Rickie Chan’s career as a private banker has been shaped by crises from the very start. The Hong Kong native moved back home from the US in 1996 after graduating from the University of Chicago the year prior, starting at Goldman Sachs just months before the Asian Financial Crisis (AFC) began.
“It was a very good learning experience as a junior person in the banking industry,” says Chan. “That gave me a lot of useful lessons [about] the way that I look at risk, the way that we communicate with clients during [a] crisis.”
But an even bigger challenge came about at the turn of the millennium when the dot-com bubble burst. “Everybody was crazy; any company with a dot-com name could go up a few hundred per cent in a short period of time,” says Chan. “And then the bubble crashed. That’s another good lesson we learned; things are never as rosy as they seem, and sometimes things are too good to be true.”
Chan had only spent less than half a decade in the industry at that point, but he would prove his mettle during the 9/11 attacks in the US, which spurred the unprecedented close of market trading till Sept 17, 2001.
“It was very memorable because 9/11 is actually my wife’s birthday,” says Chan. “I remember that night very vividly; we were celebrating her birthday at a very nice restaurant in Central [in Hong Kong]. I got a call from my colleague as we were just starting our main course. He said: ‘Rickie, big problem, something happened in the US.’”
He left the dinner, headed to his office and started phoning his clients individually. “Some knew what was happening, some didn’t know. But many of them told me they really appreciated that I was the first to call them.”
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Chan spent the night advising his clients not to liquidate their portfolios. That evening cemented his work ethic as a private banker, he says. “Most of my clients, when they see me today, they still talk about that night. ‘Rickie, you were the first guy — a young kid — who called me with updates for hours.’”
His clients were also thankful for his level-headed advice to “observe and see what happens” and not join the stampede for the exits.
While more than US$1 trillion in market value was wiped out in the subsequent weeks, the market soon bounced back by 30% to 40%, extending what would be the longest bull run in US market history. Chan adds: “That lesson [helped] me and my clients understand who I am. Many of them became my friends and very good clients for decades after.”
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He spent close to 16 years at Goldman Sachs, even weathering the Global Financial Crisis (GFC). “At that point, we were not sure whether we would have a job a week later… but it’s important to remember to just do your job and don’t worry about what you cannot control.”
In times of crisis, clients will need the most advice from their relationship managers (RMs). However, not all RMs deliver, according to Chan. “When times are good, they show up every day. When performance is bad, when everything goes south, they disappear. That’s the feedback I got about many RMs.”
In a bull market, clients can “throw a dart and make money easily”, says Chan. “But in a bad market, how do you help them preserve their capital? What kind of advice can you give them? It is during these times when I feel I can add a lot of value.”
Credit Suisse
After a short stint at Barclays in Hong Kong, Chan joined Credit Suisse in 2014, staying for a decade until UBS rescued the Swiss bank. Credit Suisse’s name was officially history on May 31.
“I spent the previous 10 years building up everything, almost from scratch. We saw exponential growth in our business and AUM [assets under management],” says the former chief executive of Credit Suisse’s Hong Kong branch and its head of global wealth management for Greater China.
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But when “everything crashed”, as Chan puts it, that crisis felt more personal than the ones before. “It was very special, and worse than the GFC, in the sense that every other bank was doing okay, and the bank I worked at was the only bank that was not doing well. We felt like we were under attack and we needed to defend [ourselves] in a very helpless way.”
Many of Chan’s former colleagues at Credit Suisse could have left for other banks — himself included. “We decided to hold on because it’s not right for us to leave our clients while they were worrying about the safety of the bank and their assets.”
Chan hopes to tell this story to his “kids and grandkids”. He adds: “This was a one-in-a-lifetime experience. The bank survived 167 years, and it went bust just like that. That was a very good memory; every single crisis helped me become who I am today.”
Asia-based, global ambition
A big portion of the troubles at Credit Suisse was attributed to its investment banking division, while the wealth management business, especially in Asia, was relatively sound.
Along with Credit Suisse’s acquisition by UBS, many of the former’s wealth managers joined other private banks, presumably bringing their “books” along with them.
In April, the Bank of Singapore (BOS) formally announced Chan’s appointment as chief executive of its Hong Kong branch. This is in addition to his role as BOS’s head of private banking in Greater China. The move to BOS, a subsidiary of the Oversea-Chinese Banking Corporation (OCBC), marks Chan’s first position at a private bank originating from Asia.
Speaking to The Edge Singapore in Hong Kong, Chan says he can make decisions more quickly at BOS. “At American banks, most of our conference calls happened late at night, many of them beyond midnight. So, they had to make decisions 10,000 miles away, and the timezone difference made it difficult to move fast; it was less agile. The European banks were better but a lot of calls were also in the evening,” says Chan.
When working with the West, Chan also spent precious time explaining the latest news and context behind the Asian markets. That time is better spent at BOS today, he adds. “We are an Asian-based bank with global ambition. We know Asian clients, we know Asian values, we know the Asian economy. I don’t have to explain to my boss why China is important.”
While Chan has only spent a few months at BOS, he thinks the team is “more proactive in accepting new ideas”. He attributes this to the bank’s shorter history; BOS was only established in 2010. “A lot of people here do not have a fixed culture yet, so they are quite open-minded to new ideas [and] new concepts. I already feel like I’m an integral part of this family; I feel at home.”
His move to BOS came about a year after global CEO Jason Moo joined from Julius Baer. The two had worked together at Goldman Sachs, and their tenures overlapped between 1998 and 2012.
“We have this respect for each other,” says Chan. “He is one of the major factors that [made me decide] on this bank. I believe in leadership and one leader can make the whole difference.”
