According to PwC, the Russian private banking market doesn’t exceed $ 12 milliard, while the wealthy Russians’ available cash assets are estimated at $ 400 milliard. Moscow alone is home to 88,000 millionaires and 44 multi-millionaires. Ulan Ilishkin, Rosbank Executive Vice President, speaks about the L’Hermitage Private Banking offer for those ready to venture into investments or entrust a reliable manager with their financial assets.
Let’s face it: depositing money at a bank is becoming an investor. It’s the easiest way to invest, but the Russian law on deposit insurance protects only a 1,400,000-rouble asset. Over the last seven years, depositors with 30 – 100 million in their bank accounts have been facing considerable institutional risks. With so many banking licenses revoked, only 500 banks of 1000 have remained in the Russian market now. The basic concept of our business is trust. Private banking, as well as its super-professional management, may just as well, be very nice. Nevertheless, the first thing people trust is the bank itself, as it’s the starting & standing point. Rosbank is the only bank in the Russian market which, according to the Forbes rating, has been a top-three most reliable bank for five years in a row. To a great extent, it’s the merit of our mother company - Société Générale, an international financial group, functioning as a global systemically important bank. If you know what kind of guarantor it is, you understand why depositors trust it. We can always resort to its help, but so far, it has never been necessary. Since 2014, all the mother company funding lines have been closed. We are self-sufficient, but Société Générale’s potential support gives our clients peace of mind. Financial and banking measures are, in my opinion, first and foremost, human beings. We can talk about different technologies and tools, but everything is generated by those you work with. Positive and constructive energies are born of resourceful and favourable conditions. In this world, you come across all manner of mighty men and women. Next to some, you fill up, get ignited, and move on, while others give you the feeling of spiritual bankruptcy. So, it’s vitally important to have a social circle of like-minded and complementary individuals. A vast personal network of contacts is a must-have too. There’s an interesting test: if you look through a list of 100-200 names and recognise 70-80 in 100, you’ve got a wide social circle. That’s what’s of great importance for developing your client network and partnerships. The ability for teamwork develops, among other things, the guard-against-errors skill. I’ve never believed one soldier could make a battle. Lone warriors might as well exist somewhere as every once in a while, we hear some famous names. Nevertheless, if a tough-guy leader builds no strong team, his results will never multiply due to the lack of team effort. I believe in the power of a think tank ensuring success. A while ago, I read about an exemplary experiment in which a professor of law and a group of law freshers and sophomores were to solve the same guard-against-errors problem. The team of 12-14 students did just as well as the all-knowing and experienced professor. The hive mind minimises mistakes, which is no small feat in banking. The dynamics of the Russian investment market we’ve been observing over the last one and a half years shows a tremendous deposit increase from 2.5-3 to 14 milliard. 2020 alone saw a 30 % growth in our various deposits. One or two million roubles is a good enough starting point in investments. In the Russian market, one can even start with buying a few cheap shares worth 1,000 roubles. When it comes to sizable sums, it’s one’s risk profile that matters. For some, losing 20-30 % of what they’ve invested is no problem. For others, even a 5% loss is rather painful. There’s a lot of psychology & emotion involved here. So, the first thing I always ask our new clients is how much spare money they’ve got. We do not sell banking products. Guided by our clients’ expectations, we develop well-balanced portfolios. We find conservative solutions for those whose risk profiles allow that, offering investment tools minimising risks and guaranteeing a profit, not so high but still higher than a bank deposit interest. Where the risks are higher, the game is all the more exciting too. Saying you will lose nothing would be bending the truth. Losses are inevitable. Nonetheless, there are tools minimising and compensating them, so in the end, you make a profit anyway, though, a bit lower than expected. In the meantime, if you take the EUR, for example, any profit made in this currency today is good indeed. The Société Générale Private Banking slogan is: ‘You can enjoy your fortune while we administer it’. That’s exactly how it works if you wish to get a passive income while attending to your business. You tell us, ‘I’d like to enjoy a beach holiday and fly my jet regularly from, say, the French Riviera to Moscow to run my business here’. In addition, your child must first attend a private school and then a fee-based university without your providing the funds for that.
The appropriate financial administration allows you to multiply the invested sum tenfold within ten years, enabling you to take care of everything. Some like trading via a broker to feel personally involved. We’ve got this option so, if you wish to take stocks in, we’ll do it for you, be it Russian or foreign bonds or shares. In the meantime, purchasing a stock share without using any protective tools is taking 100 % risks. Société Générale Group offers only covered investment solutions, and its structured products have always proved effective. A structured note usually includes from three to five underlying assets. Even if it falls 20-30 % below the level, we still pay 100 %. That’s what’s so good about it. As a rule, the investment revenue payments are quarterly for our investors to feel the pulse of the market. Moreover, the package contains a memory routine, so if a quarter passes with no payment due to a fall of stock and is followed by a boom in the next quarter, we pay for both periods. The more often it happens, the higher the payment potential is. We engage in complicated projects for those wishing to invest in real estate abroad or, say, buy a yacht. Our colleagues in Monaco specialise in that. We can assist in making your purchase in Southern France, London, Switzerland, and so on seamless. In this case, we act as partners and can offer an elaborate combination. Let’s say a client comes to Monaco or Geneva and says he wants to invest in real estate. We can grant him a mortgage, but it will cost more. He can transfer, say, 1,000,000 EUR, and we’ll work out a balanced investment portfolio, bringing a 5 % conservative profit in EUR, for him. Meanwhile, against this million-euro portfolio, depending on what it contains, with all the discounts considered, we can grant him a collateral loan of up to 700,000. Then, it’s up to the client to decide what to do with it. This very cheap loan can be used to buy a flat, say, in Saint-Raphaёl or Barcelona. Or the client can opt for street retail bringing, in case of a commercial facility, about 5% in EUR. Five here and five there, minus the low loan & portfolio management costs is an annual 7-8 % income in EUR, which is not half bad, in my view. That’s an example of what a structured investment is all about. Société Générale’s philosophy & practice is serving families, including our clients’ grand- and great-grandchildren. That’s what it’s always been like in France. Société Générale has been there for over 150 years, serving generation after generation in the same offices. Our logic is comprehensive: a mortgage is followed by other banking products & applicable discounts. Understanding a client’s and their family members’ expectations helps us to prepare a relevant offer. Meeting a living adult’s needs is one thing while taking care of the whole family, understanding which way it’s developing, is a wholly different kettle of fish. That’s the rationale of customer relations in Rosbank L’Hermitage Private Banking. Little by little, we are embracing European values. We’ve already become our clients’ home office, as is common practice all over Europe. We abide by such corporate values as transparency for our customers and absolute confidentiality where their personal data are concerned. Our ethics code is our responsibility, both corporate and social. We were the first private bank in Russia to donate part of our investment life insurance commission to the Children’s Down Syndrome Foundation and the Orphanage Graduates’ Social Adaptation Foundation. Now, we also donate part of our structured note commission to charity. All Société Générale Group Board members and Rosbank Management Board members are integrated into the Environmental Social Governance system via their KPIs.
Like many professionals, I’ve always been result-oriented, prepared to assume responsibility, and made it a point to be free from stereotypes. My work features all that, and in this sense, business and pleasure are inseparable for me. I am happy to be surrounded by like-minded people sharing my views, interests, and positive attitudes. And my work practice proves that many things can work out even better than I could ever imagine. In the meantime, I always opt for the best only as life is too short for anything else.
