Whereas 2011 heralded a new era of structural change confronting the private banking industry – with that change now well under way – the key trend in 2012 has been a changing of the guard, reflected in the voting behaviour of the panel of judges for the fourth annual Global Private Banking Awards, from PWM and The Banker magazines.

Formerly all-conquering banks with a global reach, such as HSBC and Barclays, have maybe come to the end of a cycle of dominance, although HSBC still kept its crown in the Middle East. That was due to significant local efforts, rather than a broader global strategy.

A combination of factors has affected some major global names, including internal problems associated with compliance, failure to implement effective succession planning and perhaps most damaging of all, a lack of innovation to business and investment models, which are slowly approaching their sell-buy date.

This is clearly a cyclical game, however. Those banks, including leading player UBS, which were once hit by similar, some would say even greater problems, are fighting back. Not only has UBS restructured and re-inforced its leadership, but it has also fought for market share in Asia, where much of its expansion-based resources have been concentrated.

The awards process also identified those institutions, including Swiss stalwarts Pictet, which have maintained their strength through providing service and sticking to their principles of traditional private banking, while also fast developing a fund and asset management capability, to augment their white-gloved old-school offering.

The judges also detected a huge improvement of quality of submissions in some, though not all, developing markets – China and Russia in particular – and an increased polarisation between those banks which are sensitive to local needs and those who take on an increasingly global approach and ignore local difficulties and appetites.

This bifurcation, combined with a changing in fortunes of several key players, is nicely summarised by Swiss judge Shelby Du Pasquier, head of the banking and finance group at Geneva-based lawyers Lenz & Staehelin. “We can see the evolution of private banking in a rapidly changing environment, with a concentration of the market players in two distinct groups,” he says.

“On the one hand, we have large banking groups with a global ambition and the means to achieve those goals. On the other hand, we see the emergence of small, or smaller, niche players. These do not have the global reach of the former group, but at the same time, they are not plagued by the compliance issues and related reputational risks that the global groups face.”

The judges also drew attention to some boutique operations, in both Europe and the US, whose business models are looking increasingly attractive during today’s challenging economic times.

“It was indeed some of these smaller entrants who provided some of the best presentations,” says Simeon Fowler, Hong Kong-based CEO of recruitment consultancy Fox Partnership. “Some of the bigger institutions have tended to trade on their historic reputations and relaxed. This has led to the domestic players being able to take advantage of this and make gains in their home markets.”

But another group of banks looks poised to grab market share in the future, not just in their own domestic developing markets, but also in nearby countries where they have expansion plans. These newly self-confident banks, such as Itaú in Latin America, CIMB in Malaysia and National Bank of Abu Dhabi in the United Arab Emirates, are forming an expanding group, which has broad ambitions, but come from a developing market rather than a global mentality and tradition.

In trying to improve their levels of service, increasing numbers of private banks are using client feedback and insight to identify their own strengths and weaknesses. “I don’t think that in many cases they really know what to do with the insight or even how to get it,” reflects awards judge Seb Dovey, founding partner of wealth management think-rank Scorpio Partnership. “But they do appear to recognise that it might just come in useful.”

A transformation in portfolio management is also taking place, with leading Swiss institutions showing the way, particularly spurred by the shedding of Swiss secrecy and tax-led advantages. These mean that in order to survive, they must improve their investment management in order to attract and keep a sceptical and more demanding client-base.

“The high net worth space is increasingly adopting institutional quality tools in their asset allocation and manager selection approaches,” confirms Amin Rajan, CEO of the Create-Research consultancy. “This reflects two trends: the adoption of good practices from other sectors and the widening of the client-base to include pension plans and institutional intermediaries.”

 

And the winners are...

