The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE co-founders of a newly launched private bank believe it is “well-positioned” to emerge as a leader among boutique institutions in the next few years, telling Tribune Business they hope to distinguish themselves in investment performance and execution.

Lawrence Howell, chairman of Capital Union Bank, and co-founder of Switzerland-based EFG International, suggested that the fact the institution did not have to deal with “legacy issues”, and instead offered a simple regulatory and business environment, was a “competitive advantage”.

Mr Howell said himself, and founding partner Clement Ducasse, share decades of experience in capital markets and private banking. “We have a truly global perspective and global experience, but we do have the competitive advantage of having a simple regulatory and business environment to deal with, not 50 other things that are diverting our focus. I’m not suggesting that we are absolutely unique in this regard, but I do think it positions us well going forward,” said Mr Howell.

“We are not going to be different in the range of services that we offer, but we hope that we can distinguish ourselves over time in investment performance and in execution. All of the owners are very experienced private bankers. We have a relatively simple legal structure. Our aspiration is to deploy our global relationships with potential clients and potential new hires to optimise output for our clients in a whole host of capacities.”

The bank, founded in 2013, is currently based in Old Fort Bay and is already looking for expansion space. Capital Union Bank has taken on eight staff to date, and has room for as many as 19 employees, although that figure was “not set in stone”.

The bank offers a wide range of services, including custody and execution; money market; foreign exchange; over-the-counter (OTC) and derivatives instruments; precious metals trading; securities and fiduciary lending.

“We don’t have any legacy, so there is not history we have to worry about that skews our decision-making or a big parent somewhere who may have another priority,” said Mr Howell.

“We are looking to build a sustainable and substantial Bahamian business using potential global clientele. With the new rules and regulations we think will be introduced, including the automatic exchange of information, we want to build something that can deal with and survive that.”

Assessing the private banking environment, Mr Howell said: “The banking environment is not the least bit challenging in some fundamental client-oriented economic senses. The global wealth accretion of wealthy persons continues to be at roughly double the rate of global GDP growth.

“The assets of our global clients continue to grow, and they have been growing since the crisis. What is challenging for our competition is legacy issues, dealing with a host of missteps which may or may not have been taken in the past, dealing with the resultant regulatory concerns which may have been magnified by the history of the individual banks, and by global scrutiny in the case of Switzerland,” he added.

“They are dealing with potential collateral damage to their businesses that might result from the reputational risks that might being taken by relatively small businesses in their global context.”

Mr Howell added: “I do not think that many of the large global banks currently engaged in private banking-oriented business will be able to retain a presence in this particular market place, dealing with this particular set of clients.

“I’m not worried about regulators anywhere else, other businesses; I’m worrying about doing the right thing in the Bahamas under Bahamian law, and the right thing by our clients, our colleagues in the Bahamas. That’s my only concern.”

Mr Howell said the Bahamas has a bright future from an investment standpoint due to several factors. “We think that the combination of the Bahamas’ physical location; stable democratic system; friendly relations with the US; weather; natural beauty; educated workforce; potential for attraction; it’s clearly active attractiveness for inbound capital; and its enlightened tax policies will continue to generate growth rates in this economy well in excess of what is being achieved in neighbouring countrie,s even with the anticipated introduction of the automatic exchange of information with other banks. We think there is a bright future here. Many people will be interest in investing here,” he added.