01 / January 2008

CLOSEclose to business atABN AMRO Private Banking (Switzerland)

asia Expanding the linkinterview Katarzyna Niezabitowskaclient perspective Renato Almeida, Tokyofacts Profitability in private banking

Michael A. WeltiMichael A. Welti was born in 1973 in Japan and subsequently grew up in Zollikon, a suburb of Zurich. He completed his studies at the Swiss Banking School with a thesis entitled: “The Center of Excellence - Swiss Private Banking”. He joined ABN AMRO Bank (Switzerland) in 1999 and since then has been active in various functions, almost exclusively in positions oriented toward a broadly international clientele. He has headed the EURASIA department since the beginning of 2007 and is responsible for forming the new “International Europe“ team, building up of the Eastern Europe private banking team, as well as for the expansion and further development of the Asia strategy.

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ABN AMRO Private Banking (Switzerland) has recognised that a growing number of investors and entrepreneurs desire infor- mation as well as investment solutions in Asian markets. According to Michael A. Welti, who is responsible for sev-eral Private Banking Teams covering EURASIA, the bank is addressing those needs by establishing and expanding specialised teams for all Asian markets.

Indeed, involvement in Asia is nothing new to the bank, which has seen tremendous growth in countries such as China, In-dia and others in the region. Its home base in private bank-ing remains Switzerland with that country’s tremendous tradi-tion. Meanwhile, the bank has built up an established network of offices throughout Asia with main hubs in Hong Kong, Singapore and Dubai.

In terms of personnel, ABN AMRO has roughly 100 research specialists just for the Private Bank dedicated to the Asian market. Backing that up is a global organisation with 100,000 people worldwide, including a strong corporate banking net-work and additional research experience in any areas a client might need. These resources, including investment advisors and international estate planners, enable the bank to cope with even the most sophisticated needs of its clients.

The fact that the bank has research staff based not only in Europe but also locally in Asia is crucial because it allows the bank to understand all the subtleties of these Emerging Markets and exploit new opportunities. In this way, it can provide invest-ment solutions and create products tailored specifically to the needs of both its European and Asian clients. “Our strength is in providing tailor-made solutions,” elaborates Welti, “and believe me, we are quite creative in developing them!”

local presence in asia opens huge growth market to investors

When looking to diversify their holdings, wise investors seek new opportunities. The rapidly expanding Asian market offers great potential. To assist clients in Switzerland, Asia and around the world, ABN AMRO is expanding its established base, providing a strong link between Switzerland and Asia.

Michael A. Welti, Director & Head Private Banking EURASIA

As an example, consider the Capital Protected Certificates the bank developed for the Chinese market. With this instrument, investors can participate in the growth taking place in Asia while at the same time protecting their original investment. There are also increased opportunities to capitalise on Asia’s infrastructure development.

Such vehicles are attractive to clients not only in Switzerland but around the world. Those who wish to add some exposure to the Asian markets can take advantage of these and other tailor-made products, which offer an attractive risk/reward pro-file. They might be interesting, for instance, to a Swiss entre-preneur with a small to medium-sized business who is look-ing to the future when he will pass the firm on to his children or sells it. The bank examines that individual’s investment ob-jectives, time horizon and level of risk tolerance, and whatev-er the combination of these factors, ABN Amro will find a suit-able investment instrument somewhere in the world.

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“It is important that we work together effectively in all the coun-tries in which we operate, doing so as a ‘bank without bound-aries’”, adds Welti. “My job is to ensure that close-knit and professional teamwork exists among all our offices. We are also strong believers of an open architecture, bringing togeth-er both internal and external parties in the solution-building process. In my extensive travels throughout Asia and Europe, I increase our external network and try to link opportunities between Switzerland, Europe and Asia so we can make the rel-evant connections for every client.”

Relentless growth: ABN AMRO takes advantage of Asian market dynamism to systematically expand all of the bank’s local specialist teams. Pictured here: rush hour in Tokyo’s subway.

