Building the Banque Internationale à Luxembourg Global Offering with Strategic Focus on Europe and China
It was back in January 2020, when the world was still spherical that Banque Internationale à Luxembourg (BIL) appointed Hans-Peter Borgh as Group Head International and CEO of BIL Suisse, the group’s private banking subsidiary in Switzerland. He remained a Member of BIL Group’s Executive Committee, where he was in charge of Wealth Management and International Corporate Development. Hubbis met up with Borgh recently via video call to learn that his move was part of an ambitious growth plan for its international wealth management business, which is managed from its two main private banking hubs in Luxembourg and Switzerland. Borgh reported that he is energised by the challenge of building the bridge between Europe and Greater China at BIL, which since 2017 has been 90% owned by Hong Kong listed and China headquartered diversified investment group Legend Holdings. He explained how he is helping BIL forge ahead with zeal to build its wealth management coverage, with a keen focus on wealthy entrepreneurial Mainland Chinese private clients keen on diversification of advisory, investment and broader wealth management activities in Europe.
BIL was acquired by Hong Kong-listed Chinese investment group Legend Holdings in 2017, since when the wealth management business has been refocusing on Greater China, to leverage the strong Mainland China access and connectivity, and the European history of BIL, as well as its historical expertise and reach in Eastern Europe and the Middle East.
The appointment of Borgh in January 2020 to his current role as Group Head International, and CEO of BIL Suisse, the group’s private banking subsidiary in Switzerland, is part of a major effort to strategically refocus the business and to boost the skills, focus and reach, with a particular emphasis on supporting Greater China clients in their wealth management needs.
As well as a number of other important new hires since 2019, BIL in early 2020 acquired an independent wealth management business in Hong Kong run by an ex-UBS veteran private banker and expert on China, Betty Tsui, which was re-named BIL Wealth Management Limited.
In addition to expanding BIL Wealth Management Limited in Hong Kong, the bank has opened a Representative Office in Beijing and established dedicated wealth management China desks in Luxembourg and Switzerland. The expanded network will connect Luxembourg, Beijing, the Hong Kong/Greater Bay Area in China and Switzerland for HNW and UHNW Chinese clients, in particular.
The other core BIL business in the Chinese market today is helping Chinese companies and investors expand in Europe with all kinds of financing solutions. BIL has historically been particularly strong in real estate in more than 10 countries across Europe.
Borgh now wants to expand the talent pool, boost the Hong Kong operation and visibility, and to further develop what he calls the ‘hybrid entrepreneurial offering’ combining wealth management and selected corporate finance capabilities.
Borgh concludes that the unique proposition of BIL’s historical strengths and current areas of expertise, along with the deep and growing understanding of and connectivity with China should help propel the firm dynamically forward on the next leg of its exciting journey.
China’s Legend Holdings bought control of Banque Internationale à Luxembourg (BIL) from Middle East interests in 2017, since when there has been an accelerating drive to re-shape the bank’s wealth management activity to focus on international growth including Greater China, where Legend have such depth of knowledge and contacts.
Since 2019, it has been an especially busy time in Asia for BIL with a number of important specialist new hires to build out the private banking offering, including Hans-Peter Borgh taking up his current role in January 2020 at BIL Suisse, one of the two main private banking hubs of BIL, and the entity that drives the group’s international wealth management activities.
Borgh’s mission is to help the business develop strategically, focusing on boosting the offering and the infrastructure for the bank to better serve its private clients, many of whom are entrepreneurs, from Eastern Europe and CIS countries, from the Middle East, Western Europe, and most importantly from China, where more and more clients are coming from, partly thanks to the powerful Legend Holdings connection since 2017.
“My arrival was part of some fairly ambitious international growth plans for BIL and the bank has continued to build out its talent, expertise and reach since then,” Borgh reports.
The Europe-China axis
In particular, the main shareholder, Legend Holdings, a Chinese investment holding company with interests in finance, information technology, agriculture/food and innovative services has been helping BIL ramp up its services for Chinese clients. In addition to expanding BIL Wealth Management Limited in Hong Kong, the bank has opened a Representative Office in Beijing and established dedicated wealth management China desks in Luxembourg and Switzerland to help the bank create an international service network and dedicated expertise.
Once completed, this network will link up Luxembourg, Beijing, the Hong Kong/Greater Bay Area in China and Switzerland to provide the growing ranks of Chinese clients with a global and diversified package of financial and wealth management services.
Building expertise, building reach
After Borgh joined, Hanzhi Ding arrived in May 2020 as the new CEO of BIL Wealth Management Limited in Hong Kong, coming over from Huatai International, a leading Chinese investment bank in Hong Kong and the global arm of China’s top-ranked financial group.
In February 2020, BIL had bought over Sino Suisse Financial Group (Hong Kong) Limited, founded by Private banking veteran Betty Tsui, and that then became BIL Wealth Management Limited and the main platform henceforth for the group’s wealth management activities in the Hong Kong/Greater Bay Area.