 

Best Global Private Bank
Citi Private Bank
Highly Commended: UBS, Bank Julius Baer

Best Private Bank in Asia
UBS
Highly Commended: HSBC Private Bank, Standard Chartered Private Bank

Best Private Bank in Europe
Pictet & Cie
Highly Commended: UBS, Lombard Odier & Cie

Best Private Bank in Central and Eastern Europe
Erste Private Banking
Highly Commended: UBS

Best Private Bank in the Middle East
HSBC Private Bank
Highly Commended: Standard Chartered Private Bank

Best Private Bank in the US
Northern Trust
Highly Commended: JP Morgan Private Bank, Wells Fargo Private Bank

Best Private Bank in Latin America
Itaú Private Bank
Highly Commended: Santander Private Banking, JP Morgan Private Bank

Best Private Bank in Brazil
Itaú Private Bank
Highly Commended: Bradesco Private Bank

Best Private Bank in China
China Merchants Bank
Highly Commended: Agricultural Bank of China, ICBC Private Banking

Best Private Bank in India
Standard Chartered Private Bank
Highly Commended: HDFC Bank

Best Private Bank in Russia
Bank Zenit
Highly Commended: Nomos Bank

Best Private Bank in Hong Kong
UBS
Highly Commended: Citi Private Bank, HSBC Private Bank

Best Private Bank in Singapore
DBS Bank
Highly Commended: Standard Chartered

Best Private Bank in Malaysia
CIMB Private Banking

Best Private Bank in Korea
Hana Bank
Highly Commended: Shinhan Bank

Best Private Bank in Taiwan
Chinatrust Commercial Bank
Highly Commended: Taipei Fubon Bank, Taishin International Bank

Best Private Bank in Thailand
Kasikornbankgroup

Best Private Bank in Lebanon
Audi Saradar Private Bank
Highly Commended: Blominvest Bank

Best Private Bank in Turkey
Akbank Private Banking
Highly Commended: Garanti Masters Private Banking, DenizBank Private Banking

Best Private Bank in United Arab Emirates
National Bank of Abu Dhabi
Highly Commended: Emirates NBD Private Banking

Best Private Bank in Belgium
ING Private Banking
Highly Commended: KBC Private Banking

Best Private Bank in France
BNP Paribas Wealth Management
Highly Commended: ABN AMRO Private Banking

Best Private Bank in Germany
Berenberg Bank
Highly Commended: Deutsche Bank Private Wealth Management

Best Private Bank in Italy
Banca Generali
Highly Commended: Intesa Sanpaolo Private Banking

Best Private Bank in Luxembourg
Société Générale Private Banking
Highly Commended: BNP Paribas Wealth Management

Best Private Bank in the Nordics
SEB Private Banking
Highly Commended: Danske Bank

Best Private Bank in Spain
BBVA Banca Privada
Highly Commended: Caixa Bank

Best Private Bank in Switzerland
Pictet & Cie
Highly Commended: Bank Julius Baer, Lombard Odier & Cie

Best Private Bank in the UK
Coutts
Highly Commended: Schroders Private Banking

Best Private Bank in Canada
RBC Welath Management
Highly Commended: Scotia Private Client Group

Best Private Bank in Chile
LlarrainVial

Best Brand in Private Banking
Pictet & Cie
Highly Commended: UBS

Best Private Banking Boutique
Schroders Private Banking
Highly Commended: Fieldpoint Private

Best Private Bank for Customer Service
Citi Private Bank
Highly Commended: Pictet & Cie, BNZ Private Bank

Best Private Bank for Innovation
Northern Trust
Highly Commended: Danske Bank, Hana Bank, Coutts

Best Private Bank for Socially Responsible Investing
Northern Trust
Highly Commended: Bank Sarasin

Best Private Bank for Philanthropy Services
BNP Paribas Wealth Management
Highly Commended: UBS

Best Management Team
Credit Suisse
Highly Commended: Bank Julius Baer

Most Improved Management Team
JP Morgan Private Bank
Highly Commended: Fieldpoint Private

Best leader in private banking
Boris Collardi, CEO, Bank Julius Baer

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Key facts: 2009-2012

• Over the past four years, the number of institutions entering the awards has consistently grown, and has almost doubled from just more than 50 in 2009 to 100 in 2012

• The range of awards categories has expanded accordingly, and the number of awards available to private banks has quadrupled from 10 in 2009 to 40 in 2012