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Kasia, you are one of the first associates of ABN

AMRO Bank to move into the Fortis camp. How

do you feel about that new chapter in your ca-

reer?

Kasia Niezabitowska: I’m very optimistic – in

fact highly enthusiastic about this opportunity.

For me, it’s another wind of change in my life

which started to blow recently. In August 2007,

I moved from Poland to Switzerland. My switch

to Fortis came rather unexpectedly, but actually

it’s a great and enthralling opportunity. Another

fascinating “marathon”. My first impression

upon joining Fortis has been absolutely positive

and certainly in keeping with my expectations.

How were you approached?

My direct boss, the Head of Central and East-

ern Europe Team and the Branch Manager of

ABN AMRO Zurich, asked me whether I was

interested in meeting with the Branch Manager

of Fortis in Zurich. They were looking for some-

body to cover Poland. I prepared a presentation

with my ideas and potential for the Polish mar-

ket. So when the Branch Manager later asked

me whether I would be interested in taking over

responsibility for my “home territory”, the deci-

sion was a no-brainer. For me it simply seemed

a perfect opportunity.

At the age of 19, you moved from Poland to

London and subsequently conquered the world’s

highest mountain outside the Himalayas –

6962-metre Aconcagua in Argentina – as well

as 5642m-high Mount Elbrus in the Caucasus

Mountains, Europe’s highest peak. So you’ve

stood up to risks in life. Is your new position a

job for a risk-taker?

Risks have always been a part of my life, for

sure. I guess some people are born with the in-

clination to accept higher risk and I happen to

a mountaineer plants a new flag

Katarzyna (“Kasia”) Niezabitowska is the first member of ABN AMRO Bank Switzerland to switch sides following the company’s merger with Fortis: with the new year, she has become part of Fortis’ Switzerland Private Banking Central European team, holding primary responsibility for the Polish market. In this interview with CLOSE, she talks about the challenges that lie ahead in her new job.

Katarzyna Niezabitowska, Vice President, Relationship Manager Central Europe, Fortis Banque (Suisse) S.A.

be one of them. In my view, there’s no gain to

be had without taking risks. Having said that,

taking foolish risks is totally inappropriate. At

the end of the day, it all has to pay off and you

have to survive with your skin intact. As for my

new position, I am sure I shall not be bored at

all. My current responsibility also involves

certain – yet acceptable – risks.

With the change from ABN AMRO to Fortis, what ’s

going to be different in your professional life?

Surprisingly, nothing will change very much.

I’ll be doing practically the same thing I’ve been

doing at ABN AMRO Bank. Given the fact that

I grew up in Poland and have been addressing

the Polish market at ABN AMRO, I already have

a network. The challenge for me of course will

be to keep up the pace of growth in Assets un-

der Management, so my focus will be on both –

the management of the existing portfolio and

acquisition of new clients.

How did your colleagues respond when they

heard about your transfer?

At first they were sad about my change,

and in all honesty that warmed my heart. But

on the other hand, they told me that I had come

to a wise decision. Once they reflected on the

situation, they all were very happy about what it

meant to me.

That’s understandable. After all, you grew up

in Poland, speak the language and are familiar

with the culture …

… Yes, absolutely! Of course I can rely on a

network of relationships, not least of all thanks

to my former activity as a corporate Relation-

ship Banker at ABN AMRO. This makes me feel

quite comfortable. On the other hand, private

banking is a new field for me.

To a certain extent, isn’t that roughly equivalent

to a leap in the dark?

Not really. Corporate and private banking

have many commonalities, so for me it’s not

like changing horses in the middle of a stream.

The sales activities are identical in both areas

and so are the tools applied in building rela-

tionships. Gaining people’s trust, meeting peo-

ple, building relationships is what I really like to

do – in fact it’s one of the passions of my life.

What are your recommendations for col-

leagues who might also opt to join the

Fortis team?

