Kees Stoute Surveys the North Asian Wealth Management Landscape and Analyses EFG Bank’s DNA

Kees Stoute, CEO for North Asia at EFG Bank in Hong Kong, is a veteran of the Asian wealth management industry. With some 26 years of experience in the region, Kees has lived through the ups and downs of the Asian financial crisis, the 2000 ‘time’ bomb, 9-11, the global financial crisis and the Covid-19 pandemic. But his love of business, culture and life in Asia remains intact, so too his keen sense of emerging trends in the region’s wealth industry. Hubbis ‘met’ with Kees by video call from his Hong Kong base again recently to learn more of EFG Bank’s progress globally and in the region, to hear of the arrival of Jessica Ng from Bank of East Asia to replace Richard Strauss as Head of Private Banking in Hong Kong, to understand more of the bank’s drive to DPM, ESG and digitisation, the search for new talent and the organisation’s unchanged DNA.

Kees opens the discussion by first commenting on the retirement of the Hong Kong Head of Private Banking, Richard Strauss and the arrival of Jessica Ng. “We miss Richard, but at the same time we are pleased that Jessica brings a strong local network and great experience from her 20 plus years with Bank of East Asia,” he reports. “She is really helping us bring on more CROs, with new talent a key platform of our growth.” EFG is somewhat unusual in the wealth market in calling their client-facing bankers Client Relationship Officers, or CROs, instead of the typical Relationship Manager (RM) nomenclature.

Expanding, upgrading and digitising

And alongside the expansion of the talent pool, the bank is continuing to drive digitisation forward, and here he says they have multiple objectives in mind. “I have a background in senior roles at Mees Pierson many years ago in IT and so have an affinity for and interest in this area,” he reports. “We have a variety of key objectives, including the client experience, boosting the CRO’s efficiency, productivity and job satisfaction, better onboarding protocols and outcomes, as well as some other key objectives. This is a significant ongoing investment.”

At the same time, he reports the bank is expanding its higher value-added services, especially wealth and legacy planning and DPM. “The reality is the penetration of DPM in Asian private banking has grown significantly in recent years,” he reports. “In the region we had a very good DPMs penetration for Asia and we are rising rapidly. For example, from 2017, this figure more than tripled, so we have the momentum. Helping us, of course, is the consistently high performance and professional DPM-services over the past few years.”

Bullish on Greater China & North Asia

Kees says the North Asian operations are robust, and the outlook is very encouraging. He addresses the question marks that for some are still hanging over Hong Kong. “We look at the jurisdiction from a very positive standpoint,” he says.

“China is still booming and is an engine of the growth in Asia, and Hong Kong is ideally situated to participate in that, and of course the Greater Bay Area initiatives are also very positive for our type of business. I see far more upside than downside in Hong Kong from a wealth management, business opportunity perspective.”

He elaborates on that view, remarking that Hong Kong’s history, experience and expertise in wealth management is second to none in the region. “Hong Kong remains a pre-eminent financial markets and advisory hub, it remains the conduit for capital and expertise to and from the West, in and out of China, and that bridgehead role will only, in our view, expand in the foreseeable future. The history and the future will combine to give Hong Kong a remarkable edge. In short, Hong Kong remains very attractive for wealth management firms.”

EFG Bank – a Snapshot

EFG International, which is today one of the top 10 Swiss private banks by assets, has undergone a truly transformative journey since its founding in 1995. A major transaction was announced back in 2016 when EFG started the acquisition of one of the oldest private banks in Switzerland, BSI, for nearly CHF1 billion.

Buoyed by that deal, which has now been fully absorbed into the group, EFG has a growing international footprint with a presence in around 40 locations worldwide. Expansion in the Asia Pacific region has been driven both organically and by acquisition, the latest and most notable of which was the 2019 deal to buy control of Australian wealth management firm Shaw and Partners. And meanwhile, the bank continues to build its private banking expertise and reach from its Singapore and Hong Kong banking headquarters for the region.

The bank is a sizable player and offers a broad-based proposition. With assets under management (AUM) of more than CHF170 billion, EFG International is one of the top ten Swiss private banks and is also listed on the SIX Swiss Exchange.

EFG's wealth management offering today encompasses investment solutions (discretionary mandates and advisory mandates), wealth solutions (from corporate finance or succession planning to retirement provision) and financing solutions (including a range of financing facilities to construct investment portfolios).

EFG's group-wide Investment Solutions platform handles all asset management activities and provides global guidance and coordination on advisory and product management, and EFG offers a globally diversified trading and execution business serving sophisticated private and institutional clients as well as many external asset management firms, a key focus area of the bank.

Asia Pacific is central to EFG’s future. The bank continues to develop its ‘Strategy 2022’, which has the Asia Pacific region as core to its vision. As part of this 2022 strategic plan, which it announced in March 2019, the bank is on an ambitious growth trajectory globally and particularly in the Asia Pacific region, exemplified by its strategic acquisitions, such as Shaw and Partners.

