Luxembourg-headquartered Quintet Private Bank on Thursday posted its first net profit in four years as interest margins improved thanks to rising interest rates. Higher trading income and a one-time gain from the sale of its stake in EFA also underpinned its performance last year.
The Qatari-owned firm, also parent of private banks InsingerGillissen in the Netherlands and Puilaetco in Belgium, said in its annual report that it plans “ambitious measures” for this year and next in order to improve efficiency and to achieve “sustained profitability”.
Quintet generated 18.1 million euro in net income last year after incurring a net loss of 110.2 million loss in 2021, when it booked a one-off charge related to the liquidation of its unprofitable Bank am Bellevue unit in Switzerland. It also had reported losses for 2020 and 2019 after a small 800,000 euro profit in 2018.
“We are strengthening the foundation of our firm to support sustained growth,” said Group CEO Chris Allen, who assumed the leadership of Quintet last summer. “That includes through our strategy refresh – a series of measures we will implement consistently over the course of this year and 2024 – and our new five-year business plan.”
Quintet’s efficiency and cost-cutting strategy will eliminate 165 jobs, or 9 percent of its 2,000-strong workforce in six European countries, the firm already made clear last month.
Quintet’s gross operating income last year rose 14 percent last year to 524 million euro. This number was buoyed by better margins on deposits, which boosted interest income by 58.6 million euro. Its trading income from foreign exchange derivatives and equities jumped to 50.6 million last year from 31.9 million in 2021.
Dutch income up, Belgian down
In the Netherlands, where it operated InsingerGilissen, gross income rose to 110 million euro last year from 108 million in 2021. Its Dutch unit, with 323 FTEs, accounted for 21 percent of gross income. At Puilaetco in Belgium - 170 FTEs - gross income declined to 52 million euro from 55 million in 2021. Puilaetco’s Luxembourg unit was fully integrated into Quintet’s Luxembourg unit last year.
Quintet group gross income also included a one-time capital gain of 16.3 million euro from the sale of its stake in European Fund Administration, EFA, to Universal Investment last Spring. Quintet, formerly known as Kredietbank Luxembourg, was one of several founding shareholders of EFA when it was founded in 1996.
Revenue growth was supported by increased leading and was up 10 percent at 4.9 billion euro. Expenses fell 2 percent to 493 million euro.
As of December 31, 2022, total client assets stood at 86.7 billion euro, a 10.2 percent decline from the end of 2021 primarily due to a price impact linked to volatile financial markets. The firm expects total client assets to recover as markets stabilise.
‘Further investments’
“We will seize the opportunity, especially following the 2020 merger of our EU subsidiaries, to create additional economies of scale, reduce organisational complexity and increase collaboration in service to our clients,” Allen said in a statement.
“We also intend to make further investments in the bank this year, including in areas such as client experience, digitization and staff training. In combination, these measures will lead to greater productivity, increased revenues and lower expenses.”
Quintet’s Basel III common equity tier 1 ratio stood at 18.4 percent at the end of 2022, well above the regulatory threshold and up from 18 percent at the end of the previous year, Quintet said. The firm’s liquidity coverage ratio stood at 153.2 percent at the end of 2022, up from 138.5 percent at the end of 2021 and likewise well above the regulatory threshold. Current sources of funding and liquidity remain “extremely stable”, the bank said.
With some 2,000 people in 50 European cities, Quintet serves wealthy individuals and families and offers a range of services to institutional and professional clients, including family offices, foundations and external asset managers. Its brands include Brown Shipley in the UK, InsingerGilissen in the Netherlands, Merck Finck in Germany, Puilaetco in Belgium and units in Denmark and Luxembourg.
Since July 2012, Quintet Group is more than 99.9% owned by Qatar-based Precision Capital LLC, a firm controlled by the Al-Thani family.
Precision Capital CEO to retire
George Nasra, CEO of Precision Capital LLC and deputy chair of Quintet’s board, will retire at the end of this month, Quintet announced in its annual report.
“George has played a monumental role on the Board for the past 12 years, committing significant time and energy to our business and contributing his invaluable wisdom and experience,” said Rory Tapner, chair of Quintet’s board of directors.
“As Deputy Chair, he has been a tower of strength across a wide range of important committees and the principal point of contact with our shareholder. For all of this and more, the Board owes him our deepest gratitude and respect. I am sure that he will remain a great friend and ally of Quintet as we move forward.”
As a Jordanian banker, Nasra has worked for various banks in the middle east throughout his career, including in Jordan, Kuwait and Qatar.
