Mignonne Cheng, chairman and chief executive officer of BNP Paribas Wealth Management in Asia Pacific, talks to Hubbis about her outlook and strategy for 2012 against the backdrop of one of the toughest periods for the industry in its history in this region.
Date: Feb 3, 2012
What is your strategy for 2012?
BNP Paribas Wealth Management will reinforce the three main strategies that we launched in 2011.
First, in terms of market approach, we will continue to enhance our understanding of market-specific client needs, regulatory requirements, and therefore to best service clients.
We now divide the region into six markets: Hong Kong; Taiwan; China; Singapore / Indonesia / Malaysia; India; and international and other Asian markets.
Thirdly, we want to further promote cross-selling between our corporate and investment banking and wealth management divisions.
What are the main opportunities and challenges in Asian wealth management and private banking?
The growing and robust Asian economy provides the private banking industry with huge opportunities. In the meantime, the increasing competition, regulatory requirements, and operating cost together with the talent war, are some of the key challenges.
BNP Paribas has been in China and India for more than 150 years, in Hong Kong and Singapore for around 50 years, and in Taiwan for around 30 years. Our deep roots and extensive network in the region are a strong foundation for us to overcome these challenges and capture the opportunities in the region.
What does it take to deepen relationships with existing clients?
The wealth management business is first and foremost relationship driven, and a lot depends on the relationship between the client, the relationship manager, and the bank.
To strengthen client relationships, there needs to be deep understanding of clients’ needs and risk tolerance, transparent and regular communications, and a client-focused approach.
The banker needs to be able to balance carefully the act of trying to bring in business for the bank whilst not compromising on the interests of the client. Listening is also important and will help to create an excellent relationship from a good one.
BNP Paribas Wealth Management services its clients based on a three-fold and integrated approach:
What is your outlook for 2012?
We worked closely with our clients to preserve their wealth in 2011’s volatile market. Various products and markets were also introduced to our clients as alternatives to diversify their portfolios. Despite the crisis, BNP Paribas has proven resilient and remained one of the top-ranked international banking groups in 2011.
For 2012, we are cautiously positive. We expect the global economy continue to be slow and volatile, especially for the Eurozone and US. However, certain markets will be more resistant to deteriorating economies and we remain positive on markets such as China and India where domestic demand remains strong.
We recommend short-dated investment-grade corporate bonds, stock picks with high dividends, discretionary mandates, funds and structured products. Smaller Asian equity markets have proven resilient and may continue to do so in 2012. Asian convertible bonds are worth exploring on valuation ground.
Asset allocation, diversification and risk management will be key for 2012. BNP Paribas Wealth Management divides client portfolios through investment pockets called preservation, opportunities and dynamism.
The proportion of the assets in the client portfolio allocated to each of the pocket is based on client’s behaviour as an investor, in particular by clients’ needs for liquidity, knowledge of financial markets and capacity to bear risk. We have a very strict grading scale for products to ensure we exercise risk management appropriately.