• This year, thanks to the growing number of applications, the global private banking awards feature 11 new categories compared to 2011. These include categories for best domestic private banks in countries in Asia (Thailand, Malaysia), the Middle East (Lebanon, UAE), Europe (Luxembourg, France, Belgium), plus Chile, Canada, Russia and best private bank for philanthropy services

• The PWM/The Banker awards are increasingly gaining traction. In 2012, almost a third of the private banks participating in the awards are new entrants. These include some major institutions in key regions

• The awards show private banking is a cyclical game. This year, of the 32 institutions that have been crowned best private banks in any specific category, around 40 per cent have won an award for the first time. These include Akbank, Audi Saradar, Banca Generali, Banca Zenit, BNP Paribas, Coutts, Erste Bank, ING, Kasikornbank, LarrainVial, National Bank of Abu Dhabi, RBC and Société Générale. This year, 15 banks have re-entered the awards after an absence of two to three years

• On average, each private bank has applied for five awards categories, for a total of 500 category-specific entries

 

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Best Global Private Bank
Best private bank for customer service

Citi Private Bank

Citi, voted Best Private Bank in the PWM awards for the third year running, enjoyed $28bn (€21.5bn) of net new money in 2011, with improvements flagged by customer feedback in its Voice of the Client survey.

One of the key developments has been Asian expansion, involving significant investments in the bank’s structure and staffing. It is also clear from CEO Jane Fraser’s travel schedule and the anecdotes she shares with staff and journalists, that much of her face-time is spent in the developing markets of Asia and Latin America. In the coming years, she anticipates at least 40 per cent of the bank’s private clients in terms of wealth will come from Asia.

“Most private banks are at the moment trying to get their footprints built in Asia,” says Ms Fraser, whose private client operation oversees $268bn globally. “We are already there. For us, it’s now about the flows, the network and the connectivity, rather than getting the footprint itself built.”

Key recent investment communications to clients have included calls on longer-dated investment grade bonds, which Citi says are up 12 per cent during 2012 in the US and 17 per cent in Europe.

The bank prides itself in being able to channel client funds into tactical investment opportunities which may only have a short window of opportunity. “The on-going deleveraging is providing attractive opportunities for returns,” says Ms Fraser, who plans to alert clients to distressed deals, when the time is right. “We’re able to bring our clients access to interesting deal flow in a variety of ways including co-investment and specialist manager formats.”

Unlike some competitor banks in the developing markets however, Citi always stresses such deals need to be traded in the context of an “intelligent asset allocation and portfolio construction” format.

This strategic asset allocation model has been totally overhauled and renamed AVS, for Adapative Valuation Strategies, switching emphasis of forecasting from historical averages to market valuations. That said, Citi has also extended its historical database of figures for all asset classes back to 1910, so that more market crises and shocks are taken into account.

Citi, believes Ms Fraser, must try to help private clients negotiate their key concerns: economic instability which leaves clients worrying about how market volatility impacts their investments; and local political instability in some countries, which can lead to clients’ assets being seized by the state or rival business interests. “Many clients are looking for rule-of-law locations that are safe, while others are looking for economically safe investments,” she says. YB

Best Private Bank in Asia
Best Private Bank in Hong Kong

UBS

Wealth management is a core business for UBS, and it has built one of the largest multi-lingual wealth management teams in the Asian region. “Levering our integrated bank model, we have captured opportunities that have accompanied the rapid growth of wealth creation in Asia,” says Kathryn Shih, CEO of UBS Wealth Management Asia Pacific.

“Momentum has been particularly strong in Asia because more of the wealthy here are entrepreneurs than in Europe and the US. Their wealth is tied to their businesses and therefore they require not only personal investment advice but also investment banking and asset management services,” she explains.

The UBS Chief Investment Office oversees policy and strategy for approximately $1.5tn (€1.1tn) in assets, one of the largest capital pools in the world. Ms Shih claims this unit brings together an investment strategy for the entire wealth management group, which includes 900 analysts globally.