Be optimistic, and be open to the opportuni-

ties and changes that the future holds! And of

course be prepared to work hard. This merg-

er represents a momentous step for both com-

panies and their employees. So keep your eyes

wide open for new challenges and have the

flexibility to accept new tasks. If you have de-

fined goals in your life, developments such as

these are always brimming with opportunities

for new career paths and challenges. Do not

be afraid to live with passion, no matter what

you do.

What are your personal goals in life?

I would like to complete my PhD in Economy

(thesis on banking) by the end of 2008. As for

running, I am planning my fourth marathon

in Q2 2008 – the Madrid Marathon in April

2008 as a team, together with a few colleagues

from ABN AMRO. Granted, I’ll be representing

the Fortis side of the equation. But we’ll be the

merged marathon team of the new bank. Isn’t

that a nice symbolic gesture? Many times,

actions speak louder than words.

“Fortis-tude”Katarzyna Niezabitowska, hails from southern-east Poland. She

earned her bachelor and master’s degree from Warsaw’s University

of Banking and Insurance, post graduate diploma in Management

& Finance of the Warsaw School of Economics. She is currently

following Doctorate Studies in Economy at the Warsaw School

of Economics. She joined ABN AMRO Bank in 1997, working for

the first three years in investment banking division of ABN AMRO

Hoare Govett and then the subsequent seven years in ABN AMRO

Corporate Banking as a Relationship Banker. There she bore re-

sponsibility for the largest local and foreign accounts of the bank’s

Consumer and Diversified business units. Effective 7th January

2008, she joined Fortis’ Private Banking division as a member of

the Central Europe team, where she focuses mainly on the Polish

market. The enthusiastic mountaineer and marathon runner spends

her non-professional/non-athletic time immersed in literature, with

an eye towards religion and philosophy.

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Renato Almeida1, Senior Managing DirectorVALE (Companhia Vale do Rio Doce), Tokyo“I’m the type of client that is quite usual nowadays due to do the unprecedented pace

of mergers and realignments among global players. Every major city in the world has

expatriates like me, and all of us could be viewed as potentially interesting private

banking clients. But our needs differ from those of normal clients. We move from city

to city and thus have two options: we can conduct all of our financial activities at one

bank located in a safe and trusted place, or we can establish a new banking relation-

ship each time we move. The latter is the easier from the point of view that it offers more

personal contact and the same business hours meaning opportunities can be exploit-

ed more rapidly. On the other hand, we are forced to continually transfer our accounts.

That makes the first option better in terms of efficiency. However, in this scenario is the

heightened possibility of day-to-day problems, misunderstandings and lost opportu-

nities. Because of these problems, the bank must be very attentive and give clients like

us proper and rapid support. We praise loyalty and outstanding service but, due to our

situation, we often opt to have a bank account manager within stone’s throw of our of-

fice. I’ve had terrible experiences working remotely with banks, mainly due to the differ-

ent time zones. Some institutions are not prepared to offer this remote support, which

requires that they use IT to interact with the client and understand his or her special

needs. These days, I’m very satisfied with my private bank. It has won my loyalty and I

ignore the temptation to have a local account manager.”

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1 Renato Almeida is a Senior Managing Director of VALE in Japan. VALE is the world’s largest producer of iron ore, with a market share of roughly 33%. However, VALE has focused on diversification by acquiring in 2006 Canada’s Inco, the world’s second-largest nickel producer [NB: Russia’s Norilsk Nickel is the largest].

the expats’ needsWhat moves clients to entrust their assets to a bank’s purview? CLOSE gives clients the chance to speak their piece, describes their concerns and questions, as well as sheds light on business models and investment strategies – this in line with the credo “The CEO isn’t the boss of each employee … at the end of the day, it’s the client.”

