Archive for October, 2012

‘Budget Implementation, Still A Major Issue’


Director, Kakawa Asset Management Limited, Mrs. Modupe Mujota, in this interview with Ademola Alawiye, speaks on the challenges of the Capital Market and how confidence can be restored in the bourse

Do you think the reforms being introduced by the management of the Nigerian Stock Exchange are yielding results?

I think we have already begun to see the regulatory response to the imperatives that are being demanded. We have seen the NSE introduce the exchange traded funds; we’ve seen them introduce the concept of market makers; these are all in response to the requests they’ve been getting and also as a result of new leadership. The past leadership of the NSE has also done fantastically well in modernising the Exchange. These are the responses that have helped to fine-tune the market. Everything is working together for good as we see it now. We see good results coming from the top market controllers from the market capitalisaton perspective. We are also seeing a sophistication of the investors that are interested in business. They ask questions now; they are more demanding. It’s no longer my friend made 50 per cent profit on stocks, so I want to make 50 per cent too. They now ask questions about how that 50 per cent came about.

How can investors’ confidence restored in the stock market?

Everything is working together for good as we see it now; investrors’ confidence will not just return quickly. It’s a gradual process and that we’ve been seeing with market indicators. The regulators are doing everything to ensure investors’ confidence, and the efforts are yielding results. Investors’ be confidence is very important for the market to strive. The market is information driven so it is important for us to address investors’ confidence. As confidence is being renewed, we are being responsible in our guidance of the market. The market is already bouncing back; we have already seen the onset of the initiative like the market markers and the impact of the activities on the market. I believe the market is really going to bounce back fully. In the long run, we will see the impact of all the reforms. The stock market has actually done well this year and investor’s confidence has improved. The truth is Nigerians remain sceptical but as soon as they establish that the market rebound is consistent, they will rush in. We hope it’s not too late because it’s typical for people to follow the band wagon.

How do you see the market growing in 2013?

As I said, the market is bouncing back. This year, market capitalisation has done relatively well despite the odds. There will always be opportunities and there will always be opportunistic investors. I believe that we should focus on the positive, if we build a strong enough brand, we’ll squeeze out whatever negative energy there is. Nigeria is a brand in creation, ultimately we’ll create a strong brand if we consistently work together towards a desired goal and we’ll squeeze out whatever undesirable elements whether they are internal or external. So the market will move forward if we all work together. Let the regulator play its role while the operators do their bit too.

Do you share the view of some analysts that market makers do not have the desired effect in redirecting funds from traditionally heavy traded stocks at the exchange?

It’s a good start. There are over 200 stocks in the stock market and only 28 stocks have market makers; believe me they can only do so much. In our organisation, we have a mantra, ‘how do you eat an elephant, piece by piece?. The management of the Exchange is working hard and is coming up with a number of reforms to deepen the market, promote wealth creation and also boost investors’ confidence. This is a good start and we can expect to see more.

Some operators are calling on the Asset Management Corporation of Nigeria to bail out operators in the capital market just like it bailed out banks. Do you share this view?

A lot of work went into refurbishing AMCON. I read extensively the Act that established AMCON, I believe that the focus at that time may not have included the stock broking institutions and it would be important that we study that sector of the economy before we propose that AMCON should dive in and help. Intervention by AMCON will help but it has to be done properly. AMCON’s intervention would have to be guided and they would need information to make the right decisions. AMCON is in response to a specific challenge and that specific challenge is on its way to revolution.

How can returns be guaranteed in the financial market?

I think it’s about making business bankable. There is no one that will find risk without commiserate return that will not go for it. Government securities are next to very risky. As such if they are well priced or they are providing enough of a premium, banks are definitely going to fix their investment in that direction particularly as institutions. The real sector is finding it difficult to make their businesses bankable and this also puts a responsibility on those of us who are in financial advisory. We have to take up the responsibilities of making those businesses bankable, so we have to go in there and help them rather than just sit and do arm chair banking. We should go beyond them just coming to pick up the boxes, we should work with these institutions. The real sector is indeed important to any economy. So, focus should be on giving more loans to the real sector.

Do you think the tight monetary policy of the Central Bank of Nigeria will keep funds out of the reach of the private sector?

