Monday, February 28, 2011

Worldwide recognition for AfrAsia Private Bank AND Mauritius...





The 2011 Euromoney Private Banking Survey has ranked AfrAsia Bank as the Best Private Bank in Mauritius. The Bank services the unique needs of high net worth customers through a winning partnership with AXYS Capital Management locally and in the region.

Since its launch, AfrAsia has been targeting the affluent side of the local and regional market whether entrepreneurs, executives or their families. Several tailor made private banking and wealth management solutions have been devised in to serve a clientele with complex financing and investment needs.

The fact that a Mauritian headquartered bank such as AfrAsia has won such a prestigious award also reflects a global trend that clients want expertise and decision taking that is closer to them. Isn’t this type of recognition a proof that our International Financial Centre should look beyond India to promote itself? We at AfrAsia believe we should keep finding ways to strengthen the Mauritius private banking industry, promoting it as a centre of excellence, to attract a new range of wealthy clients to Mauritius.

Key questions: What is the present position of the Mauritian private banking industry in the regional and global arena? What key products and services will guarantee its sustainable development? How can it target and attract new clients? Should a national strategy be devised for the positioning of Mauritius private banking?

Global figures show a strong trend for the market to increase in the years to come in different parts of the world, including in our region. Mauritius should take advantage of this growth, but we are also aware that our private banking industry must generate a strong annual growth and reach a critical mass of assets under management, in order to be a key player at the regional level.

We would like you to share your points of view on opportunities that could develop Mauritius private banks’ competitiveness or on challenges to be faced.

7 comments:

  1. Mauritian Financial ObserverMarch 1, 2011 at 9:25 PM

    Congratulations on the award! To meet the above objectives, three possibilities could be identified:-

    Firstly, Mauritius must be recognized as a centre of excellence for private banking. That implies, for actors in private banking, building knowledge of wealth engineering, continuous innovation in terms of services and having a pool of specialized resources.

    Secondly, bankers must diversify their client base in terms of geographical and socioprofessionnal origin. The idea behind is to increasingly focus on the new generation of clients whose assets are highly worth in liquid financial assets. We need to clearly target a new range of clients, i.e. entrepreneurs or senior managers who have needs linked to their wealth management, or to issues related to retirement, succession, real estate property, among others .

    Finally, the third factor of development is the positioning of the Mauritius based entity within the group of entities in the country. If several Mauritius based entities take on a regional responsibility for promoting private banking, a virtuous circle of growth will naturally appear in Mauritius and enhance a better collaboration between players. This will strengthen the financial centre’s worldwide competitiveness.

    Beyond those three positioning considerations, a new opportunity may be identified.

    Clearly, players could rationalise their investments for the benefit of the financial place as a whole, i.e. development of market intelligence capabilities, research and innovation in terms of products and services, implementation of a certified training for the profession, maintenance of a competitive regulation, specific branding, infrastructures relating to the banking sector and global infrastructures (airport, etc.).

    Common efforts are necessary to develop and promote products and services that could serve as symbols for the financial place. The only way for Mauritius to be a significant regional player is to consolidate synergies between private banking and other professions of the financial sector. By defining a vision, developing an action plan and identifying priorities, a national debate would probably be of benefit to the industry as a whole. More, beyond individual interests, there should be a common goal for Mauritius to succeed within the regional and global financial place.

    Your thoughts would be most appreciated. This could indeed become a national debate.

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  2. Dear MFO,

    Thank you for the good thoughts and your very interesting post.

    This is absolutely to the point. We indeed need to look for new opportunities and the right competitive positioning of the Mauritius Private Banking industry in order to become recognized in the region and worldwide. Mauritius has already embarked in the vision of making the country an International Financial Centre of excellence. However, having a well-defined strategy for the Private Banking segment would surely be complementary to this vision. We are already developing IRS and RES projects in the country so it would make total sense to also promote Mauritius as a one-stop-shop for the affluent individual’s banking and wealth management requirements.

    Can Mauritius position itself as an alternative private banking centre to Luxemburg or Isle of Man, for instance? The answer should be yes. Why not? We however need to create the right synergies, as you mentioned, between the local authorities and all key players. We could start marketing the country regionally in this way. “Why go to Luxembourg when Mauritius is at your doorstep”. A number of reasons would justify this action. We have compiled some of them here: http://www.afrasiabank.com/en/global_business_mauritius_advantage.aspx

    We can see the number of affluent individuals constantly rising in the next couple of years. The economic book of both traditional leading economies and new developed countries brings its share of new HNWI and significant changes in the geographic sources and flows of wealth. In addition to traditional family wealth, a new generation of entrepreneurs springs up from the new wave of economic globalization. This provides our private bankers with a chance to further expand business in the region as a result of improved market access. To be the bridge between Africa and Asia also means that we want these affluent clients to consider Mauritius as a second home, while being the banking and wealth management specialist of these Asian investors going to Africa and African investors going to Asia.

