Henry Tillman is a man with a mission. It is to make ABN AMRO the foremost financial institutions group [FIG] bank in the world. And Asia is obviously part of his masterplan.
ABN AMRO has just gone through a massive reorganization. It is now split into three units: retail banking, private banking & asset management and a wholesale bank. The wholesale bank combines commercial banking with investment banking, and within that combine it is split into global client and product groups.
Tillman runs the FIG group, which is the largest one. It accounts for 50% of the wholesale bank’s revenues. In Asia he is seeking to beef the bank up, and has hired a slew of new blood.
Curtis Chen was hired a year ago from Aetna, the insurance giant, to run the Asian FIG group. More recently, Samuel Zavatti, Laurence Pau, Paddy Mishra, Agnes Chew and Jusuf Adhidharma have been hired from Bank of America. And KS Park and KY Kim have been hired to run Korean FIG from JPMorgan Chase. Helen Pun also joins from JPMorgan.
Tillman says it speaks volumes about ABN’s commitment to Asia that Zavatti – with his 31 years of banking experience – is based in Hong Kong as global head of central banks. He is one of three FIG group ‘global’ heads and will have Latin America, the Middle East and Eastern Europe report into him.
However, Tillman does not want to create the impression of expanding for expansion’s sake. In fact, he says the FIG group is very cost conscious and has one third less staff this year than last. He says the new hires are all about upgrading the quality. And what does that mean for the culture of the new group?
“Culture is critical,” he says. “The key challenge is to integrate ourselves into one team. It is a huge challenge and one that I am very dedicated to getting right.” He says the cultural paradigm he is seeking to emulate was that created at Chase prior to its merger with JP Morgan.
The new FIG group brings together global markets, corporate finance, equity capital markets and transaction services (cash management, trade, custody and clearing). The rationale for the reorganization was to bring all the products to the clients, rather than have the old-fashioned petty divisions between commercial bankers and investment bankers. This means the FIG group is driven by client relationship managers who liaise with the product heads.
“We’ve hired a group of people that buy into the concept,” says regional boss, Curtis Chen. “There is now a strong accountability in place for growing client business across multiple products.”
With an M&A background, Chen adds: “ Our coverage model covers global players globally and local players on a local basis. We have very strong European relationships that are likely to make inbound M&A decisions into Asia.”
The team are convinced that FIG opportunities will abound in North Asia. “Our heaviest placement of people and resources is in North Asia. We are most heavily weighted towards Japan, Korea and Greater China,” says Tillman.
He continues: “In North Asia there are a lot of opportunities for bank restructuring and also to list insurance companies, which is one of our specialities globally.”
Chen says he sees a trend in Asia towards bancassurance – the formation of distribution partnerships between banks and insurance companies – and ABN wants to be a big part of that M&A process.
Another great opportunity is Taiwan. Says FIG corporate finance head, Mark Stadler: “Taiwan will pass legislation allowing financial holding companies in June. That will create a lot of opportunity. In the banking sector there will be a lot of buyers and a lot of sellers. In the next two years, practically every bank will do a deal, or hive of NPLs into an asset management company or tap the equity markets.”
He adds: “It will be one of Asia’s biggest FIG opportunities.”
Greater China is obviously a key area of focus. Stadler says there will be lots of bank restructurings going on and the forthcoming Bank of China listing is just the beginning as far as equity capital markets goes.
So will ABN get it right in Asia? The jury is out, given the lack of a FIG track record. But says Tillman: “We rank number one or two this year for European bank and insurance capital raising. And last year we were number one for Latin American bank capital raising. We want to import that skill set into Asia.”
Tillman says he wants 25% of his FIG revenues to come from Asia. The real test will be whether highly sophisticated clients such as DBS can be won over from Asia’s most high profile FIG banks: Goldman Sachs, Morgan Stanley and JPMorgan.