I don’t believe there is an intentional stance to keep funds out of the reach of the private sectors. I just believe that the number of people that banks lend to is quite few relative to what the economy requires. So, it is the same thing as the wealth of the nation, which is concentrated in the hands of a few. It is like saying that the wealth of banks is also concentrated in the hands of few people. The small and medium scale enterprises today are the ones that have difficulty in accessing bank finance and so they are the ones that need to make their businesses more bankable. Banks of course have to be willing to create a platform for that, by educating clients with what is now consistent with their revised risk acceptance criteria.

What is your view on the sectoral allocation of the 2013 budget, do you think everything has been done to achieve a far reaching positive effect on Nigerians?

In my opinion, I believe that the budget is always in the best interest of Nigerians. The daunting issue is implementation. How do we make sure that the fund assigned to each sector gets to the grass roots. Once we can unravel the puzzle with implementation and execution, the budget will be deemed to have been excellent.

How do you see regulatory policies in the country?

Regulatory policies are from regulators and not too much from the company. We are in an age where increasingly the world is beginning to do business; we also need to get our market to a place where we can invest continuously, just as they would spend spontaneously. Policies should make the market a bit flexible to make people invest more. For instance, investors would tread more if government securities are next to zero risk. I mean for as long as there is zero risk, I would invest in such investment. Also, it is the job of regulators and financial advisers to help entrepreneurs make business.

What is the Kakawa Asset Management all about?

We specialise in the provision of investment management services to private clients, pension funds, employee schemes and the trustees of family settlements and charities, amongst others. We are registered with the Securities and Exchange Commission as a corporate investment adviser. We develop unique and personalised approach to identifying and customising investment portfolios to suit client needs. We follow a well-defined investment philosophy, which results into attractive investment options for our clients. Our services are designed to support the achievement of our clients’ total wealth management goals.

Culled From: The Punch

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Sunday, October 28th, 2012 EN No Comments

Choose executor carefully

‘Our hearts are still beating fast’ Magnitude 7.7. quake recorded off Haida Gwaii

A magnitude 7.7 earthquake centered in the Queen Charlotte Islands region was felt across the province late Saturday evening, a reminder for British Columbians to be prepared for ‘the Big One.’
The quake, which hit at 8:04 p.m. Saturday, originated in Haida Gwaii, about 199 kilometres west of Prince Rupert, according to the U.S. Geological Survey. Up to eight aftershocks followed including an initial magnitude 5.8 aftershock at 8:14 p.m. and a magnitude 4.8 aftershock later at 8:52 p.m.

2 hours ago


Sunday, October 28th, 2012 EN No Comments

Wealth Management IT Spending: a global perspective

Key findings of the report include:

North America and Asia-Pacific will continue to drive IT spending through 2014, while Europe remains at a slower pace in IT spending. Beyond 2014, Celent expects Western European banks and wealth managers to recover from their current crises, and new markets in the Baltics to drive higher growth in European wealth management IT spending. However, improved spending in Europe is likely to be balanced by a “cooling off” period in North America and Asia-Pacific as wealth managers work through the major IT spending projects of 2013-2014. As such, Celent expects global wealth management IT spending to grow at a consistent level with a five-year CAGR of 6-7 per cent. By 2016, Celent expects global wealth management IT spending to reach $5.7 billion.

Europe now accounts for 43 per cent ($1.9 billion) of global wealth management IT spending, while North America makes up 39 per cent ($ 1.7 billion). At 18 per cent ($0.79 billion), Asia-Pacific still accounts for the lowest total spending among regions.

Celent expects that IT spending in North America will increase 6.9 per cent in 2013, from $1.7 billion to $1.8 billion. With a 6.6 per cent CAGR over the next five years, spending will ultimately reach $2.2 billion by 2016.

Growth in European IT spending will likely be cut in half, from 7.5 per cent in 2012 to 4.3 per cent in 2013, over the next year. Celent expects wealth management IT spending in Europe to reach $1.97 billion in 2013

Celent expects a 10 per cent increase in Asian IT spending for 2013, and an 8 per cent CAGR over the next five years, ultimately reaching $1.08 billion by 2016.

