«Carefully selected markets and an important part for sustainability»
In this week's Focus Economia we conducted an interview with the Chairman of LGT, the international group of private banking and asset management, Prince Max von und zu Liechtenstein. We posed a few questions to him about LGT's strategies, the Swiss and Ticino markets, environmental issues, new technologies and Western economic sanctions towards Russia.
What are the main points of the strategy behind LGT Group's activities?
"We always look at long-term goals. We give priority to the development of selected ventures within our respective fields of private banking and asset management. Developing and upgrading our investment expertise continues to be a central element. Furthermore, we always carefully study and select the markets in which we want to be present. In this respect, we are also constantly focusing on sustainability issues. It is a strategy that, as a whole, puts us in a privileged position compared to most of our competitors. A successful strategy that has guaranteed us and will continue to guarantee the growth of both our activities and a high level of viability".
Looking at both the current picture and the future, which markets do you consider to be the most relevant for your activities?
"Overall, we are active in Europe, the Middle East, Asia, and the Americas. We are consequently among the few private banks able to offer clients a global platform. As far as Europe is concerned, in parallel to Liechtenstein, of course, we consider Switzerland to be very important. In Europe, we are also paying particular attention to Austria and the United Kingdom, and we are currently evaluating several options for reopening a private banking office in Germany. On the Asia-Pacific side, there are two recent developments: the opening of a wealth management office in Tokyo last November and the acquisition, announced in December, of Crestone, Australia's leading wealth management company for high net worth clients".
Against this background, what role does the Swiss marketplace represent for the LGT Group and where does the marketplace in Ticino, where you also have a direct presence, fit in?
"The Swiss marketplace continues to hold a leading position in asset management and is an international leader in this field, therefore it is natural that it is important for us to have a strong and well-structured presence in Switzerland, where we have offices in Basel, Bern, Geneva, Lugano and Zurich. Switzerland is relevant both in terms of the onshore market, i.e., resident clients, and in terms of the offshore market, i.e., non-resident clients. A similar argument is valid for Ticino: the Ticino marketplace is important for both resident and non-resident clients, especially Italian clients. In the absence of free access to the Italian market for investment services, we intend to continue to be present in Ticino as well, and therefore continue to develop onshore and offshore business via our Lugano branch".
Until now you have been focusing on both organic growth, i.e. by internal lines, and on acquisitions. Do you also intend to maintain this double track for the development of business in the future?
"I think we will continue to be very attentive to organic growth and at the same time to seize opportunities for acquisition when they arise. Naturally, acquisitions must be consistent with our strategy, they must contribute to value creation, they must in essence be in harmony with our activities and make a positive impact on the Group as a whole. We have extensive experience of mergers and acquisitions over the years, so we are confident that when new opportunities arise, we will again be able to seize them in line with our business strategy.
The LGT Group is 100% owned by the Princely House of Liechtenstein. Have you ever considered a public listing on the stock exchange, even if only for a minority share of the Group's capital, while retaining control?
"We believe that a stock market listing is not necessary for our Group. We have a strong internal resource generation that supports our business well. If you look at the last ten years in particular, you can see that all our objectives have been achieved. We therefore think that there is actually no need to list on the stock exchange and that the Group can continue to develop well on its own strength, continuing along its path and executing its strategy."
Environmental issues have made progress around the world, but there is still much to be done. We as the LGT Group have been strongly committed for some time and will continue to be so.
You pointed out that the LGT Group has been focusing on ESG (Environmental, Social, Governance) and sustainability for some time now. Worldwide, there is certainly a great level of consensus on this issue, but there are also those who say that for some there is also a risk of grassroots greenwashing. What is your opinion on this?
"There has been progress in the world on environmental issues, but there is still much to be done. As the LGT Group, we have long been heavily involved and will continue to be so. The scenario is complex and, of course, in pursuing the right path of safeguarding the environment and making sustainable investments, there can also be risks of façade environmentalism. One must also consider that today the mechanisms for monitoring the authenticity of pro-sustainability approaches are more effective, communications on these issues are more developed and public opinion is more attentive. So, while there are risks, on the whole I am confident in thinking that the world is advancing in the authentic values of sustainability and ESG."
New technologies are now very present in the banking and financial sector as well, so much so that we now usually speak of Fintech. With pandemic, then, there has been as we have seen a further development. At this point, what are the prospects on this front?
"New technologies are now largely present in banking and financial activities and I believe that this is an aspect that will develop further. The Group has also made progress in developing the application of technology, in terms of both the organization of our office work and customer services. In our activities, face-to-face relations with clients are obviously still very important; but at the same time, new technologies are widespread both at work and in daily life, so the digital offering must be adapted, and it is necessary and will be necessary to be always up-to-date and competitive on this front as well".
Unfortunately, the war in Ukraine is now upon us, with its human losses first and foremost, and then its economic damage. There are different opinions on the actual weight of Western economical sanctions against Russia. How do you assess them?
"I am in agreement with those who say that economic sanctions will have a heavy effect on Russia. However, there may be non-positive effects also for those who are implementing the sanctions, albeit not as heavy. In addition to all this, it is necessary to add the damage that the war in itself causes, first of all to the parties involved and then, internationally, indirectly. The question is, however, whether the sanctions will have the desired effect and whether they will effectively contribute to ending this serious war in Eastern Europe. Sadly, there is no answer to this question as yet, we do not know. However, there always remains the hope that it will, that the sanctions can do their part in bringing the war conflict to an end."