UAE's Swiss bank nears $1bn in assets

If you want to keep your money safe you put it in a Swiss bank. If you want to keep your money really, really safe, you buy a Swiss bank.

That is what Aabar Investments did in April 2009 when it bought AIG Private Bank in Zurich. Renaming it Falcon Private Bank, it opened its Dubai representative office in 2008, with a second regional representative office opened in Abu Dhabi in April.

Falcon set a target of increasing UAE assets under management to US$1 billion (Dh3.67bn) by the end of this year. It has almost hit that mark in just 18 months - the latest figure stands at $950 million. "We'll hit a billion by the end of the weekend," says Eduardo Leemann, the bank's dapper chief executive.

He has been with the bank since 1997. Before that he was head of private banking at Goldman Sachs, and has also worked at Bank Julius Baer in Switzerland and the US. The bank is one of the key sponsors of the Toro Rosso Formula One racing team. Amid the buzz of the pit lane before this month's Etihad Airways Abu Dhabi Grand Prix, Mr Leemann discussed motor racing, private banking and the difference between men and boys.

What was it like to change from being US-owned to Abu Dhabi-owned?

a AIG had to sell, we were the first asset they were able to sell. In the state AIG was in, the last thing you want to be is a private bank because people just evaporate. They lose confidence. You go back and say, "why don't you stay because we are now US-government owned?" and that just makes it worse. We were a totally standalone entity, it was easy. We were very happy to have an owner like [Aabar]. Exciting part of world. What Aabar saw is the market is growing and it is relatively unsophisticated because it didn't exist for 200 to 300 years like some of the European ones have. There is not much of a tradition of local players, most people are foreign. Yes, we are a Swiss bank, but Abu Dhabi-owned.

Why do you sponsor a Formula One team?

Toro Rosso is a dynamic, uncomplicated team. We like the fact that, as a Swiss bank, we have a Swiss driver in Sebastien Buemi. But we do it for two main reasons. First, people see the logo and it raises awareness [of us]. Second, we can invite our clients to the races. Next to a high level of service, there's an emotional aspect to banking. When we take people to the races you cannot imagine how much they like it. This you cannot buy. I always say the difference between boys and men is the price of their toys.

What is the right pace of growth?

That's a good question because, for sure, the pace of growth is going to change. Now what people do is save it in cash or low-volatile assets. At the moment, being conservative is good. There are a lot of unhappy people in the marketplace, as you can imagine. On the other hand, whatever is not exciting has a low margin. So you have a challenge. Every bank has that. I hardly know any bank whose profits did not come down.

What do you need to open an account with Falcon?

The minimum account size in this region is $5m. In Europe it is $2m, simply because the service is different. These numbers are a bit silly. What we are aiming at, we need a high minimum. Would we take a $3m account to start with? Absolutely.

How many clients do you have?

We have 3,925 to be precise. And that's 3,000 too many. Don't misinterpret that, it might sound silly. But we have old clients from the past, we can't throw them out, you never do that. But it's a question of getting the fee structure right. You can't have a premium service and pay no fees. I don't want to throw them out, but our three biggest markets, Russia, China and the Middle East all want to recognise themselves. That is why we are in Formula One.

How many people can a private banker realistically look after?

He can service between 20 and 30 clients. No more than that. It's a 24/7 job. It starts with concierge service, which you never make money out of, all the way to giving investment advice.

What is the right investment advice?

For me it's telling you what you really need, not advising you to take something off my shelf that you have produced yourself and I have the highest margin on it. The problem is you make the biggest profit off the products with the highest margins, so the big banks at least try to sell them.

Do you have your own products?

Very few, two or three. Everything else is bought in. I talk to you about what your needs are. You pick and we will charge you a fee for doing this. This is the model of the future, but it will take some time to get there. That adjustment is happening, next to the regulatory environment. Sometimes it's tough. What's good today can be bad tomorrow. You can go from hero to zero in 24 hours. Five years ago Mr [Hosni] Mubarak [the former Egyptian president] was a respected head of state. Within two or three months he went very quickly.

Are you in favour of more regulation?

No. I am totally against more regulation. I understand you need regulation but more regulation does not solve the problem. The most regulated market has always been the United States. What happened in 2008? Regulation as such does not solve the issues. Right regulations is what you need. But what is that? They are saying you should hold more capital, but also you should lend more, otherwise the economy won't work. So what do you do as a banker?

Are you trying to make us feel sorry for bankers?

That is what I am trying to tell you [laughs].

Have bankers lost trust in politicians?

I think everybody has lost trust in politicians. How can a system where you want to be re-elected change a world? You know once you give something to somebody it's difficult to take it away.

Is Switzerland still the number one choice of where to put one's money?

People in this region don't go by default to Switzerland. I think they go to Dubai. The default is not Switzerland but Singapore or Dubai. People want to diversify their assets geographically.