“Leaving the Comfort Zone”
Johannes T. Barth, former CEO of Sallfort Privatbank AG, is giving an outlook for the future of smaller private banks on finews.com.
Regulatory demands, a squeeze on margins, the challenge from fintech and the government’s decision to put an end to business with tax evasion – the reasons why smaller private banks are thought to struggle in Switzerland are aplenty. But do they?
Johannes T. Barth, the main shareholder and chief executive officer of Sallfort Privatbank wants to expand his business against all odds. «A tough market environment offers opportunities, but you have to seize them and do away with some old habits – getting out of the comfort zone,» he told finews.com in an interview.
«If private banking generates higher costs and margins narrow at the same time, you have to identify new sources of income and, on the cost side, make procedures more efficient with the help of modern means. Investments in products with a new focus are also necessary,» he said. This is the basis of the bank’s strategy, which was launched in 2012 after the takeover of P&P Privatbank.
Diversified Product Range
Barth is adamant that his bank is to provide a diversified product range, from the classic wealth management to private equity, venture capital and corporate finance services. If Swiss banking is to remain a strong brand despite the tough foreign competition, it needs to build upon and expand the competence of domestic firms. The banker mentions three examples of promising strategies: Zug-based Partners Group, which is a leading private market investor; Geneva-based Bank Syz, a hedge fund specialist; and Fisch Asset Management, strong in convertible bonds.
Dedicated Communications Strategy
Sallfort last year reorganized its asset management team, putting in place a group of investment analysts under the lead of Thomas Pfefferle, the company’s new chief investment officer (CIO). The company is developing a range of investment funds, which it will sell not only to the private clientele but soon also to institutional investors in Switzerland and in Europe.
The third pillar of the bank’s strategy is a dedicated communications profile. Sallfort decided to make it a priority to always combine client events with the transmission of competence. For instance, when Sallfort organizes an event at «Art Basel» with Fausto De Lorenzo, the clients will not only hear about art, but also about investment opportunities. At the «Sallfort on the Alps» conference in Klosters, the bank invites some 100 investors to meet founders and CEOs of the venture capital industry in Silicon Valley and London.
Bringing People Together
«We bring together interesting people from the whole world,» said Barth. «This is significantly more demanding than wine and dine, but it is what customers want.» The bank has also introduced a new customer relationship management, which allows clients to get in touch with relationship managers around the clock. «This implies a radical shift for many relationship managers, because they now are available at all times,» said Barth. «But on the other hand, we now offer a totally new level of service quality.»
The bank has 35 employees and 1.3 billion Swiss francs in assets under management. Sallfort has about 1,000 customers, half of them based in Switzerland, half abroad. About 90 percent of clients are private. Sallfort has had a base in London since 2015 following the joint venture between Sallfort Privatbank with Sallfort Partners.
The private bank originally emerged from the hops trading house Joh. Barth & Sohn based in Nuremberg and founded in 1794. Michael Barth launched Sallfort AG in 1981. Johannes T. Barth is a representative of the eighth generation of the family. The bank has been profitable for 36 years, a run that Barth intends to extend further into the future.
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