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Julius Baer wants to lift its onshore-business with Russia’s super-rich to at least $1 billion. The Swiss bank’s head in the region, Ewgeni Smuschkovich, talks compliance, recruiting, and family ties with finews.com.

The Swiss private bank is about to hire its fourth private banker in Moscow after receiving a branch license, and is on the lookout for more, regional head Ewgeni Smuschkovich told finews.com in an interview. 

The Zurich-based wealth manager’s ambitions onshore with Russian millionaires and billionaires run counter to others, which are abandoning the region as U.S. and European sanctions make life difficult for foreign companies. UBS pulled out in 2015, Credit Suisse retreated one year later, and Morgan Stanley said earlier this month it will leave next year.

The trend doesn’t dissuade Baer and Smuschkovich, a Russian-born, Vienna-educated banker. «I’ve learned in doing business with Russians that these clients appreciate those who stand by them in a crisis,» he said. «In the long run, I’m convinced the geopolitical tensions will be put aside and the good relationships will remain.»

Billionaire Boon

Switzerland’s stance towards Russia has made it harder for wealth managers to win business there, he says. Julius Baer’s risk management is equipped to tackle the challenges correctly, he insists. 

«The relationships we’ve built up with individuals over decades are carefully evaluated and can withstand political changes,» Smuschkovich said. At 31, he was appointed the youngest partner in the history of Viennese wealth manager Gutmann. Nine years later, now a managing director at Julius Baer, Smuschkovich embodies the elegant private banker prototype, parrying dicey questions with an easy smile. 

Julius Baer won a branch license from Russian authorities in December, the culmination of a more than four-year effort to woo clients in the nation. Russia is home to the fourth-largest number of billionaires, according to a study by Wealth-X, bouyed by higher output of commodities and a modest economic recovery.

Wooing Clients

To get at them, Julius Baer has poured resources into Moscow and may in coming years open more branches further afield. «We have to be present in the various megacities – that’s where the growth is,» the 41-year-old private banker said. He told «Bloomberg» earlier this year that he wants to hire eight private bankers by year-end, and have at least 200 clients booked.

Specifically, Smuschkovich is looking for at least $1 billion in assets – anything less, he says, doesn’t make financial sense. Clients must bring at least $1 million, which he says is the minimum required to warrant the regulatory vetting that Russian clients typically require.

The bank has devoted considerable resources to the effort: Julius Baer sponsors the newly-opened Zaryadye Concert Hall in Moscow, publishes a regular wealth report for Russia, and hosts major events for clients. With many global banks having left the market, Julius Baer's main competitors are now local lenders.