Another important move came later in 2020, when BIL Suisse appointed Hartmut Vollmer Head of Wealth Management Growth Markets, with coverage responsibilities include encompassing China, Eastern Europe and the Middle East.
Speed and focus
“You can see the pace and commitment of our expansion and refocusing,” Borgh comments. “We continue to hold high growth ambitions for our wealth business, and it was essential for us to strengthen our management team, and this series of additions, including hopefully myself, is designed to strengthen us at all the key top levels in BIL. We believe we have made really major high calibre moves that will take us to the next level of development.”
BIL is the oldest bank in Luxembourg, starting out in 1856. It actually had a branch for many years in Singapore, but that was closed some five years ago. “These days,” Borgh reports, “Asia for us is really limited to Greater China, in other words, the mainland, Hong Kong and Taiwan and the reason for that is the acquisition of the 90% stake in BIL Group by Chinese corporation Legend Holdings, a deal announced in September 2017. China has since then essentially become our second home market to develop for the future.”
Creating new connections
Legend Holdings itself is a Hong Kong listed diversified investment group based out of Beijing, perhaps best known internationally for controlling Lenovo and for the past four years owning BIL.
“It was entirely logical to develop BIL with coverage capabilities in the China market,” Borgh comments, “Aside from the hires, we opened a representative office in Beijing, and then the Sino Suisse deal brought both a solid EAM operation and also Betty, an ex-UBS veteran, who has added her expertise and range of contacts to help us now turn BIL Wealth Management Limited in Hong Kong into a larger, more dynamic and more focused business, which is going well.”
Borgh reports that BIL now has what it considers quite unique access to an ecosystem of Chinese entrepreneurs and explains that, given the various activities and reach of Legend Capital and Hony Capital and other Legend companies into the Chinese entrepreneurial space at large, BIL has been developing a rather unique and very interesting offshore China-focused wealth management offering, also supported by the representative office in Beijing.
Piecing it all together at BIL
“From a client servicing point of view, this is very much built around the Hong Kong subsidiary, and really well supported by the China desk in Zurich, as well as the satellite China desk in Luxembourg,” he reports. “Offshore wealth management for Chinese entrepreneurs is therefore the first step in BIL's China journey.”
The second core BIL business today is offshore corporate finance and corporate lending, which is booked out of Luxembourg and Switzerland. “We help Chinese companies who are coming to Europe with all kinds of financing solutions,” he explains. “And in the longer term, we hope to develop our rep office in Beijing into a broader banking presence at some point in mainland China, and slightly nearer term to extend our reach from Hong Kong into the wider Greater Bay Area, with an office in Shenzhen.”
BIL advances where others have retreated
He observes that in a context where many European banks have retreated from Asia, BIL has actually entered Asia, but highly focused on Greater China, especially Mainland China and anyone operating investments and financing offshore.
“We definitely have unique access to many valuable potential clients and we now are increasingly involved in a deep ecosystem that we can play a significant role in,” he enthuses. “Totally, we now have around 20 people on the wealth management side and a slightly smaller number on the corporate side, and we are building around that, bringing in specialist China knowledge in all the key support areas, be that investments, risk management, credit, compliance, and so on. In short, this is really just the start of a long and exciting journey we see ahead.”
Offering a diversification play
Diversification of booking protocols via Europe, diversification in terms of product access, diversification of risk, diversification of funding alternatives, all these, he reports, play a role in the value proposition for clients the firm targets.
“BIL has historically been particularly strong in serving entrepreneurs with the combination of wealth and lending offer,” Borgh elucidates. “We finance real estate in more than 10 countries across Europe, whether this is London, Paris, Switzerland, the mountains, the Côte d'Azur. You name it, we can do it.”
Small enough and large enough
But the real value proposition he describes for BIL for its Chinese clients would be that the firm is small enough to care, big enough to matter and that BIL offers genuine China insider knowledge and connectivity.
“We offer far more sophisticated China understanding and a deeper China-centric ecosystem than such Mainland clients would expect from what is historically a traditional type of European bank,” he reports. “This is a major advantage to span both worlds, particularly for the clients we aim to serve, as our sweet spot is the very high net worth individuals, not necessarily the ultra-HNW billionaires, but the entrepreneur very wealthy type clients who want to expand their investments.”
He also talks briefly about the Middle East connection, where the former majority shareholder of BIL was from. “That history in the region gave us a good experience and a solid base there,” he reports. He adds that as to the Eastern European connection, some countries there have long been growth markets for private banking out of Switzerland. “So, these are our core areas of focus, Europe, Eastern Europe, the Middle East and of course most importantly for the future, China and Greater China.”
The expansion of the talent pool is his first mission, Borgh reports, especially as the firm is transitioning its business and focusing intently on what he describes as the ‘Marco Polo’ route of wealth management.
“We are historically a traditional Luxembourg private bank that focused on Europe and we are rapidly transforming our model,” he comments. “As both group head of the international business of BIL that includes China, and also CEO of our Swiss bank and on the group executive board and running Hong Kong as chairman, I see the big picture, and I know that a deeper array of skills and expertise are essential for the next legs of our journey.”
