Geneva’s banking industry was once so secretive that a banquier swallowed his data rather than surrender the names of his clients to police. Now, the Genevans are reinventing themselves for the spotlight.
The city of Geneva long flourished as part of Switzerland's $6 trillion money haven. The city's private bankers prided themselves on being even more discreet than their brash Zurich counterparts.
Most famously, Jacques Darier, a scion of the Lombard Odier banking dynasty, swallowed a list containing data on French clients when confronted by Paris police in 1985. (Darier died in 2005. Some two years ago the bank dropped «Darier Hentsch» from its name.)
Hit Hard
Since the financial crisis, Swiss private banking has withered with the end of banking secrecy the symbol for the end of an era. Geneva, where finance accounts for more than 12 percent of gross domestic product, has shed more than 2,400 finance jobs since 2012, and the number of banks has dropped to 104 from 138, according to the Geneva Financial Center, a lobby group.
The city has also been hit hard by a host of foreign banks including Goldman Sachs, Lloyds and the Royal Bank of Canada packing up. By 2016, the situation was so dramatic that figurehead and Mirabaud partner Yves Mirabaud said unemployment rates among bankers were «electroshock therapy» for the industry.
Getting Close to the Arch Rival
Since then, Genevan firms have realized they must adapt to survive. To do so, many are bridging the «roesti ditch», the imaginary but highly symbolic border between Switzerland's German- and French-speaking regions. Zurich, a rival banking center to Geneva, has also suffered, but has until now been more resilient than Geneva, which is highly reliant on Middle Eastern clients, for example, and has been slower to open up into newer markets like Asia.
Mirabaud was one of the first to ramp up in Zurich, expanding its private banking staff to 40 from 15. At Lombard Odier, Zurich head Dominique Wohnlich has hired copiously since joining from Credit Suisse, while former Julius Baer banker Frederic Wuthrich now heads Credit Agricole-owned Indosuez Wealth Management in Zurich. But also 1875 Finance or Decalia Asset Management have all hired aggressively in Zurich. In February, Union Bancaire Privee even snapped up Adrian Kuenzi, the ex-CEO of private bank Notenstein La Roche, to kickstart its Zurich office.
Going Back a Very Long Time
The prominent hires come as Genevan firms – many of them centuries old – mine their roots for business purposes. Edmond de Rothschild, run by Ariane de Rothschild, hired a former BNP Paribas branding expert to «harness the power of the brand», while Lombard Odier tapped the ranks of haute couture to bolster its marketing efforts. The region is fiercely proud of its roots, which go back to the 12th century when a cleric granted Geneva «franchises» in order to lend at interest – something the church officially opposed at the time.
The flirtation with the spotlight is a dramatic departure for Geneva’s secretive and clannish wealth industry. For years, Mirabaud had only a discreet brass plaque reading «M. & Cie» marking their office a stone’s throw from the Rhone river.
An older private banker recounted to finews.com how his bank used to require clients to recite a code number or word on the phone before acknowledging the call. The harmless wannaby-spy examples underscore how Geneva’s financial center, and in particular the banking aristocracy of Dariers, Pictets, and Mirabauds, long positioned itself as the more discreet alternative to Zurich.
Star Pull
Now, Genevans are even dialing up the star power: Annika Falkengren, one of the highest-ranking women in European banking, joined Lombard Odier as a partner last year. Boris Collardi is set to become a partner at Pictet next month. The two hires are in stark contrast to previous hiring practices, which would have been heavier on promoting yet another scion of the founding family than boldly taking an outsider.
The jury is still out on whether Genevan banks will succeed with their Swiss push, and reliable statistics on assets under management are scarce. Just as in Zurich or London, smaller firms without a particular niche are especially exposed. Goldman applied to open a representative office in Geneva earlier this year, which may mark a rebound in the city’s wealth management fortunes.