    With the growth in HNWI, private banking is being developed in a number of emerging markets and competition is increasing in different jurisdictions. New “International Financial Centres” are steadily developing their offerings to attract the richest with more international needs. This will force private bankers to clearly differentiate in order to maintain their attractiveness, or they would need to form alliances in order to leverage their competitive advantage. One element of differentiation will surely need to be the type of privileged relationship we do have with these clients. But should we also better address key tax and regulatory policies to enhance our competitiveness?

    AfrAsia is already marketing Mauritius as a private banking centre and if the country wants more recognition in this segment, an action plan encompassing the following and involving the key players would be crucial:-

    - Diagnostic of the existing private banking offering (current strengths and weaknesses / key opportunities for the future).
    - Positioning strategies for the Mauritius Private Banking Centre for the five to ten years ahead. This would include strategies to increase client reach, improve product richness, attract the right talents, build a strong and coherent brand, investing more and faster in the development of private banking activities.
    - Work together to develop and promote the cluster

    The traditional private banking business of banks is in constant evolution. Investment performance, added value services such as lifecycle financial planning, inheritance-succession management and estate planning, and improved client relationship are key trends. Do we have the necessary pool of talents to follow up on this evolution? Will the authorities seriously consider the next move?

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  3. It's the first time I'm coming on this blog...great initiative afrasia and well done for the award! I was reading an interview article and it seems that you have an investment product with a return of 6%p.a. is this currently available? Can someone please provide more details?

    Jason (offshore professional)

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  4. Constantin de Grivel - Financial AdviserMarch 10, 2011 at 4:31 PM

    In order to retain more financial flows, Mauritius definitively needs to promote itself as the new financial hub/gateway to invest into Africa.
    It has to come from a common will of all Mauritian financial institutions.
    Once the financial consensus will be established, It will be possible with the government help to go "market" abroad Mauritius as an International Financial Center.
    None individual player will be able to achieve that goal alone for sure.
    I guess that once done the "Virtuous circle of growth" that MFO was speaking about will happen.

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  5. Mauritius Financial ObserverMarch 11, 2011 at 4:52 PM

    Thank you for this concise reply Mr Vallet. We will surely await the next move from authorities. I was thinking to myself of a few principles we have learnt from the real economy: when it comes to business, please your client, motivate your staff and enrich your shareholders.

    But what do clients really want?

    Since the private banking business is international, this means that clients have different objectives and priorities depending on their age, economic background, citizenship, etc. There are, nevertheless, some common criteria which we could think of:-

    1. Trust and Security
    a.Trust the country
    b.Trust the banks
    c.Trust the advisors
    2. Speak My Language, Respect My Religion, Understand My Culture
    3. Market & investment opportunities with a vibrant stock exchange and an open real estate market
    4. Effective Tax Policies
    5. A personal or business interest locally
    6. Staff is key and education a priority
    7. A good investment location with the right facilities, safe, easy to do business, etc

    To my opinion, Mauritius has it all…Let’s now see how authorities and bankers like yourselves take a “forefronter” advantage in making Mauritius a Private Banking Centre of Excellence.

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  6. Hi Jason,

    Yes, our private banking arm, AXYS Capital Management, does have an investment product with a minimum return of 6%p.a. and a further upside depending on performance of the BRICs. As it is a private placement, we do not make any publicity around it.

    You are however welcome to contact me directly on my email thierry.vallet@afrasiabank.com

    Being in the global business world, what is your perception of the Private Banking Business in Mauritius?

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  7. Dear MFO,

    Agree with you, Mauritius is well positionned for most of these criterias, although we need to progress on some. For example, our Stock Exchange is not vibrant enough, although it has some maturity by now. A lot of potential to my mind, but cost of transaction stays very high compared to developped markets, therefore most investors do not trade, causing a lack of liquidity. This is a vicious circle because foreigners will limit their exposure too in the country, Mauritian will limit their trade because of cost, etc... This however should not prevent Mauritius to be a Private Banking destination, and we definitly need to work harder on Staff and Education as a priority, in order to have Investor Advisors of top level. There are other places which have most of good criterias, and Advice, returns and services will make the difference.

    Our market in itself lacks volume for big players to be in town, and when foreign clients are the targets, they prefer to be in already established jurisdictions like Hong-Kong, Singapore... Hope authorities will hear us.

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