His second priority is to significantly develop the Hong Kong presence. “We have integrated the Sino Suisse business that we acquired in early 2020, we are currently expanding our capabilities there, for example aiming to launch our own China specialty funds managed out of our Hong Kong office,” he reports. “We are open architecture in terms of approach, and we will maintain that, but to specialise in China we also need to develop our own product capability.
The third priority is the development of what he calls a ‘hybrid entrepreneurial offering’ combining wealth management and selected corporate finance capabilities. “We have invested in a corporate finance and a structured finance team, located in Switzerland, but of course also in Luxembourg,” he reports.
“We are able now to serve entrepreneurs on both sides, on their private wealth side, but also on a limited basis on their corporate side, especially for Chinese entrepreneurs who are looking to Europe and may need help in structuring an acquisition or structuring assets in Europe and especially help with the financing.”
By way of example, he reports that they recently launched green bonds on the Luxembourg Stock Exchange via BIL Switzerland, effectively helping a client investing in a clean energy project in Poland. “We helped to raise funds for his project by issuing the bond available to external investors or our own clients,” he explains. “That is an example of the hybrid type approach, where we bring corporate finance and private banking expertise together on an integrated basis.”
A somewhat unique proposition
He closes the conversation by commenting on the value proposition that Luxembourg represents. Switzerland is very well known in Asia, but Luxembourg less so, he observes, but notes that Luxembourg is one of the most important historical centres for wealth management and the most important hub within the EU. Surprisingly to some, he adds, after the US, Luxembourg is the largest jurisdiction in the world when it comes to funds, and has developed a unique ecosystem around the industry, enabling wealthy individuals and wealthy families to use very modern and innovative and sophisticated wealth structuring solutions.
“These elements are major differentiating factors for our Greater China clients,” he says on closing. “And I should also note that eight of the largest Chinese banks have their Eurozone HQs in Luxembourg, starting with Bank of China more than 40 years ago. In short, Luxembourg has some great advantages created over a long time and serves as an outstanding bridge to China. We are building our platform on our history and on our current structure, ownership and specialist areas of focus and expertise.”
Getting Personal with Hans-Peter Borgh
Borgh, a Dutch national, took up his current role with BIL in Zurich in January 2020. He had joined BIL in November 2015, working out of Luxembourg.
Prior to joining BIL, he was Chief Commercial Officer for Private Banking Asia & Middle East at ABN AMRO. He started his career at ABN AMRO in 1997 where he held different positions in retail and private banking in Europe, including Switzerland, and also spent two and a half years at ANZ Banking Group, which had bought the ABN AMRO wealth business, as Regional Head Affluent Banking Asia Pacific. He holds a Master’s Degree in Business Administration.
“I was 14 years in Singapore and Hong Kong before taking my current role,” he reports. “I hope that with my background, I am well suited to help BIL achieve their goals and to help make the connections that will see us expand apace,” he says.
He was born in Bilthoven in the Netherlands and educated through to attending university in Groningen, where he obtained his MBA with a thesis on the Asian debt markets.
He then finished his studies with internships in Singapore and has not returned to live in Holland since. “ABN-AMRO at the time in the late 1990s sponsored me for the thesis and I moved to Singapore, and that was the start of my exciting journey in Asia,” he recalls, reflectively.
This all led naturally to him taking up a role as graduate trainee on the capital markets and securities side at ABN AMRO when it was still a global bank being based in London, New York and Hong Kong. He then moved with the bank to private banking in Switzerland in 2001, later being offered a return to Singapore in 2004 with ABN AMRO. And after stints at both RBS and ANZ, he returned to ABN AMRO before joining BIL in Luxembourg in 2015.
“That phase gave me invaluable experience in regional roles,” he recalls. “I was Head of Wealth Management in Singapore for RBS for nearly three years, and enjoyed a similar length spell with ANZ as the Head of APAC for affluent wealth management, with 21 countries in my responsibility across Asia-Pacific. ANZ in particular gave me the opportunity to connect professionally all over Asia and truly appreciate the diversity of the region. I love being back in Zurich now, but also love the very strong Asia and Greater China connection. Asia is very much in my blood.”
Borgh is still single and from his base in Zurich enjoys trips to ski in the Alps. “We are very lucky here, as I've been able to do that nearly every weekend this year through the pandemic,” he reports. “Actually, my favourite ski resort is Megève in France, because that's where we have a family home, but due to COVID restrictions, I had to find a new favourite place in Switzerland this year, which is Klosters. And right now, I am talking to you from Italy, enjoying some golf, which I have rather neglected since I left Singapore.”
He says that lockdown has made him realise that he had perhaps had some form of jetlag almost permanently for many years without realising it. “Perhaps the greatest discovery for me has been how great it is to not feel that anymore,” he quips. “And it is so nice to sleep at home most of the time now and have time for personal fitness.”
More from Hans-Peter Borgh, Banque Internationale a Luxembourg