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Swiss banks well equipped for global competitionIn private banking, the showcase activity of Swiss banks, the leading players worked successfully in 2006. This was the con-clusion of a study by the University of Zurich’s Swiss Banking Institute, based on data from 253 banks in eleven countries. Not least of all thanks to what is still a favourable industry en-vironment, client assets under management at the 20 leading banks increased last year by 20% to USD 6.2 trillion. A good fifth of that expansion is attributable to the inflow of new mon-ey; the remaining four-fifths came from market-related value gains in existing portfolios (see table). The fact that the world’s largest asset manager, UBS, has garnered a mere 4.3% share of the overall market shows just how fragmented the private banking market still is. The 20 top banks combined represent only 16% of the world’s managed assets.

Increasing profitability and efficiencyAlong with the increase in managed assets came heightened profitability and operating efficiency. In all countries surveyed, banks’ return on equity rose significantly; in Switzerland it stood at 21.3%, and this despite the banks’ already hefty equity base. As a result, the Swiss banks rank in the middle of the pack, lagging competitors from the Benelux countries, northern Europe, the USA and Great Britain. The rising returns on equity disguise the fact that the gross margins earned on managed assets have largely declined, which in turn is indic-ative of increasing competition. The higher profitability is mir-rored in noticeably lower cost/income ratios. With a reading of 65.7%, the Swiss banks can lay claim to a slot only at the lower end of the midfield. Apparently they are being forced to Source: Neue Zürcher Zeitung, December 5, 2007

1 excl. UBS Business Banking 2 excl. Corporate & Retail Banking Source: Swiss Banking Institute

Assets under management at leading banksMonetary values in USD bln.

Managed assets Net new money Mkt. share (%)

2005 2006 ±% 2005 2006 ±% 2005 2006

UBS1 1419 1609 13 77.8 92.9 19 4.3 4.3

Merrill Lynch 674 770 14 – – – 2.0 2.1

Credit Suisse2 601 643 7 40.5 41.1 2 1.8 1.7

Morgan Stanley 431 478 11 – – – 1.3 1.3

HSBC 340 408 20 35.7 33.0 -8 1.0 1.1

Deutsche Bank 221 249 13 14 15 7 0.7 0.7

Citigroup 180 208 16 1 5 400 0.5 0.6

ABN Amro 166 187 13 – 11 – 0.5 0.5

Barclays 142 182 28 – – – 0.4 0.5

Goldman Sachs 148 177 20 – – – 0.4 0.5

Top 20 banks 5148 6169 20 178 215 21 15.4 10.0

fight more in terms of costs than revenues, given that - apart from the Japanese banks - they generate the highest per- employee total revenue (CHF 621,000) and highest gross profit (CHF260,000).

Size not always an advantageSurprisingly, the study reveals a negative correlation at Swiss banks between the per-employee level of assets under management and the margins earned on those assets. This finding contradicts the broadly held view that size represents an economic advantage. In their investigation, the authors de-termined that a global convergence of margins is underway. In their view, the Swiss banks are very well positioned in private banking but have to hone their technique and fitness in order to keep up with the leaders in the champions league.

profitable private bankingErmes Gallarotti

«A satisfied customer – the best busi-ness strategy of all.»Dr. Michael Leboeuf, University of New Orleans

«There are no traffic jams on the extra mile.»Roger Staubach, Executive Chairman The Staubach Company

«There is only one boss. The customer. And he can fire everybody in the company from the chairman down, simply by investing his money somewhere else.»Samuel Walton, Wal-Mart Founder

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Disclaimer For internal use only. Any dispatch to external parties requires explicit prior approval from Zurich Marketing Dept. This material is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments or services. Neither this document, nor any copy thereof may be sent to or taken into the United States or distributed in the United States or to a US person.

Impressum ABN AMRO Private Banking (Switzerland); Nikodemus Herger, Sabine Schweinzer.Text: Andreas Bantel. Concept and Design: Heads Corporate Communication AG BSW, Zurich, www.heads.ch. Print: Druckerei Feldegg AG, Zollikerberg. Photographs: Robert Huber (page 5), Andreas Seibert (page 3, 6).