SocGen's UK Private Bank Evokes Tradition With Brand Facelift

Tom Burroughes Group Editor London 17 November 2016

SocGen's UK Private Bank Evokes Tradition With Brand Facelift

The private bank, enlarged by the recent Kleinwort Benson acquisition, has a new brand.

The UK private banking arm of France’s Societe Generale, which earlier this year bought the Kleinwort Benson business to create a firm with £16 billion ($19.9 billion) of assets under management, will be called Kleinwort Hambros.

The new name of the group, which highlights two finance family dynasties - Hambro and Kleinwort - is a conscious effort to flag traditional strengths at a time when mergers and acquisitions in wealth management have sometimes seen old names fade away.

The acquisition of Kleinwort Benson from Oddo & Cie in June enabled the business formerly known as Societe Generale Private Banking Hambros to have a snappier name and highlight the contributions of both sides of the business, Eric Barnett, chief executive of Kleinwort Hambros, told journalists at a briefing yesterday at the firm’s offices in St James’s Square.

It is particularly notable, he said, that the deal was executed just weeks prior to the UK referendum on Brexit and that the bank is committed to London as a centre going forward. 

There will be some overlap of roles among the approximately 500 people working in the old SGPBH and the similar number of staff in the acquired Kleinwort Benson business (creating a total of about 1,000), but any job cuts should not be substantial, with departures likely via natural wastage, he said. 

His colleague, John-Francois Mazaud, head of Societe Generale private banking, said the Hambros business has continued to bring in net new money; there has also been an uptrend on the Kleinwort Benson side.

Asked by WealthBriefing if there is a risk of client or staff attrition, as can happen in corporate marriages, Mazaud said that because the businesses shared a “common DNA” and very similar cultures, the risk of such attrition is “marginal”. 

Kleinwort Hambros will be “one of the leading wealth managers in the UK, Channel Islands and Gibraltar”, the firm said in a statement; it has offices in London, Cambridge, Newbury, Leeds, Edinburgh, Jersey, Guernsey and Gibraltar. The new investment product range of the business includes discretionary, advisory, structured and alternative products such as hedge funds and private equity. The firm said there will be additional products for lending, including lending for specialist items such as yachts, jets and real estate, and a bespoke trading platform and dedicated funds research team.

Barnett said growth of the firm’s regional footprint remains a priority, while development of its family office business is also important.

Barnett said the rebrand followed a commissioned independent study; the name appears as Kleinwort Hambros, with the words “Societe Generale Group” underneath. 

The wealth and asset management sector has at times seen old brands disappear – Carr Sheppards, Collins Stewart and Wegelin, to name just a few. Barnett and Mazaud said the focus on two historic names was deliberate. It aims to highlight the solidity and reputation of the business, while the brand continues to refer to the backing of one of Europe’s largest financial groups.

The booking centre footprint of the new business means that it has jurisdictional flexibility in the post-Brexit environment, Barnett said. There are also opportunities for London going forward as a centre able to benefit from a perceived safe-haven status, he said. 

Mazaud said the fact that SocGen had bought the Hambros business in 1998 demonstrated that it did not take a “stop and go” approach to acquisitions and that it was determined to take a long-term approach. In Kleinwort Benson’s case, it has had multiple owners in recent years (Commerzbank, Oddo & Cie, etc.) and the prospect of achieving ownership stability is an attractive one for its clients, he said.

Asked about future growth areas, Mazaud said Kleinwort Hambros intends to expand in the UK regions; its high net worth segment will grow, such as its international, as well as domestic, segment. In time, the firm will be able to consider creating new business segments. For example, it might create a segment catering to clients in lower wealth tiers - although that is not yet a concrete plan - Mazaud said.

Asked how the merger will be used to capture staff productivity and efficiency gains, Mazaud said there are clear benefits from this, but the main point of the deal is to expand the franchise and push up scale. He declined to state explicit financial goals for the new business.


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