Patrick Odier: «We Have No Intention of Selling Asset Management Unit»

Patrick Odier, Senior Managing Partner at Lombard Odier

Patrick Odier, Senior Managing Partner at Lombard Odier

Patrick Odier, a managing partner at Lombard Odier private bank, is keeping a close eye on the consolidation in banking. He has the necessary capital to make an acquisition but doesn't rule out alliances with independent wealth managers either. In an interview with, he makes clear that the Asset Management unit will see further investments.

Mr Odier, last year assets under management rose only in the technology and banking services unit, while private banking and asset management at Lombard Odier stagnated. Aren't you concerned?

No. We recorded encouraging new money flows in all three business segments, in a year, which was far from easy. Remember the lifting of the floor value of the euro in mid-January 2015, which led to a massive appreciation of the franc. With two thirds of our clients assets denominated in euro or dollar, this had an immediate impact on our result. The turbulence on the markets in the second half of 2015 also had a significant influence.

The Asset Management division, your business with institutional investors, is now smaller than the technology unit and barely profitable. Rumors had it that you were about to sell Asset Management. Correct?

We have absolutely no intention of selling the Asset Management unit. The business for three reasons is very important for our business development: First, we need this competence to serve important private clients apart from institutional investors. Second, this segments helps us to attract highly qualified staff who increase our know-how in this field. Third, Asset Management allows us to expand into new markets or extend our presence.

So where do you want to go?

Where there are big institutional investors, pension funds, state funds – which includes the Benelux countries, Scandinavia, Great Britain, but also Switzerland.

In comparative terms, Lombard Odier Group with 80 percent has a high cost-earnings-ratio. Why is this?

The long-term investments of our technology unit to begin with are a cost factor only, because we can't discount goodwill and the revenue from our platform partners is expected to follow later. We offer the services of this business to almost a dozen other financial services institutions – the Geneva-based private bank Bordier has joined only recently.

If you look at our core business only (private banking), we have a cost-earnings-ratio of 72 percent. That's a very good figure, which proves that we have our costs under control.

A lot of Swiss banks are setting up branches in Asia. In your year-end report you don't even mention this. Why?

For a long time, we have been cautious in Asia and were mainly present through representational offices. Meanwhile, we've changed this and are now making big strides in terms of new money in Japan and Singapore. In Hong Kong, we were slightly below expectations, but now we are on the right way there too.

Is China something for you?

Not at the moment. The development there is highly volatile, which doesn't conform with our philosophy. We want to offer our clients stability. But obviously, we are keeping an eye on the development.

Keeping an eye on the development is evidently also something you need to do in respect to the consolidation of Swiss private banking. When will you make your first acquisition?

Core of our strategy was and remains organic growth. We are keeping a close eye on the consolidation and don't exclude the possibility of an acquisition. The capital for an acquisition is available. But we have very high demands in respect to culture, strategy and organization on the financial institute that we would acquire. It would have to complement our three business units.

The consolidation isn't just happening among banks, but also among independent wealth managers. What is your strategy regarding this?

Independent wealth managers for us are a privileged clientele. We would like to offer our far developed technology platform to these market participants in connection with the consolidation. Therefore I don't exclude further alliances in this segment.

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