The wealth management market in Asia is growing rapidly. According to the BCG Global Wealth Report 2012, private wealth in Asia-Pacific excluding Japan increased by 10.7 per cent in 2011 to $23.7tn. Wealth in the region is expected to continue growing at a double-digit rate, with a projected compound annual growth rate of 11.1 per cent, reaching $40.1tn by the end of 2016.

“These gains should be driven largely by sustained strong GDP growth in China and India and overall stronger stockmarket performance,” says Ms Shih. “We believe the domestic onshore businesses will become an increasingly important driver of growth in the region. UBS is well-positioned in this regard.”

In Asia Pacific, UBS Wealth Management operates from 18 offices across seven countries. In addition to expanding the international business in Singapore and Hong Kong, UBS is investing in organic growth in domestic businesses in China, Japan, Hong Kong, Singapore, Australia, Taiwan and India, to tap these onshore markets.

China represents an important source of new business. The establishment of UBS Securities in China represents the first time a foreign-entity has been allowed to invest directly into a fully-licenced domestic securities firm. UBS Securities has access to secondary market trading and distribution activities in equity and debt markets, and offers domestic wealth management services via trading outlets in Beijing, Shanghai, Guangzhou, Hangzhou and Shenzhen, all located on China’s ‘Gold Coast’. The UBS AG Beijing Branch recently received final approval from the China Banking Regulatory Commission for its conversion into a locally-incorporated wholly foreign-owned bank.

As many clients own businesses, the bank also helps with the orderly management and transfer of wealth and businesses across multiple generations, and runs a series of educational programmes for younger people.

“Our most important challenge will always be to provide superior investment advice and solutions to preserve our clients’ wealth, grow their assets and ensure they have a healthy legacy to pass on to the next generation,” concludes Miss Shih. “To this end, UBS Wealth Management offers a comprehensive investment house, providing research-based advice, an open architecture and access to the best managers in the world. No other bank has the research capabilities geared to private clients that we do, or offers such comprehensive products and services globally, or has the high-quality client advisers, who can advise clients through these uncertain times.”

These are extraordinary claims for a bank to make, especially one that has been through the recent extreme difficulties of UBS. But in Asia, at least, its efforts appear to be reaping rewards. CJ

Best Private Bank in Europe
Best Private Bank in Switzerland
Best brand in private banking

Pictet & CIE

Secretive wealth manager Pictet, one of the few remaining pure limited partnership-structured private banks in Geneva, has always been reluctant to break down the assets handled by its fund management, wealth and custody arms. Client assets have risen slightly from €299bn in 2011 to €308bn in late-2012, but it is difficult to draw any conclusions from these totals.

What is more certain is that the recently accelerated fund management activity of the bank has helped the private wealth arm hold up well during the crisis, even luring funds from rival Swiss banks since 2008, particularly through launching a multi-currency suite of ultra-safe money market funds.

Whereas Pictet still has a traditional “white gloved” image of Swiss service, and critics attack it for being too conservative, the reality is somewhat different. There has been a massive concentration recently on improving asset management techniques, to assist handling of bonds, equities – particularly thematic plays – and alternatives such as hedge funds and private equity, which has given confidence to the bank’s private clients when it comes to management of their portfolios. The bank has also moved away from its traditional lakeside home to an up-and-coming area on Geneva’s outskirts.

While many in the international community talk about the fade-out of Swiss private banking, with the country’s tax and secrecy-led advantages being chipped away due to foreign pressure, the partners see things slightly differently. They reckon Pictet – along with other Swiss banks – can continue to profit from a multi-lingual hub of expertise at the centre of Europe, complimented in uncertain times by a stable and reliable political system, a strong currency and sound public finances.

And despite recent attacks on Swiss secrecy, the culture of discretion and privacy is seen as a key component of Switzerland’s – and Pictet’s – DNA.