While there are many ways to split the spending pie, there are two telling indicators of wealth management IT spending. First, Celent estimates that roughly 55 per cent of IT spending will go to the front office. Tools that will help the advisor capture client information and engage clients through more advanced and interactive tools will gain priority. Furthermore, while compliance tools are typically associated with the middle and back offices, rules around KYC and investment selection will increase spending on proposal generation and financial planning tools. Secondly, wealth managers will allocate more of their IT resources to external software and services, as opposed to legacy internal systems and hardware. In 2012, global spending on external software and service was $2.3 billion, or approximately 52 per cent of total global IT spending ($4.4 billion). By 2016, Celent expects that global spending on external software and services will equal 57 per cent of total global IT spending.

Given the highly regulated environment, firms are changing their strategies. Wealth managers are optimising technology to create new service models and channels for different customer segments. In particular, their focus has been on adding technology for advisors and providing best-in-class service for investors through self-directed tools and improved advisor-client relationship. As a result of these trends, areas of IT spending include advisor end user tools, compliance, and new channels including mobile and social media, as well as integration and outsourcing.

Celent’s research has identified the following five spending areas as “highest priorities” in the next 12-18 months:

  • Advisor and end user tools, including communications tools and wealth management platforms.
  • Compliance.
  • New and existing channels.
  • Integration of existing systems and operations.
  • Outsourcing back office operations.


Saturday, October 27th, 2012 EN No Comments

Palm Beach, FL (PRWEB) October 27, 2012

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PR Web

Palm Beach, FL (PRWEB) October 27, 2012

Al Bhatt, newly appointed Chief Investment Officer of Coral Gables Trust Company, a leading South Florida wealth management and trust company, headlined a panel at the Ivy Family Office Network Forum held on October 16th, at the Phillips Point Club in Palm Beach, FL. The Forum is part of an international and continuous dialogue with family offices to provide high value education and information on trends for family office investing, structure and operational excellence. The Ivy Family Office Network is one of the leading global family office networks with more than 500 family offices attending their events within the past 12 months.

Some of the more than 1,000 past speakers have included 5 of the top 10 leading asset allocating consultancies, pre-eminent alternative investment funds, best in class asset management professionals, family office subject matter experts and world class family offices.

Al Bhatt headlined the session on “Portfolio Construction 2012 and Beyond” with panelists Kevin Simpson, Portfolio Manager at Capital Wealth Planning, Pat Antonetti Managing Partner of Antonetti Capital and Clay Dunnagan, Managing Partner of Anchor Capital Management.

“We opened with a discussion of the historical approaches to portfolio construction based on pre-2008, 60-40 equities models and reviewed the evolution of portfolio construction models available to investors” said Bhatt. “We then went on to assess the various array of strategies available to high net worth investors ranging from traditional, long only equities and fixed income to alternative assets and ETFs. I found the critical assessment of active management strategies relative to passive implementations quite interesting. In addition, the drill down into various portfolio implementations featured excellent summaries of the benefits and complexities,” said Bhatt.

“The panelists emphasized the importance of individual risk models and an “objectives-based” approach towards designing client specific portfolios. Likewise we considered additional complexities from multi-generational families and multi-locations and the liquidity needs of these groups” Bhatt said. “Finally, we discussed different allocation models spanning liquid and illiquid approaches as well as the more classic or barbell approaches towards investing” he added.

Other Forum sessions covered a variety of topics, including those designed to help attendees successfully prepare for potential changes that might occur as a result of new SEC initiatives; other regulation, changes to tax codes, political impact of the upcoming election and other family office centric topics.

According to event producers The Ivy Family Office Network, ivyFON, their Forums are developed as an ongoing dialogue with family offices on an international basis. IvyFON’s expertise is an outgrowth of leading one of the United States’ oldest and largest alternative investment networks, the IvyPlus network. The IvyPlus network was started as a private equity, real estate and hedge fund network consisting primarily of Ivy League alumni but inclusive of other participants who had attended more than 50 globally comparable programs or through merit are worthy participants in the program. More than 10,000 people have attended IvyPlus forums globally.

