To say that there have been a lot of developments in the blue-blooded UK-based bank of Coutts would be a large understatement. And the head of the firm’s private office says he is confident that its strategy is the right one.
Coutts, part of UK-listed Royal Bank of Scotland, has seen a lot of staff changes in the past few months, with departures but also a good deal of additions. Under the leadership of Rory Tapner, chief executive for wealth management, life hasn’t been dull. And Duncan MacIntyre, head of Coutts Private Office, is happy about that.
“We have seriously big growth ambitions to 2015. There is an absolute determination to get this one right. The private office is continuing to grow very strongly; the ultra high net worth market is a big opportunity for us,” he said in an interview at the firm’s offices in The Strand, central London.
This business unit caters to private clients with investable wealth of £30 million ($48.6 million) and more. Coutts has total assets under management of £30.6 billion, according to latest available data.
“We are developing our offering around a contemporary service for family offices. It is a full service – all the way from the chequebook to advisory and investment,” MacIntyre said.
The performance of the Coutts operation as a whole is relatively encouraging, even though it has to contend with economic headwinds along with its peers, not to mention an ever-present burden of rising regulatory and other costs. The wealth arm of RBS, which includes Coutts, recently reported an operating profit before impairment costs of £131 million ($203.4 million) in the six months to the end of June, down from £138 million a year before. Net interest income in the first half of 2012 of £357 million rose from £325 million a year before; total income stood at £593 million, up from £554 million. All in all, a solid set of figures.
Middle East and elsewhere
MacIntyre was keen to talk about a region which – despite any concerns that commentators might have about the “Arab Spring” – is a key driver of wealth.
“We are continuing to expand the business by bringing in more ultra high net worth bankers in the Middle East,” he said. (Late last year, the firm appointed former Merrill Lynch senior manager Amir Sadr as head of the United Arab Emirates market and private office in the Middle East.)
“We’re very excited about the Middle East and have placed greater emphasis on the region as one of our key growth areas.” MacIntyre continued.
To illustrate the pace of change, in mid-September, for example, Coutts said it hired a team of four for its Middle East business, to focus on wealthy non-resident Indians in the region. Earlier in 2012, one of the bank’s most high-profile hires was that of industry veteran Gary Dugan - formerly chief investment officer at Emirates NBD - for the role of chief investment officer for Asia and the Middle East. That appointment came only days after Coutts named Paul Sarosy as head of investment solutions. He was formerly head of UK domestic clients at Credit Suisse.
And the recruitment drive isn’t over yet.
“We have recently completed a new leadership team in the Middle East. We are recruiting in Geneva, London and Dubai,” MacIntyre said.
MacIntyre cited Coutts' appointments of senior bankers across Middle East and its commitment to the Dubai International Finance Centre. “We are prepared to back up our senior appointments with more and more senior talent,” he said.
“We’re interviewing names, Middle East high net worth and ultra high net worth bankers. I think our brand can move very quickly. There will be more advertising in this space this year,” he said.
He travels extensively; in the days after the interview, he was due to be in the region. His travels have taken him to Beirut. In addition to its offices in Abu Dhabi, Dubai and Doha, the firm maintains a number of important client relationships across the region.
MacIntyre said the kind of person who wants to work at the private office cannot come with a “product-push” mentality – clients would not tolerate it.
“The best private bankers are prepared to have challenging conversations with clients where it is not all about product. We in this industry have not [in the past] had that kind of professional standard of behaviour, now we are having it. The smart money is on those who embrace it,” MacIntyre, a former JP Morgan man, said.
Educating the next generation
The role of educating the offspring (aged 21-25) of clients – and hopefully forging a new generation of loyal clients – is a theme MacIntyre warms to.
The firm has run a next generation programme, for example, this year in Singapore with the Wharton Business School, comprising 22 individuals whose average net worth was around a minimum of $200 million. A similar programme was run in 2011. Coutts also looks after a next generation community aged 18-40, running various programmes and 1:1 family sessions.
The focus on education is hardly any sort of marketing spin – Coutts has been holding summer education programmes for the next generation for some time, and even if a fraction of those going through the system decide to sign up to their parents’ bank, that will count as smart strategy. As far as MacIntyre and colleagues are concerned, while there is never room ever for complacency, the momentum of the private office, and Coutts as a whole, is building in the right direction.