In terms of geographical priorities, Pictet has pursued efforts in recent years to extend its coverage of high-growth markets in Europe, the Middle East and Asia, where the bank has had offices for 30 years. Its wealth management platforms have been reinforced considerably, through senior hires in both Singapore and Hong Kong, including the award of a banking licence in the latter city. During 2012, Pictet has opened offices in Taipei, Osaka, Amsterdam and Brussels. YB

Best Private Bank in Central and Eastern Europe

Erste Private Banking

Headquartered in Vienna but now operating across six countries – Austria, the Czech Republic, Slovakia, Hungary, Croatia and Romania – and with €14.8bn under management, Erste Private Banking is part of Erste Group, whose 17 million customers make it one of the largest banking groups in Central Europe, and is able to offer its clients all the benefits of a universal bank.

“Erste Private Banking combines individual customer care and private banking services with the profound knowledge, experience and reliability of the largest independent retail banking group in this region,” explains Peter Ipkovich, head of wealth creation and group private banking.

“The introduction of group standards and the combination of local management and central steering have proved the keys to our success,” he adds.

“Our clients benefit from the standardised high quality approach based on leveraged synergies and shared best practices in training, marketing, product development and asset management.”

The private bank is keen to offer its services to clients outside of the region’s major metropolitan areas, and the strong cooperation with the group’s retail branch network is a way for Erste to target high net worth individuals living in rural areas.

Looking forward, Mr Ipkovich stresses that the whole group is determined to rise to the challenges posed by the new legislative and regulatory demands coming from both the EU and local governments, while striving to always improve the quality of its offerings. “Upcoming enhancements include the roll out of a group-wide asset allocation process, the strengthening of the discretionary portfolio management business and the offering of innovative portfolio solutions,” he adds. ES

Best Private Bank in The Middle East

HSBC Private Bank

HSBC Private Bank has been recognised by PWM as the best institution in the Middle East, due to its strong regional penetration and also owing to the efforts of its Saudi Arabia-based subsidiary The Saudi British Bank (SABB).

“Thanks to HSBC’s presence across the region, we combine local knowledge with the connectivity of one of the largest banks in the world,” says Sobhi Tabbara, global market head Middle East, North Africa and Turkey at HSBC Private Bank.

“Through our global footprint HSBC also helps clients in the region benefit from the east to east axis on which the Middle East private bank sits. This year we’ve seen several major investments flow across an area stretching from the southern tip of Europe through Turkey to the Gulf. Utilising our intimate knowledge of these markets and our presence on the ground, we have arranged for clients to partner and invest in sectors as diverse as automotive, construction and energy.”

HSBC was also highly commended for its work in Asia and Hong Kong. Bernard Rennell, CEO North Asia, Global Private Banking and global head, Private Wealth Solutions, points out that by 2050, 19 of the 30 top economies in the world will come from the faster growing markets. There is a recognition that HSBC must raise its game in Asia and compete with a resurgent UBS.

“This is where wealth will be created – and these are the geographies we have been in for a very long time,” he says, adding that the bank “has close to 400 people in Asia focusing solely on wealth planning – these are not bankers as such but lawyers, accountants and trust professionals who specialise in assisting client families to plan strategically for intergenerational wealth transfer and preservation of their family wealth over the longer term.”

Amit Gupta, CEO Southeast Asia, adds that the investment team focus on the investment process rather than pushing products, ensuring that investments are put in the context of customers’ portfolios.

“There is a strong need for more customized solutions to meet specific needs (rather than taking a one-kind-fits-all approach) ,” he says. “This will increasingly be a challenge for smaller to medium size players.” CJ

Best Private Bank in the US
Best Private Bank for innovation
Best Private Bank for socially responsible investing

Northern Trust

Despite increasing competition, last year Northern Trust saw personal client assets under management grow 12.5 per cent year on year to $173.7bn, with deposits rising 22 per cent up to $22.5bn, as clients were attracted by the bank’s strong balance sheet.

The introduction of an investment management tool, Goals Powered Solutions, was one of the bank’s major innovations in 2011, representing the culmination of more than six years of research and development. Leveraging on the firm’s extensive experience in serving clients in the institutional market space, this approach converts each client’s needs, goals and aspirations into explicit financial liabilities. Client assets are matched-off according to each liability’s magnitude, duration and character.