Attendees emerged from the Forum with practical strategies and solutions to achieve both short and long-term objectives. The program featured off-the-record, peer-to-peer discussions in a non-commercial setting, in-depth and highly interactive sessions addressing organizational structure, family dynamics and succession planning, and granular investment sessions covering the latest asset classes and strategies.

Al Bhatt has over 25 years experience building the investment strategy and managing institutional multi-asset class portfolios for high-net worth private clients. Mr. Bhatt’s recent experience has been in South Florida as the Chief Investment Officer for a well known multi-family office and as Chief Investment Officer for a prominent hedge fund of funds. Earlier in his career, Mr. Bhatt was the Director of Alternative Investments at SEI Investments, a publicly traded company (SEIC) providing manager of manager investment solutions to institutional, high-net worth and financial advisor clients. Mr. Bhatt was also a Partner at Greenfield Capital, a European-based private equity firm focusing on fund of fund investments as well as direct and co-investment opportunities in the U.S.

Mr. Bhatt began his professional career with Cornerstone Research, a leading financial and economic consulting firm, where he had considerable managerial responsibilities and participated in the creation of the Financial Institution, Real Estate and Technology Groups. His academic training is in Economics with a Masters from Stanford University and his B.A., from Union College

About Coral Gables Trust
Coral Gables Trust Company is a leading provider of wealth management and trust services in South Florida. Founded in 2004 as a locally owned and operated independent trust company, Coral Gables Trust serves a client base, ranging in size from $1 million to over $50 million; which includes affluent individuals and families, small to medium sized companies, foundations, and pension and endowment funds. We strive to provide totally conflict-free services to our clients, combining personalized advice and service, open-architecture (no proprietary products), asset based fees, and a culture totally devoted toward putting our clients’ interests first.

Coral Gables Trust was voted Best of Miami by Miami Today and voted for the third consecutive year Best Trust Company in Coral Gables 2012 by the United States Commerce Association (USCA). We were also recognized as a “Top Florida Trust Firm” in April 2012 by Florida Trend, placing Coral Gables Trust among the sector’s elite.

For More Information on the Ivy Family Office Network, contact them at

Read the full story at






Saturday, October 27th, 2012 EN No Comments

Choice of executor matters

Choosing an executor can be one of the most important decisions of your life and one with significant implications for the person you choose and others close to you.

The executor is responsible for carrying out the wishes of the deceased as outlined in a will. And the task, says Leanne Kaufman, vice-president of the professional practice group at RBC Wealth Management, is not always straightforward.

“In its simplest terms, the executor will be collecting all of the assets – having to do investigations with everything the deceased owns, whether it’s bank accounts, marketable securities, investment accounts, real estate, personal property, all of the things in your house and your car, and anything else that you have that your name is attached to,” she says.

“If any of that is named in the will to be distributed in its current form, then that’s a responsibility (of the executor). If not, then all of those items need to be sold or liquidated – turned into cash somehow … It would even be the executor’s job to go in and make sure the top drawer gets cleaned out and things are sent to Goodwill that aren’t going be able to be sold.

“Then once they’ve done that (the executor is) responsible to make sure that all the debts of the estate have been paid.”

Being an executor is a job that requires time and ability, and not everyone is qualified, says Kaufman, the author of The Executor’s Handbook.

Kim Mitchell, a 37-year-old resident of Petawawa, Ont., chose her best friend, Holly Lake of Ottawa, to be her executor in the event she and her husband both die. She and her husband are in the military and are sometimes stationed in conflict zones. They also have a four-year-old son to consider.

Mitchell says she chose Lake because “I need someone I can trust, and when you’re making someone executor of your estate, you’re trusting them with everything you own – your children, all your money and that. They’re the ones that make sure everything gets looked after. And Holly was someone I knew pretty well my whole life and someone I trusted.”


Saturday, October 27th, 2012 EN No Comments

Abbot Downing Names Paul Cummings Regional Managing Director For …






More Destinations…


The FINANCIAL — Abbot Downing has named Paul Cummings, formerly managing
director and head of Channel Management for the Managed Solutions Group
at Merrill Lynch, as regional managing director for the Northeast


Abbot Downing is a Wells Fargo business that serves ultra high net worth individuals and families, their foundations and endowments.