Building on EFG's strong base in the region, which has been established over the last two decades, EFG is keen to leverage its strengthened platform and its distinctive value proposition to further strengthen its market position in the Asia Pacific region, supported by its entrepreneurial approach, and its high-quality talent pool of experienced Client Relationship Officers (CROs).

The Talent Games

Kees returns to his earlier observations on the hunt for talent, noting that the whole industry is seeking the same types of high-quality relationship managers, making it tough to close deals.

“Experience and quality are in high demand, as this industry is in expansion mode and people know their price,” he says. “In terms of our edge, we have to focus attention on our strengths, namely financial stability, a highly competitive platform, the entrepreneurial culture with sensible levels of autonomy, and the support of top management for good initiatives and decision making, all within a highly robust regulatory framework. These bankers need to feel sure that they and their clients have the right home, where they can feel safe and also flourish.”

DNA and defining the bank’s difference

Kees concedes that differentiation amongst the private banks is difficult for clients to assess and for the banks to easily convey. “Frankly, we all tend to offer similar services, products and advice,” he says. “But perhaps our DNA at EFG is somewhat different. EFG is a relatively young private bank, but we are already at more than CHF170 billion in AUM, which is remarkable. We have a great story to tell, and it is one of dramatic growth and success in a relatively short time frame.”

He adds that initially the success is predicated on EFG positioning itself as somewhat of a hybrid between a traditional bank and an independent asset manager. “As a banker, you came into EFG Bank, you had the complete infrastructure which included compliance, the systems including access to the best possible products in the world, but you could operate more along the lines of working at an EAM, with latitude – replete with appropriate compliance – to operate in a more individualised and entrepreneurial manner, rather than being circumscribed within some vast global bank with so many layers of rules and decision-making.”

Staying true to the culture

As time has gone on and as EFG has grown so dramatically and as the regulatory environment has become more pervasive, Kees concedes that the business culture has become more similar to other private banks, but that the DNA of the organisation remains as it was, so we have maintained a flat structure and our bankers have that feeling that we support them wholeheartedly whilst giving them the flexibility to manage their business within the bank’s overall business and control framework.”

No discussion is ever complete without the mention of ESG, and Kees does not disappoint in this regard.

“ESG is of course very fashionable but also entirely logical and essential, and from our own organisation’s perspective we increasingly espouse ESG values, and for our clients, we are boosting our expertise, advice and product suite,” he reports.

Key Priorities

Kees rounds of the conversation by focusing on the bank’s missions for the year ahead. “As mentioned, we are hiring more talented CROs and as I alluded to regarding discretionary management, we are intent on increasing recurring income,” he reports. “And there is the ongoing expansion of the digitisation programme. Finally, we are increasingly focusing as I said on ESG investments, which is something that we promote to our colleagues and clients alike.”

Getting Personal with Kees Stoute

Married and with three children - a daughter and two sons – Kees reports they are still really enjoying their time in Hong Kong, although the family have very fond memories of their many years in Singapore.

Their two 19-year-old sons are finishing school in Hong Kong before heading off for National Service in Singapore. They are also enjoying time with their daughter and their young granddaughter. “We love being grandparents,” he says, “and we are still young enough to enjoy it. It really is a lot of fun.”

Kees says they have all come through the pandemic fairly well. In fact, he reports he has become pleasantly accustomed to the lack of racing around airports and endless meetings here and there. “We have enjoyed more time to really enjoy spare time in Hong Kong, which is a stunningly beautiful country, a wonderful location for scenery, seascapes, landscapes and lots of walking.”

He is also especially proud of his success at getting fit again after many years of business travel and putting exercise on the backburner.

“I have become super fit, losing 18 kilos and running at least 10 kilometres at least three times a week,” he says, with considerable enthusiasm. “I can honestly say I am fitter today than 25 plus years ago when I first arrived in Asia. Not only fitter, but I feel so much better in so many ways.”

In terms of his background, Kees hails originally from the city of Haarlem in the Netherlands and was educated in Amsterdam at the Vrije University, obtaining his Master's in Political Science.

Amongst career highlights, Kees re-joined EFG in 2017 as CEO for the bank in North Asia. He had earlier enjoyed five years as CEO for EFG in Singapore until 2012.

Kees has also enjoyed different disciplines in his career. In fact, when he came out to Asia in 1993, he was the regional head of IT at MeesPierson, hence his strong affinity for the EFG digitisation programme. In 1996, he moved on to become the COO of Fortis/MeesPierson in Singapore, and then became regional MD for private banking from 2000 till 2005. From 2005 till 2007, when he joined EFG in Singapore, Kees was the CEO and Chairman of Dryden Wealth Management (out of London), which was then acquired by Fortis and which Kees successfully integrated into the Fortis organisation.

It was particularly in the early years in Singapore that he says he was able to build many of the leadership skills that have helped keep him at the top of his profession for many years and still today.