Best Private Bank – FX Advisory BNP Paribas Wealth Management

Shafali Sachdev head of FX, Asia, BNP Paribas Wealth Management

BNP PARIBAS WEALTH MANAGEMENT

2019 was a year marked by dramatic changes in BNP Paribas Wealth Management’s foreign exchange advisory business with numerous enhancements and improvements to its platform, sealing its leadership position in the industry.

Against a backdrop of a U-turn on US interest rates and the resultant changes in currency views, BNP Paribas Wealth Management managed to remain one step ahead of the market in its calls. Its focus on cross-market linkages, volatility, and positioning, apart from just spot levels, allowed it to make sure that its trades presented not just a call, but the smartest way to express the view. This was reflected in its track record: as of the end of 3Q, the bank had come up with 112 trade ideas, with a hit ratio standing as high as 87%.

One of the biggest FX calls BNP Paribas Wealth Management made last year was to buy gold, both on a cash basis and through structures designed to capitalise on volatility. For example, in February, the US Fed Chair pivoted on interest rates using language that the French bank interpreted as dollar negative. The bank suggested clients play the move using a proprietary ‘buy gold propulsion structure’, which successfully achieved clients’ full profit target within 9 days of entering the trade. Another call worth highlighting was the bank making use of the increased volatility and distorted skew around Brexit to enter a ‘GBP/USD skewed structure’. This call knocked out in one week, with clients receiving the entire profit target immediately with a deep discount to market price.

Bearing in mind the philosophy of “offering clients solutions rather than trades”, BNP Paribas Wealth Management’s FX investment advice goes beyond the directional calls. It is based on its thorough understanding of clients’ objectives and customised to their portfolios in order to optimise clients’ capital usage. The offering of the bank is spread across

“We’re very honoured to be named the Best Private Bank – FX Advisory by Asian Private Banker. 2019 was a year of dramatic changes in our Foreign Exchange Advisory business at BNP Paribas Wealth Management Asia, as we refined our Advisory model. We strongly believe that one size does not fit all, and are particularly proud of our solution-driven approach. We are grateful for the enthusiastic support from our clients for our enhanced platform and offering.”

- Shafali Sachdev, head of FX, Asia, BNP Paribas Wealth Management

the full spectrum of clients: from gamma trading for institutional-like investors to FX embedded in capital protected structures for risk-averse clients.

As a key enhancement made to the advisory offering last year, the bank designated a dedicated FX advisor for its sophisticated clients, in order to provide them with customised, institutional-type, solution-driven coverage and services. Additionally, core clients were able to get advice from an up-skilled RM team, supported by digital tools with additional access to a dedicated FX advisor. In 2019, the firm launched an FX digital transformation project, allowing RMs to directly price and execute linear products on FX and access live pricing on exotic options and structures, without depending on the FX desk.

Undoubtedly, the unrivalled FX platform with a dedicated team resulted in remarkable business growth, with revenues from direct access advisory nearly doubling in 2019, serving as the largest growth engine for the bank’s FX business.

BNP Paribas Wealth Management is Asian Private Banker’s choice for Best Private Bank – FX Advisory.

Edward Moon regional head of alternative investments, Asia HSBC Private Banking

HSBC PRIVATE BANKING

Rich valuations of public markets in 2019 kept pushing high net worth individuals to gain exposure to private markets and, more broadly, alternative assets. Yet few private banks could showcase their capability as well as HSBC Private Banking did in 2019 in terms of guiding clients to build up exclusive, best-in-class alternative portfolios with a tactical focus on the late market cycle.

By making the most of the bank’s partnership with HSBC Alternative Investment Limited, the bank secured exclusivity for 75% of private market funds and 50% of hedge funds that were launched in 2019. Instead of taking a lot of directional and high liquidity risk, those bespoke solutions had an undue focus on downside protection during market dislocations, in a bid to better help clients navigate a volatile investment climate.