In his new role, Cummings will oversee the delivery of asset management, banking, planning, trust and fiduciary, and family dynamics services through dual offices in New York and Philadelphia.


At Bank of America and Merrill Lynch, Cummings was responsible for client segment solution delivery as well as strategic planning and execution for the Institutional, International, U.S. Trust and Merrill Edge channels. As Wells Fargo Company reported, he previously served as head of the Institutional Investments Group with responsibility for various aspects of the institutional client segment, including investment strategy, portfolio management and client service, along with strategic planning, client management and fiduciary/risk management for private foundations, non-profit organizations and corporate plan sponsors of defined benefit and defined contribution plans.


“We’re thrilled to have such a highly regarded industry veteran as Paul with his extensive investment experience and relationships across the Northeast,” said Jack Ginter, Abbot Downing senior managing director. “Paul understands the distinct needs of the ultra high net worth client and how we can deliver the full breadth and depth of Abbot Downing’s services to support clients in using their wealth to positively impact their families and communities.”


Prior to joining Bank of America in 2006, Cummings was a managing director of the Advisor Wealth Services Group at The Bank of New York. In this role, he oversaw product development, strategic planning, client service and sales for the Advisor Wealth Services business unit. During his 14-year career at The Bank of New York, Cummings held various positions in the Private Client Services and Asset Management sectors and served as a member of the Investment Committee of the BNY Partners Funds and a director of BNY Private Investment Management, Inc.


Cummings has served as a member of the Investment Company Institute’s Research Committee and is active in several community organizations. He received a bachelor’s degree from St. Lawrence University.
Abbot Downing serves clients in all 50 states through offices in San Francisco, Palo Alto, Los Angeles, Scottsdale, Denver, Houston, Minneapolis, Chicago, Philadelphia, Washington, D.C., Charlotte, Winston-Salem, Raleigh, Naples, Jacksonville, and Palm Beach.


Abbot Downing, with $31 billion in client assets, is part of the company’s Wealth, Brokerage and Retirement group, one of the largest U.S. wealth managers. Wells Fargo launched the Abbot Downing brand on April 2, 2012, combining its former Lowry Hill and Wells Fargo Family Wealth businesses. The original Abbot Downing built the iconic stagecoaches that have come to represent Wells Fargo. Abbot Downing provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. Some alternative investments and complementary strategies may be available to pre-qualified investors only. Certain products and services offered subject to credit approval or credit qualification.




Friday, October 26th, 2012 EN No Comments

Thirteen spooky reasons why December 31, not October 31 can be the most …

TORONTO, Oct. 26, 2012 /CNW/ – While October 31 can be especially scary
for little ones, December 31 can prove downright haunting for adults if
they haven’t considered certain year-end tax planning strategies. RBC
Wealth Management has suggestions for Canadians to ensure they take all
necessary 2012 tax planning tips into account.

“December 31 is second only to April 30 as a crucial date in the tax
planning calendar,” said Tony Maiorino, vice-president and head, RBC
Wealth Management Services. “Because this date represents the last day
of the year that potential tax savings opportunities are available, you
need to start planning now to help achieve your financial goals.”

Failing to consider the following 13 potential tax planning strategies
may make your December 31 particularly spooky:

For business owners:

  1. Incorporated company: If you are a business owner with an incorporated company, you may find
    both year-end corporate income tax deductions and a structured
    retirement savings plan for yourself through an Individual Pension Plan
  2. Salaries for family members: As a business owner, consider paying salaries to yourself and
    appropriate family members before December 31. When used correctly,
    this strategy can give your family members earned income enabling them
    to make an RRSP contribution the following year and giving your
    business a tax deduction in the current year.
  3. Purchasing assets: If you are a business owner and intend on purchasing assets for your
    business, e.g. computers, purchasing them before December 31 may allow
    your business to claim depreciation on these assets for tax purposes.