“Our investment approach is intentional, interactive and adds precision to portfolio construction by directly matching a client’s assets and risk preferences to life goals,” says Jana Schreuder, president of Northern Trust’s Private Bank.

Other innovations include upgrades to the firm’s online banking tool. “Clients increasingly want to interact in ways that are digital, mobile and 24/7 accessible,” she says. “We have to continuously innovate our capabilities to match evolving needs.”

Northern Trust currently manages approximately $17bn globally in socially screened strategies. At the end of 2011, it managed more than 60 portfolios and pooled funds using socially responsible investing (SRI) screening techniques or related indices. It also offers portfolios managed by external investment firms. Among the firm’s SRI offerings is the Northern Trust Global Sustainability Index Fund, the first mutual fund to track a global sustainability index.

“We anticipate growing demand and increasing allocation to SRI strategies in the years ahead. Our work with clients suggests that SRI demand is greater with younger generations, so as wealth transfer occurs, we expect to see more assets flowing to investments with SRI themes,” explains Ms Schreuder.

Working in collaboration with Markit and Morningstar to create customised indices, Northern Trust last year developed a line of “next-generation” exchange traded funds, which enable investors for example to precisely manage the risks associated with interest rate and inflation.

Following regulatory shifts, Northern Trust consolidated its national bank and federal thrift charters from 16 states into the Northern Trust Company. This has resulted in a more seamless experience for clients who bank with the firm in multiple states.

The institution claims to serve more than 20 per cent of the Forbes 400 list of wealthiest Americans. ET

Best Private Bank in Latin America
Best Private Bank in Brazil

Itaú Private Bank

Itaú Private Bank is Latin America’s and Brazil’s largest wealth management player, with more than R$160bn (€60bn) of assets under management globally.

“We constantly look for growth opportunities such as increasing our penetration in the Hispanic markets, intensifying our global presence and consolidating our leadership in the Brazilian market,” says Flavio Souza, director at Itaú Private Bank.

Examples of expansion activities last year include the opening of a new office in Switzerland, the joint venture with Chile-based wealth manager Munita Cruzat & Claro, new hires and opening of branches in specific high-growth-potential regions in Brazil.

Cross-business referral agreements with the investment, corporate and retail banking teams have been responsible for more than 40 per cent of the bank’s $19bn net new money gathered over the past three years.

“The rise of entrepreneurial high net worth individuals (HNWs) and ultra high net worth individuals (UHNWs) in Latin America is boosting the demand for hybrid private and corporate solution portfolios, which calls for improved cross-selling with other business units,” says Mr Souza. In 2011, in particular, AUM growth in Brazil was driven by big-ticket deals from M&A transactions and the UHNWs drove most of the bank’s growth.

To capture the opportunities created by liquidity events, three years ago the bank developed the Solution Partners and real estate advisory services, focussing on clients’ illiquid assets.

In an environment of lower interest rates, clients seek higher returns and overlook liquidity. The bank’s offering of alternative investments, such as private equity and real estate has largely increased as a result, and clients’ portfolios have shifted from overnight deposit to credit products offering lower liquidity.

“This new macroeconomic scenario gives us the opportunity to offer more sophisticated products and show clients the value that a specialised private bank can add,” says Mr Souza. However, it is important to maintain cost efficiency to make up for lower margins, he explains.

The bank has been investing heavily in technological developments to reduce risk, scale business and create a more client-centred private bank experience. Investments were also made in mobile technologies. “Long-term growth will depend on further investments in technology and operations,” believes Mr Souza.

Investing in talent is equally crucial and a key differentiating factor for the bank. “Talent shortage is a real issue in our market. The market has been growing faster than the talent pool and, as a consequence, we have increasingly invested in training. Today, around 70 per cent of our bankers are Certified Financial Planners, versus a market average of 30 per cent.

“We strongly believe that the sustainability of our long term results depend on our client satisfaction with investment performance and quality of advisory process.”

Fundamental to that is the open architecture approach offering. The bank works with 70 independent asset managers.

