Global wealth and asset manager Lombard Odier today opened a branch in Abu Dhabi, becoming the first Swiss private bank to have presence at Abu Dhabi Global Market (ADGM), the UAE capital’s international financial centre, as the bank focuses on sustainable investment and broadens shariah-compliant offerings, its chairman said.

“Sustainable investing is going to be for us the single most attractive source of future income or future return of portfolios,” said Patrick Odier, chairman of the board of directors at Bank Lombard Odier & Co in an interview with Zawya in Abu Dhabi.

“We see that the coming years have fantastic opportunity for international investors, including those based here, to benefit from that,” he added.

According to Odier, investors are recognizing that they can achieve returns through sustainable strategies that are at least as good as conventional investment products. (Read more here).

“Sustainable investing is creating excess return and we want to demonstrate that by full transformation of our investment process incorporating not only ESG (environmental, social and governance), but also understanding of the sustainable trends that are going on in the world,” he said.

Earlier this year, Abu Dhabi Financial Services Regulatory Authority (FSRA) announced plans to introduce standards of financial disclosures for ESG criteria for relevant entities at ADGM. FSRA’s CEO Richard Teng told Zawya that the centre is working on the adoption of a taxonomy, which is a standardised set of classifications for such investments, in its regulatory framework. (Read more here).

“The fit between Abu Dhabi regulation and the community in general and ourselves are particularly good because ADGM has a chance to jump over a number of steps in comparison to other financial centres that have a huge legacy to deal with before they can even think of new legislation in this aspect (sustainable investing),” Odier noted.

“We see interesting alignment between the shariah mandates and our tradition of sustainable investing, and if you add to this technology aspects that are possible today, Abu Dhabi is absolutely ideally positioned to have in its financial centre a firm like ours,” he added.

In June last year, the bank announced the launch of a full range of shariah-compliant investment solutions, which were the first Shariah-compliant discretionary mandate in its history. (Read more here).

Commanding returns

“Today, the total assets under management of the bank are roughly around 275 billion Swiss francs,” Odier told Zawya.

“In 2018, due to the turbulences in markets, total clients’ assets went down. At the end of the year, the total assets were 259 billion Swiss francs, and you can see that we recuperated all that decline during the last three months,” he added.

The recovery means that Lombard Odier’s assets under management have returned to 2017 year-end levels, when the bank had 274 billion Swiss Francs of client assets under management. (Read more here).

In March this year, the bank announced financial results of 2018 with consolidated net profit, excluding one-off items, rising by 13 percent to 165 million Swiss francs, up from 146 million Swiss fancs in 2017.

“We got very productive new money in particular in the private clients sector and everywhere in the world. We were also very restrictive on the costs which grew far less than revenues, which explains why profit increased by 13 percent,” Odier said.

Looking into 2019, Odier said that it was difficult to predict how the company would perform as “one of the things we don’t predict for our firm is the market performance”.

“So if you take it without the market performance, we are counting on a growth which is industry standard of roughly between 3 and 5 percent of our assets when it comes to private clients. And we think as we were last year and the year before, we can continue to be in that target for 2019,” he said.

Moving into Saudi?

On whether the bank is looking into expanding into Saudi Arabia, Odier said that “it’d be pre-mature to think about it at this stage”. 

“As we are opening here in Abu Dhabi, we’re happy to take it as a core strategic priority, and then see how to expand in the rest of the region,” he added. 

In June last year, Reuters reported that the Swiss bank is in talks to set up a partnership with a Saudi bank. (Read more here).

The Geneva-based bank has had a representative office in Dubai for the past 12 years.

“We have traditionally utilised our UAE presence as a hub for the entire region. We have for 223 years grown very organically, so we want to do it step by step,” Odier said.

“The licence that we’re getting here (in Abu Dhabi) would allow us to advise our clients when it comes to international investments, and the management itself is going to be done according to our existing expertise in Switzerland in particular, but also in other parts of our group,” he said.

“The cluster effect for us in Abu Dhabi counts a lot. Not only do we need to have good balanced regulations, but we need to have tech oriented services, good legal and jurisdictional type of services to have other expertise in asset management. I think we have this in Abu Dhabi,” he added.

(Reporting by Nada Al Rifai; Editing by Michael Fahy)


© ZAWYA 2019