies of a Nordic origin, access the Asian market by acquiring smaller players locally. Buying or merging with a local business is often the key to successfully entering the Asian market, since the business culture in many ways differs from what the business owners in Europe are accustomed to. It’s difficult to come out here and just start something so the M&A segment is developing for sure.”
Looking forward Fredrik Lager is certain that more and more Nordic entrepreneurs and senior executives will establish themselves in Asia. “The markets are developing at a tremendous pace and with an expected middle-class boom in the next 5-10 years, I believe Asia is the most interesting business region globally”, Fredrik concludes.