“Today we are the largest distributor of third-party products in the region,” states Mr Souza. ET

Best Private Bank in China

China Merchants Bank

Despite increasing competition in the Chinese domestic market, and fast improving wealth management offerings from key national rivals Bank of China, Agricultural Bank of China and ICBC, China Merchants Bank has held onto the crown of Best Private Bank in China.

The increased dynamism of this expanding market is acknowledged by CMB’s chairman Ma Weihua. “All the banks, foreign or domestic, are forming their private banking departments to capture this rapid growth market,” he says.

“Now, it is not only the banks which are competing in this sphere. We are now faced with new rivals, in the shape of trust companies, securities companies and general finance houses. Even insurance companies are leaping into this market. They are all starting to build their own private banking departments, hoping to gain market share.”

Besides the major Chinese cities such as Beijing and Shanghai, CMB is also moving into second and third tier cities, dubbed “China’s emerging market” by the bank’s management. Those regions where local governments are emphasising economic growth are particular targets for private banking.

In the current environment, CMB’s customers are more in favour of fixed income, rather than equity products, with strong emphasis on liquidity, although a programme allowing distribution of external, regionally-based hedge funds to Chinese clients, has also enjoyed some success.

Key twin concerns for most Chinese private clients are the potential economic slowdown and political uncertainty associated with the change of leadership. CMB therefore expects its clients to diversify their assets across a range of products and markets to nullify any specific risks.

While the near-term private banking focus at CMB will be on the still under-serviced domestic market, there are clear efforts to strengthen the offshore platform through the recently purchased Wen Lung bank in Hong Kong. CMB will also be further utilising its representative offices in Taiwan, Singapore, New York and London. YB

Best Private Bank in India

Standard Chartered Private Bank

“More international than local banks and more local than international banks.” That is a key driver of Standard Chartered’s success in India, according to Sandeep Das, head of Private Banking, India. The global institution has been under scrutiny recently due to US allegations of hiding transactions with Iran, but its Indian business has held up well.

Much of its strength derives from its ability to provide an holistic approach to existing clients. “They appreciate our ability to deliver the whole bank to them – lending, mortgages, direct equities, bespoke investment products, and corporate banking. This is particularly well received as a majority of Asian clients (over 63 per cent) are entrepreneurs whose personal and business wealth is often inter-linked,” he says.

“The fast changing needs of Asia’s HNWs is creating intense pressure on the ‘people’ strategy in Asia’s wealth management firms.” The bank places a strong focus on nurturing talent to ensure longevity and to avoid high turnover.

As Asia gears up for a big transfer of wealth, Standard Chartered is also working with clients to shape the future of their next generation through a variety of educational programmes, such as a six-week long strategy masterclass where a select group of young adults work with executives and strategy teams to learn business management. It also works with Liverpool Football Club to provide global soccer clinics for the children of clients, and provides similar cricket academies in India.

“By providing a variety of educational programmes we are working with our clients to shape the future for their children, including sensitivity to themes such as sustainability, networking, lifestyle and personal branding,” says Mr Das. CJ

Best Private Bank in Russia

Bank Zenit

In 2011 Bank Zenit, one of the pioneers of private banking service in Russia with an 11-year history, launched a number of initiatives aimed at improving customer service, which also contributed to increasing profits. These included the introduction of portfolio management fees for clients not reaching the minimum threshold of RUB6m (€148,000) in assets, which also resulted in a better segmentation of its client base. A commission-based advisory service was also implemented, and fees were introduced to generate individually tailored financial reports, and to open and manage offshore accounts with the bank’s international banking partners.

“Many of our clients are becoming more aware of country risk and realise they need to diversify their portfolios,” says Andrey Likhovid, head of private banking. “But the Russian financial market is not very sophisticated and we cannot yet offer as many products as our Western partners do, so we give our clients the freedom to choose bespoke products and strategies provided by our overseas partners in Switzerland and Luxembourg.”

In Russia, a large proportion of clients’ assets are kept abroad, in foreign banks. “We want to expand, diversify and improve our services and convince our clients that private banking is also available in Russia,” he says.