    For individuals:

  4. Prescribed rate loan to spouse: With Canada Revenue Agency (CRA) stating the prescribed interest rate
    will remain at a historical low of one per cent until December 31, it
    is an opportune time to consider establishing or modifying a spousal
    loan as a possible income splitting strategy.
  5. Unrealized capital gains: If you have unrealized capital gains, you may want to consider deferring
    them until after December 31 if your marginal tax rate may be lower in
    2013 compared to 2012. This could allow for any tax payments to be
    deferred until 2014.
  6. Tax loss selling: Are you facing a large capital gain in 2012? Perhaps you sold a rental
    property, securities or your business. If so, you may wish to maximize
    the opportunities associated with selling securities that have an
    unrealized capital loss to help reduce your tax liability or obtain
    refunds for taxes paid in previous years.
  7. Charitable donation: Making a charitable donation is an excellent choice for reducing the
    personal tax you pay. The final day to make contributions to a
    registered charity in order to claim the donation tax receipt on your
    2012 income tax return is December 31. However, if you plan on donating
    securities in-kind before year-end, then due to the administration
    involved in processing an in-kind donation, ensure that you start this
    process well in advance of the year-end to ensure that the in-kind
    donation is recorded as a 2012 donation.
  8. Registered Retirement Savings Plan (RRSP) Conversion: If you are turning 71 in 2012, you cannot have an RRSP after December
    31. Consider making your expected 2013 RRSP contribution in December
    before converting your RRSP.
  9. Employer Bonus: Are you receiving an employer bonus by December 31? Deferring it may be
    a wise choice for you if you are expecting to be in a lower tax bracket
    in 2013.
  10. Registered Education Savings Plan (RESP): If you are contributing to a RESP, you’ll want to ensure you have
    contributed the maximum allowed in order to qualify for the 20 per cent
    Canada Education Savings Grant by December 31.
  11. Moving within Canada: If you plan to move within Canada, consider that individuals pay
    provincial tax rates on taxable income based on their province of
    residence on December 31. Since marginal tax rates vary from province
    to province (and from 39 to 50 per cent), you may want to consider
    moving prior to December 31 if you are moving to a province with a
    lower tax rate.
  12. Quarterly payments to CRA: If you make quarterly tax installment payments to the CRA, you should
    consider making your final payment on or before December 15 to avoid
    late interest charges.
  13. Fees: Remember to pay all investment management fees, tuition fees, safe
    deposit box fees, accounting and legal fees if deductible, childcare
    expenses, alimony, medical expenses and any business expenses by
    December 31 if your intent is to deduct them on your 2012 tax return.

All tax saving strategies should be reviewed by a qualified tax
specialist and, where appropriate, by your investment advisor, to
ensure all appropriate regulations, laws and individual personal
considerations are taken into account.

About RBC Wealth Management
RBC Wealth Management is one of the world’s top 10 largest wealth
managers. RBC Wealth Management directly serves affluent,
high-net-worth and ultra high net worth clients in Canada, the United
States, Latin America, Europe, the Middle East, Africa and Asia with a
full suite of banking, investment, trust and other wealth management
solutions. The business also provides asset management products and
services directly and through RBC and third-party distributors to
institutional and individual clients, through its RBC Global Asset
Management business (which includes BlueBay Asset Management). RBC
Wealth Management has more than C$562 billion of assets under
administration, more than C$324 billion of assets under management and
approximately 4,300 financial consultants, advisors, private bankers
and trust officers.



Friday, October 26th, 2012 EN No Comments

Baird Names Manager of Edina Wealth Management Office

Baird Logo

Baird, an international, employee-owned wealth management, capital markets, private equity and asset management firm, has announced that it has added industry veteran Karen Heintz to its Edina, Minn., wealth management office.

Heintz, who joins Baird from UBS Financial Services (UBS), has been named Senior Vice President, Branch Manager, a role in which she will manage and continue to grow the office. Most recently, she managed UBS’s St. Paul, Minn. branch which included 24 financial advisors managing $3.1bn in client assets.

Baird has had a presence in the Twin Cities for nearly 40 years, and currently has 35 associates in the region. The firm has a second wealth management office in Minnetonka and also operates a fixed income office in Edina.

‘Karen brings with her a unique depth and breadth of experience in financial services and human resource management’, said Erik Dahlberg, Regional Director for Baird’s Private Wealth Management group. ‘She is widely known in the Twin Cities for her support of financial advisors, enabling her to attract talent and help advisors expand their business’.

