Kong Eng Huat is a well-known figure in the Singapore and South East Asian private banking industry. This publication recently caught up with him to discuss how this firm's strategy is panning out in Asia.

Kong Eng Huat is a well-known figure in the Singapore and South East Asian private banking industry. Since taking over as the Singapore chief executive at EFG Bank, the Asian part of Switzerland-listed EFG International in January 2012, “Eng Huat”, as he is more commonly known, has been steadily building out the bank's business without as much fanfare as other players can emit.
 
With 25 of top-line experience in the wealth management industry, he has naturally built a network of ultra high net worth clients and seasoned wealth management professionals. Using the former asset, Eng Huat has gradually been accumulating key hires into his Singapore-based teams while also upgrading EFG's banking licence to that of a wholesale bank in March this year. (For more detail on that story, see here.) The latter has been a significant step in what EFG can offer to clients.
 
We spoke with Eng Huat recently to find out more details and what else he had planned for the bank.
 
First of all how many additional hires have you made during this traditionally active hiring season?
This has been sort of a bumper year for us. We have already recruited 10 CROs [client relationship officers] this year and I’m happy to say that I’m in discussion with many more senior bankers who are keen to join the bank.

I think we are getting more interest from senior bankers because we have demonstrated our commitment and growth in Asia. For example we upgraded our banking licence to wholesale bank in March this year. The consolidation and restructuring going on in the private banking industry has also unsettled some senior bankers and created more push factors for them.
 
Does being a “pure play” private bank make it easier or harder to attract new talent?
I think being a “pure play” private bank has differentiated us from the universal banks. In the large universal banks, the private banking units are often used to distribute the products manufactured by the corporate or investment banking units. The pure play private banks are also not constrained by the many different aspirations and limits of other business units within the organization. The pure play private banks have more flexibility in pursuing their strategies and footprint. There is also less client segmentation issues in the pure play private banks.
 
Can you give more detail on your recent hires have they focused on any particular regional market?
Most of the CROs we recruit cover the Asian markets. However, we are beginning to add CROs covering Central and Eastern Europe and Latin America. We are doing this in collaboration and in fact with the support of our colleagues in Switzerland and Miami. They feel that more entrepreneurs are developing business in Asia and also spending more time here. Hence these entrepreneurs would also like to have portfolio investment and private banking accounts in Asia. Singapore, being an established financial centre and wealth management hub is a preferred booking centre.

We have also added on a senior banker and a non resident Indian team in Singapore to facilitate a more coordinated strategy and approach to grow the NRI client segment globally. Again this is a global initiative and we are committed to developing the platform and resources to service the NRI clients.

Have you used headhunters to make these hires or with your deep and wide network were you able to bring them on board and save costs?
We do work with headhunters but of course prefer to recruit bankers that we know personally or had previously worked with.
 
How would you describe the corporate culture in EFG Singapore under your leadership?
The EFG corporate culture is entrepreneurial and not hierarchical. We work together like business partners. We discuss and share as much information as we can and there can be a dialogue between a staff and several layers of management above. This is also the culture that I would like to enhance in Singapore.
 
Do you still manage a book of clients?
No. I have never believed or endorsed a manager supervising RMs to manage their own clients at the same time.
 
Do you travel with your bankers to support them if required?
Yes. In fact I love to meet clients to ensure that they are well looked after and identify if there are opportunities that we have missed. I also like to get feedback on the bank and the competition.
 
How will the upgrading of your Singapore banking licence enhance the EFG offering?
It gives us the added capability for products denominated in Singapore dollar especially to pay interest on Singapore dollar deposits.
 
During the global financial crisis a lot of assets in Singapore and South East Asia were pulled from international private banks and placed with local banks. Have you managed to regain the trust?
Banks that were encouraging their clients to use leverage to enhance portfolio performance were more badly affected. Banks are more closely regulated now, are better capitalized and also have enhanced and repaired their balanced sheet. I think clients are still skeptical that banks will look after their interest first but they are more worried about the markets and the potential downside and volatility. This is demonstrated by their large holdings in cash and bonds
 
With EFG firmly entrenched in Hong Kong and Singapore do you envisage any other Asian offices for the bank?
We actually also have offices in Shanghai, Taipei and Jakarta. I don’t think we need to add more footprints at this point in time.

Many of your competitors are suffering with severe cost income ratios, how does the EFG model address this?
EFG has always adopted an entrepreneurial business model where both management and client relationship officers have their individual P&L and are paid based on their net income and not revenue or assets under management. I think this works very well in keeping the cost income low. Also, adopting an open architecture and outsourcing model to support the business is helpful.

Finally we have seen some retrenchment in the industry - DBS acquiring SocGen's Asia business, for example. What do you think of that - do you think some other non-domestic players might pull out or change how they operate in Asia?
Generally, banks are finding it difficult to grow the business or scale up. Hence they are collapsing their private banks into a larger business unit within the bank like their corporate or consumer bank. Another option is to sell the private bank, which is what SocGen did. Some banks will rather get the 2-3 per cent return from the sale of the business than to continue to maintain the suboptimal business.