On its alternatives platform, rather than broadly stuffing its product shelf, the bank maintained a strong bias towards those best-in-class champion strategies in each category. In 2019, HSBC Private Banking launched 10 private market funds and hedge funds covering four major themes and ideas: US focused equity long short hedge fund, core hedge fund, Vision 2019 (a diversified private equity portfolio across primary, secondary and co-investments), and a global secondary fund.

A rigorous due diligence process and high standard in selectivity pays off. The bank’s core hedge funds portfolio recorded a 6.98% of alpha against MSCI World Index over the past 12 months and delivered an impressive 2.34 of Sharpe Ratio versus MSCI World’s 0.55. The strong relationship with managers also enabled the bank to win meaningful fee discounts for clients. This strong performance as well as the favoured terms led the bank to receive a record high inflow of the region’s wealth last year.

Bearing in mind that Asian investors remain green in terms of investing in alternatives compared to those traditional long only assets, HSBC Private Banking

“We are very honoured to be named Best Private Bank for Alternative Advisory by Asian Private Banker. HSBC Private Banking takes a differentiated, high conviction approach for our alternative advisory platform and the commitment to excellence shown by our entire team, our colleagues and our partners has paid off with an exceptional 2019 performance. We are thankful for the trust and support from our valued clients and we will continue to invest in and deliver best-in-class products and services across Asia.”

- Edward Moon, regional head of alternative investments, Asia, HSBC Private Banking

kept enhancing its digital distribution platform to provide a one-stop shop knowledge platform for clients. Additionally, in 2019, the bank organized over 10 educational events with reputable hedge funds and private equity managers, which gained tremendous positive feedback from clients.

For these reasons, HSBC Private Bank is Asian Private Banker’s choice for Best Private Bank – Alternative Advisory in 2019.

Lewis Wong co-head of the Asia Pacific Financing Group, Credit Suisse

CREDIT SUISSE

Asian investors’ risk sentiment slowly picked up in 2019 as the financial market showed continuous resilience in its recovery. Credit Suisse Private Banking capitalised on its APAC Financing Group, providing clients in the region with an integrated platform along with a holistic solution for trading, risk management, structuring and syndication.

Drawing on Credit Suisse’s global resources, its ‘Bank for Entrepreneurs’ strategy delivered integrated private banking and investment banking advisory and solutions to UNHWs, entrepreneurs, corporate clients, and institutional investors. It supported clients’ various financing needs across different business stages — from loan inception and restructuring to investment and loan position building, from performance and covenants monitoring to periodic portfolio and facility review.

On top of the bank’s bread and butter financing solutions across structured financing, real asset lending, and flow lending, Credit Suisse launched partial return swaps in 2019 as a new offering to supplement client portfolios and enrich its financing platform.

Numbers speak for themselves. Credit Suisse’s credit advisory business delivered double-digit adjusted returns on capital for full year 2018 and 2019, as the bank further entrenched its market position with dominant franchises across its investment banking and private banking businesses.

Additionally, streaming from the wide spectrum of lending activities — spanning structured credit lending, share-backed and margin lending, real estate financing, real assets lending, Lombard lending, and portfolios financing — the credit business recorded significant, robust and steady revenues for the bank. This reflects the resilience of its wealth management strategy and its leading business franchises in the region, despite a rather challenging and volatile market climate.

“Receiving this award is a testament of the strength of our best-in-class credit advisory business and our unique Asia Pacific Financing Group. Our ability to offer and execute innovative financing solutions quickly to our entrepreneur, ultra high net worth, private banking, corporate, and institutional clients is unrivalled and is what gives Credit Suisse the winning edge.”

- Lewis Wong, co-head of the Asia Pacific Financing Group, Credit Suisse

Credit Suisse’s customised and balanced lending solutions with swift execution backed by strong commitment from senior management and collaboration from stakeholders did not go unnoticed by clients, who provided excellent feedback on the bank’s financing engagement and proactive risk management.

Credit Suisse Private Banking is Asian Private Banker’s Best Private Bank – Credit Advisory for 2019.