Geneva's Reyl Says Client Assets Stagnated in Second HalfGiles Broom
Reyl & Cie. Holding SA said client assets stagnated in the second half of the year as the bank fended off an investigation by French judges.
After surging 26 percent in the first six months of 2013, managed assets slipped to 9.1 billion Swiss francs ($10.1 billion) at the end of December, from 9.3 billion francs in June, the Geneva-based firm said in an e-mailed statement today. Full-year net income almost tripled to 24.7 million francs.
“In a year marked by a number of challenges, Reyl group demonstrated its sustainability,” Francois Reyl, chief executive officer of the bank established by his father Dominique Reyl in 1973, said in the statement. “We are working to reinforce our presence in Asia and in the Middle East, as well as continuing the development of our new lines of business.”
Reyl says it’s diversifying its business model away from private banking for continental western European clients by expanding in emerging wealth-management markets and increasing business with institutional clients. The bank is awaiting the outcome of inquiries by Paris judges over previously undeclared assets held offshore by former French budget minister Jerome Cahuzac -- a scandal that forced Cahuzac’s resignation and prompted French President Francois Hollande to step up measures against tax evasion.
France’s crackdown on undeclared offshore accounts has roiled Geneva’s wealth-management industry. Banks are pressing customers to report any undisclosed Swiss accounts amid French investigations against UBS AG, Switzerland’s largest bank, and the Swiss private bank of HSBC Holdings Plc.
Francois Reyl told reporters in Geneva today that legal constraints placed on him and his father by French judges were “very unfair” and the bank has used all legal means possible to clear its name in the Cahuzac affair. A December order for the CEO to suspend management duties and remain in France was lifted on Jan. 28. The company has worked to “re-establish the truth” after a former employee spread false information, Francois Reyl said.
Reyl, 48, said in May 2013 that he was targeting 10 billion francs of managed assets by 2015, representing a quadrupling of client funds since 2009. The company employs 162 people in Switzerland and elsewhere in Europe and Asia after adding more than 60 staff since 2009.
The institutional client unit known as RAM Active Investments boosted managed assets more than 50 percent to 3.4 billion francs last year. Corporate advisory and private-client non-banking services accounted for 12 percent of revenue, the company said today. Total managed assets were 7.1 billion francs at the end of 2012.
Francois Reyl said he is “cautiously confident” about the outcome of the legal inquiries in France. French clients represent less than 5 percent of customers and are in the process of complying with French tax rules, the CEO said.
Private and institutional clients contributed net new money of 1.2 billion francs last year, compared with 2.3 billion francs for 2012, according to the bank’s annual report.