AUM target, hiring spree
On May 29, OCBC group CEO Helen Wong unveiled in Hong Kong plans to spend some HK$1.5 billion ($260 million) to upgrade its technology and facilities across Greater China by 2026, as part of an “accelerated” push to improve customer and staff experience with updated platforms, products and facilities.
Of this sum, nearly HK$1 billion will go towards modernising OCBC Hong Kong’s technology platform. The remaining HK$500 million will go into workplace upgrading for OCBC’s third major site in Hong Kong.
The bank will also hire 300 software engineers in China over the next three years to support the group’s digital transformation. OCBC’s new hiring target is up 75% over its talent pool of 400 software engineers as of the end of 2023, and they are largely based in Malaysia, Indonesia and Singapore.
But Chan closed the briefing with larger news: BOS in Hong Kong plans to grow AUM by 50% by 2026 compared to the end of 2023 figures.
Bank of Singapore’s road map
Chan calls this an “ambitious” plan; while BOS does not disclose its AUM by market, he says Greater China is the private bank’s “second-biggest market” after Asean. Chan also declined to disclose interim targets for this AUM goal.
OCBC group wealth management AUM, which includes BOS’s AUM, ended 2023 at some $263 billion. At a similar briefing in Hong Kong last July, BOS’s Moo said he aims to increase global AUM to US$145 billion ($195.22 billion) by end-2025, having tripled the private bank’s AUM in the decade between 2013 and 2022 to US$124 billion.
The AUM figure is volatile due to asset prices, says Chan on May 29, and he places it at some US$116 billion today.
BOS is growing “at the right time, at the right place [and] with the right strategy”, says Chan, citing a 2023 report by Boston Consulting Group that forecasts Hong Kong will be the world’s largest booking centre by the end of 2027.
The private bank will need a larger force to capture these new funds. Last July, Moo said he would grow BOS’s team of RMs from some 400 to 500 by the end of 2025. Chan said BOS ended April at “close to 450” RMs globally.
Since the start of the year, BOS’s Hong Kong branch has increased its number of RMs by close to 20%, though a spokesperson declined to provide the exact figure. According to Chan, this growth “will likely continue for the balance of the year”.
OCBC’s Greater China network
Synergies and referrals
In May, OCBC posted a net profit of $1.98 billion for 1QFY2024 ended March 31, 22% higher q-o-q and 5% higher y-o-y. Along with releasing its 1QFY2024 results, OCBC announced a $1.4 billion privatisation bid for Great Eastern Holdings (GEH).
While OCBC’s peers have spoken out against the purported synergies between the bank and insurer, BOS may enjoy more obvious synergies with OCBC. BOS logged 40% growth in assets referred from OCBC over 2022 and 2023. According to Chan, this occurs when OCBC’s commercial clients ask the bank for wealth management advice, and the bank recommends them to BOS.
There are also interesting synergies between BOS’s wealth focus and OCBC’s plans to capture funds flows from Greater China towards Asean. Wong says Greater China is a key contributor to the group and has grown “significantly” at a CAGR of 24% over the past decade. In FY2023, Greater China contributed 21% of OCBC’s $8.4 billion in group profit before tax.
According to Chan, BOS is “well-positioned” to capture Greater China clients “looking to diversify their assets across booking centres and jurisdictions”.
Anecdotally, clients in the region are using BOS and its peers as their secondary bank after Swiss names. Does Chan see this among BOS’s clients?
The private bank’s clients are diverse, says Chan, spanning old money and entrepreneurs who have recently taken their companies public in Hong Kong or the US. He adds that clients in the latter group could be as young as 30 years old.
However, Chan does not consider BOS a “secondary bank”. “It may [have been] the case four [to] seven years ago, when people were looking to diversify… But over the years, we have stepped up our services, we have hired very good people from the industry.”
Wealth trends
Many regional investors are looking for signs that the worst is over in China. But who better to ask than the wealthy investors based in the region?
Chan points to deleveraging among investors in Greater China owing to troubles in the Chinese real estate sector. Now, these investors are flush with dry powder and looking for investment opportunities, he adds; some have invested funds into Chinese, Hong Kong or Japanese equities since last year.
Given the slowdown in the traditional market, many clients are more “open-minded” about investing in alternatives, adds Chan.
While BOS has been “more positive” on the outlook for China, Chan says his team needs “a bit more clarity from the policy side”. “We don’t have to be the first to jump into the ship; we are not a hedge fund. One thing I’ve learned over the years is that it’s okay to wait until clarity comes; we don’t have to be the first to make the first bucket of money.”
Last July, OCBC unveiled a target of $3 billion in cumulative incremental revenue between 2023 and 2025. In FY2023, the bank achieved the first part of this three-year target by logging $500 million in incremental revenue. The bank’s leaders are confident it can log $1 million in incremental revenue by the end of FY2024 and the remaining $1.5 million by the end of FY2025.
OCBC’s ‘twin hub’ strategy for Greater China-Asean fund flows
Wong’s vision for corporate activity seems to have held up well. Does Chan see the same pattern for wealth flows and family offices? “We have seen increased interest from Greater China clients to invest in Southeast Asia [and] in Asean. Many of them have already set up family offices in Singapore and are looking for business partners in Southeast Asia,” says Chan. “It’s part of their diversification, not just from their personal wealth but just from their businesses’ point of view.”
If a family office is considering a decision between Hong Kong and Singapore, how would BOS advise them? Chan says he has seen “quite a few cases” where clients set up family offices in both cities.
“I want to emphasise that it’s not a zero-sum game between the two cities, and both cities can thrive together and it can be very complementary,” says Chan. “If Hong Kong does better, Singapore will do better. If Singapore does better, Hong Kong will catch up.”
Photos and infographics: OCBC