‘Baird shares my passion for creating a great culture for employees and great outcomes for clients’, Heintz said. ‘That is why I know I have found a partner I can trust and I look forward to growing Baird’s presence in the Twin Cities’.

During her eight years with UBS, Heintz held the roles of complex manager, branch manager and financial advisor. Before that, she was a branch manager with RBC Dain Rauscher. Earlier in her career, she held human resource management roles with RBC Dain Rauscher, as well as GAB Robins and Safeco Insurance. Her professional experience also includes service to the United States Army. Heintz holds a bachelor’s degree in retail management from The University of Wisconsin-Madison.

Active in her community, Heintz volunteers time as a tutor with the Saint Paul Public Schools Foundation. She also serves on the Board of Directors for the Park Square Theatre and previously held board and leadership roles with the Bloomington Theater and Arts Center. Heintz resides in South Minneapolis with her husband Matt Perry.

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Friday, October 26th, 2012 EN No Comments

Credit Suisse to Cut More Costs as Quarterly Profit Falls

(Updates with fixed-income, equities revenue in 10th paragraph.)

Oct. 25 (Bloomberg) — Credit Suisse Group AG, the second- biggest Swiss bank, increased a target for cost reductions after posting a drop in third-quarter profit on an accounting charge related to its own debt.

The bank plans to save an additional 1 billion francs ($1.07 billion) in costs by the end of 2015, adding to the 1 billion-franc savings program announced in July and a 2 billion- franc expense reduction achieved since last year, Zurich-based Credit Suisse said in a statement today. Net income fell 63 percent to 254 million Swiss francs, missing the 415 million- franc mean estimate of nine analysts surveyed by Bloomberg.

Chief Executive Officer Brady Dougan is cutting costs and accelerating a capital buildup as Europe’s sovereign-debt crisis curtails client activity and hurts earnings. While the investment bank benefited from the increase in asset prices that lifted profit at U.S. competitors in the quarter, margins in wealth management fell to the lowest in at least five years.

“The big downside that we saw again was on the private- banking side,” Florian Esterer, a fund manager at MainFirst Schweiz AG in Zurich, said in a Bloomberg Television interview. “We see a continuous deterioration in their margins here. And we haven’t really seen anything besides some cost-cutting initiatives but not very forceful cost-cutting initiatives on the private banking side to stop that.”

Shares Rise

Credit Suisse rose 2.3 percent to 21.83 francs by 10:03 a.m. in Swiss trading. Before today the stock gained 24 percent since July 18, when it announced plans to cut an additional 1 billion francs in costs by the end of 2013 and boost capital by 15.3 billion francs after the Swiss National Bank called for a “marked increase.” The stock is down 1.1 percent this year, compared with a 16 percent gain in the 38-company Bloomberg Europe Banks and Financial Services Index.

Profitability in wealth management is under pressure as the erosion of bank secrecy leads to withdrawals of offshore funds from Switzerland, while stricter compliance rules and regulation are driving up costs. The gross margin in wealth management, which reflects how much the bank makes in revenue on assets under management, fell to 107 basis points in the third quarter from 120 basis points a year ago. A basis point is one hundredth of a percentage point.

Cost Savings

Of the additional 2 billion francs in cost reductions announced in July and today, about 1.1 billion francs will come from savings in infrastructure costs, while about 700 million francs will come from the investment bank and about 100 million francs each from private banking and asset management. Chief Financial Officer David Mathers told journalists on a conference call the bank will not disclose a job cuts target although headcount reductions can’t be ruled out.

“We have realigned our business to better meet the demands of a changed regulatory and market environment and, in doing so, have substantially reduced risks,” Dougan, 53, said in a statement today. “At the same time, we have significantly cut costs and improved efficiencies across the bank. We are committed to deliver additional cost savings in subsequent years.”

Unit Breakdown

The investment bank posted a pretax profit of 508 million francs in the third quarter, compared with a loss of 720 million francs in the year-earlier period. Earnings in private banking jumped to 689 million francs from 207 million francs a year ago, when Credit Suisse booked provisions related to German and U.S. probes into alleged tax evasion by some clients. Asset management profit rose to 222 million francs from 97 million francs, helped by a 140 million-franc gain on the sale of a 7 percent stake in Aberdeen Asset Management.

