Mora Banc is convinced that its business needs to continue growing through Latin America after they have experienced regulatory changes that have forced the Andorran bank, which has always been sustained by the business of the residents in Andorra, Spaniards and to a lesser extent the French, to grow its business outside of the Spanish borders.
Gilles Serra, CEO of MoraBanc Group, showed this confidence in an interview with Funds Society. He reviewed the situation of the group in Andorra, analyzed the private bank’s situation and reviewed the growth forecast paying special attention to Latin America.
Develop the business outside of Spain
The head of the organization, which recognizes that Andorra is a small arena, pointed out that the bank has been committed to developing its business outside of the Spanish borders, “facing towards Latin America”. Regarding this, he explained that Latin America should not be viewed as a region, but instead it should be analyzed country by country, as any other analysis can lead to an ill-fated approach. “There are countries that are not doing very well, although each country presents different opportunities”.
They are planning on conducting new recruitments for Latin America, for the Mexican and Brazilian markets. They are also expecting to double their business by the end of the year, in a market in which “we are growing very rapidly”, he added. Although, he explained that any new movement made in the region will be very well measured.
The executive explained that the international strategy is being carefully assessed, and that they are not jumping fast into new openings and purchases.
Broker dealer in Miami
MoraBanc has decided to buy a small asset management company in Zurich and to make a larger investment in Miami, in order to be able to offer their services to Latin American clients. Last November, the company was setting its broker dealer in Miami. “We thought that it was the right time to offer a different kind of service;that is why we opted for a broker dealer and not for a traditional bank. The business has taken off very well”.
He recalled that in 2012 they opened a representative office in Uruguay, where the business keeps on growing in accordance with the macroeconomic situation in the Southern Cone.
Regarding the possibility of buying other companies, Serra seemed very determined. “The cost of a bank has nothing to do with the price. It is very complex to appraise a bank when you want to purchase it”. He believes that the purchase can turn out very badly, due to the fact that you can never completely appraise what you will find following the operation.
As for the possibility of opening new markets in Latin America, Serra pointed out that even though other local traders have opted for other countries of the region, MoraBanc still doesn’t have the need to follow those footsteps. For the moment they are confortable just the way they are, and in several years they may look into new openings.
“The model portfolio was trendy 20 years ago”
As far as his investment policy, he told us that better products are being released every day for small clients, however when it comes to big clients everything is tailored in accordance with their individual needs. “We are not very keen in model portfolios; we talk more in terms of personal risk profile. The model portfolio was trendy 20 years ago, when the transactions were very expensive”, whereas today the technology changes allow more suitable investments.
Security and legal structure versus product
Serra, who pointed out that they will adapt their offer to the needs of their clients, believes that currently clients do not demand products, since “people are more worried about security and legal structure”. Thus, he believes that if before the clients were searching for the perfect product, right now what prevails are the two aforementioned concepts due to the current conditions in the sector. “The shock that the clients in Cyprus have experienced has given even more importance to the concept of legal security”.
As far as Asia is concerned, Serra pointed out “when we decide to go, it will be with the purpose of making money. On that continent there is a small amount of banks that earn money, while there are none earning money with private banking. You will need a lot of leverage in order to be able to operate in Asia. It is an area of product and leverage”, and of a lot of risk, he emphasized.
Mora has opened an office in Dubai which targets the expatriates who work in that region, rather than local clients. They work from their Swiss office with Asian clients in asset management, and they are trying to successfully capture this share of the market.