Lombard Odier isn't afraid of making acquisitions, says Patrick Odier in an interview with finews.com. Still, the Geneva-based private bank has never in its 221 years of existence bought another bank. Is this about to change?

Mister Odier, net income at Lombard Odier declined 13 percent last year. What was the main reason for the decline?

Naturally, we would have preferred a better market environment, but we are still satisfied with our result. We are on track, if you look at the result over the past three years. In 2015, we had a higher profit with 140 million francs, but it was boosted by the sale of stakes. In 2014, our profit had been 120 million.

The volatile market is acting as a brake on client activity and weighs on our revenue. We also have made significant investments in technology and infrastructure, which affected the result as well.

Could you be more specific?

Last year, we hired about 80 engineers for our technology platform and invested a total of 45 million francs. We also keep recruiting relationship managers to strengthen our private client business – primarily in Asia, where we are pretty successful with our wealth management mandates, but also in Europe and in Switzerland.

Is your Asia business profitable?

Yes, but it is still small. We only started intensifying our business in the Asian market three years ago. At the same time, we see attractive growth potential in Latin America.

«We hire an average of 30 to 40 relationship managers a year»

We soon will open a representational office in Montevideo, Uruguay. In Panama we’ve been present for quite some time. And last year we opened an office in Milan.

How many relationship managers did you hire?

We hire an average of 30 to 40 relationship managers a year. That however is more or less a net figure. In other words: Some relationship managers are getting replaced by others. Costs enjoy top priority.

The cost-income-ratio nevertheless reached 83 percent, a high reading.

This is the result of our continuous investments, which will yield higher revenue in the medium term. Compared with our competitors, a ratio of 83 percent for private banking and asset management is industry average.

Lombard Odier has received 5.2 billion francs in client assets. Where did they come from?

The inflows came from a broad spectrum. Looking at it in a broader perspective, 80 percent came from Europe and 20 percent from Asia.

Lombard Odier has also felt the risk aversion of clients. How do you react to this reluctance?

Uncertainties on the financial markets are always an opportunity for wealth managers, because the need for advice increases markedly. In such a situation, the dialogue with the customer is absolutely central, to find out what the client wants exactly. Therefore we developed our offering with a focus on less risky investment solutions in the fixed-income segment. Recently we launched a new Global-Climate-Bond-Fund. We have also expanded our offering in private equity.

With Sweden’s Annika Falkengren you have been able to get a high-ranking banker as a new partner. She has good contacts to the Swedish industrial dynasty Wallenberg. What will change at Lombard Odier?

We are not proclamation bankers, but prefer to surprise. In Northern Europe, we have been established for a long time. Falkengren’s long experience as a banker will help us there to promote our international expansion.

«We cultivate a very strict due-diligence process»

It is also our duty as partners to make sure that Lombard Odier will have strong management capacities in future too. We are happy to see that our partnership model allows us to attract such talent and personalities.

In 221 years of history, Lombard Odier has always grown organically. Are you scared of takeovers?

No, we don’t fear takeovers, but cultivate a very strict due-diligence process in order not to acquire risks to our reputation. We looked at potential candidates last year, but had to refrain in the end.

We are willing to grow through acquisitions, if it fits strategically and culturally. With a core capital ratio of 29.3 percent, compared with a regulatory demand of 12 percent, we have the means to do so.

Your due diligence seems to have failed in the presumed case of money-laundering involving Gulnara Karimova, the daughter of the Uzbek president.

We reported the case five years ago to the Money-Laundering-Reporting-Office. We do not wish to say more about this.