Revenue from the sales and trading of fixed income almost tripled to 1.5 billion francs in the quarter from the year earlier. Revenue from equities rose 15 percent to 1.03 billion francs and revenue from underwriting and advisory jumped 43 percent to 868 million francs.

The U.S. Federal Reserve’s third round of quantitative easing “has had a positive impact on investment bank revenue streams,” Teresa Nielsen, a Zurich-based analyst at Vontobel, said in a note to clients before today’s release.

The bank booked a pretax charge of 1.05 billion francs in the quarter because of an accounting rule tied to the theoretical cost of buying back its debt as market prices fluctuate. Net income would have amounted to 891 million francs in the quarter if the charge, reorganization costs, litigation provisions and gains on the sale of businesses were excluded, the bank said. Return on equity excluding those items was 9.6 percent in the quarter.

The bank stuck with a target to reach a return on equity, a measure of profitability, of 15 percent or more over the cycle.

“As we continue to reduce costs, continue to optimize our capital and we continue to have momentum on the client side we think we will be able to improve our return on equity toward that 15 percent target,” Dougan said in an interview with Bloomberg Television. “That’s something that’s achievable.”

Under Pressure

Credit Suisse, which announced 3,500 job cuts last year, said today it plans to achieve additional savings at the investment bank by driving synergies in the equities unit and continuing to “rationalize” businesses in some regions in fixed income, underwriting and advisory. The company will streamline support functions and coverage of offshore clients in private banking, it said.

Credit Suisse is considering selling its exchange-traded- funds business, and doesn’t plan other asset-management sales beyond the ones announced in July, the company said today.

The asset-management unit saw a net outflow of about 500 million francs in the quarter, while the wealth management unit recorded net inflows of 5.1 billion francs, including an outflow of 3.6 billion francs from “mature markets” such as western Europe.

Credit Suisse saw 32 billion francs in outflows from “mature markets” in the three-and-a-half years through June, Mathers said at an investor presentation in New York last month. The bank’s cross-border business may see as much as 35 billion francs in further outflows in coming years, he said.

–With assistance from Zoe Schneeweiss and Caroline Hyde in Zurich. Editors: Frank Connelly, Dylan Griffiths

To contact the reporter on this story: Elena Logutenkova in Zurich at

To contact the editor responsible for this story: Frank Connelly at;


Thursday, October 25th, 2012 EN No Comments

BNP Paribas Wealth Management awarded “Outstanding Private Bank in …

These awards rank BNP Paribas Wealth Management # 1 in Europe and # 2 worldwide.
Thus, the private banking industry recognizes our strong performance in 2012, emphasizing on our original private banking model integrated in a network along with our strong commitment to our clients.

Private Banker International is a leading journal for the global wealth industry, launched in 1987. The 22nd edition of the award is organized by VRL Financial News, a global brand renowned for innovative, independent thinking in financial services and professional services markets. The jury’s panel is made of Private Banker International’s advisory board, independent specialists in wealth management and the editorial staff.

Vincent Lecomte and Sofia Merlo, Co-CEO of BNP Paribas Wealth ManagemeThe award gauges the participating banks by their quality and depth of service. nt, commented on the results, “These recognitions affirm our capabilities to serve clients. Our strong collaborations within the BNP Paribas Group to offer tailored and effective solutions to our clients in Europe, and more broadly worldwide, is what makes us different and unique”

This award adds to BNP Paribas Wealth Management’s luminous industry recognitions:

Private Banker International 2012
– Best Foreign Private Bank in Hong Kong
Euromoney Ranking 2012
– 7th “Best Global Private Bank”
– 3rd “Best Private Bank in Western Europe”
– 1st in France, Luxembourg, Ukraine
– 4th in Middle-East
Asiamoney Ranking 2012
– 4th “Best Private Bank in Asia” (segment HNWI $25M).

About BNP Paribas Wealth Management (
BNP Paribas Wealth Management is the world’s 7th largest private bank, present in some 30 countries. Over 6,000 professionals, based in every major financial centre, provide a private investor clientele with solutions for optimising and managing their assets. The bank has €257 billion worth of assets under management (as at end June 2012).

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Thursday, October 25th, 2012 EN No Comments