Thanks to improved cross-selling, many clients of the group’s corporate bank have become clients of the private bank, boosting net new money. The bank’s new strategy is to promote products with an optimal combination of risk-return for the clients, as opposed to products that boost the bank’s margins, states Mr Likhovid.

“The number of clients willing to accept market risks dropped significantly and as a result we have concentrated more on the quality of our services and advice,” he says. “We managed not only to maintain our client base during periods of crisis but also to grow it.”

Zenit Private Banking mainly focuses on the affluent segment and the average account size was approximately RUB18m in 2011. But Mr Likhovid is confident that the private bank’s focus will naturally shift to the HNW and UHNW segments, also in light of the rapid growth of wealthy individuals in recent years.

Headquartered in Moscow, the private bank is rapidly expanding in the regions. “We want to further concentrate our efforts in exploring our regional client base as we see great potential for new money,” says Mr Likhovid. “Our main goal is to make sure that the quality of products and services provided to clients in the regions is the same as that provided in our main office in Moscow.” ET

Best Private Bank in Singapore

DBS Bank

Although DBS Bank has won the award of Best Private Bank in Singapore, it is the Chinese market which is the fastest growing in terms of sources of new asset flows for the partially state-owned institution.

“China is definitely a major growth market for us,” says Su Shan Tan, group head of wealth management at DBS.

With most wealthy Chinese having earned their wealth through business activity rather than inheritance, their demands are predominantly for services such as corporate banking, trade finance and capital markets expertise across the Asian region.

“Our relationship managers actively help clients to expand their network regionally and internationally, introducing clients to their peers in the same industry and providing value-added linkages between clients,” says Ms Tan, who has, for example, referred clients between China and Indonesia for commodity investments.

“We also linked a European family based in Singapore, which was interested in technology investments with a Shanghai client based in Singapore, to discuss potential business opportunities.”

Included among the investment opportunities highlighted by DBS’ chief investment officer Lim Say Boon have been “landmark” deals in Singapore and the rest of the region in the Asian bond arena. The bank also claims to have made some “very accurate and precise FX calls on tactical trading” in the Asian currency space, capturing volatility in both the Australian and Singapore dollars. Overweight positions in commodities and a preference for US over emerging ex-Asia equities have also benefited DBS clients.

The interesting thing about the bank’s business model is that it is the wealth management line which leads the direction of consumer banking, rather than the other way round. This holds both in core markets of Singapore and Hong Kong, and also the “onshore emerging markets of China, India and Indonesia, says Ms Tan. “Singapore has been our focal point so far, but this does not detract from our ambitions to widen our footprint throughout Asia.”

As well as regional Asian customers, DBS is keen to boost its book of international, non-Asian clients, looking to diversify their portfolios in Asia, with growing Asian currency markets, in particular the international renminbi space, proving popular among investors. DBS claims to be the first private bank to offer products in this area. YB

Best Private Bank in Malaysia

CIMB Private Banking

Established in 2002, CIMB Private Banking has successfully integrated CIMB Group’s investment, commercial and retail banking services through a one bank proposition, and transformed itself into a holistic wealth management partner for CIMB clients.

Its client acquisition and retention strategy implemented in 2010 focuses on the selective acquisition and deepening of existing client relationships and has continued to reap results: the average AUM per client has increased by another 25 per cent from MYR3.1m (€780,00) in May 2011 to MYR3.9m as of May 2012.

To improve service levels and ensure all clients get the attention they need, it has also boosted its private bankers by 20 per cent since 2010 and increased the average client relationship to just over five years in a testament to customer loyalty.

“As we grow from strength to strength, our focus will continue to lie in client centricity, and the sustainability of both our business and talents,” says Carolyn Leng, head and director, CIMB Private Banking, Malaysia.

“We expect the onshore wealth management landscape to change rapidly in the coming years, as we foresee more consolidation amongst the local players, whilst local authorities work on liberalising the financial market. This means that we have to be more agile to adapt to changing trends, without compromising on our value proposition.” CJ

Best Private Bank in Korea

Hana Bank

The ability to develop a close relationship with the client is as important as portfolio management, says Huyng-II Lee, head of the private banking business division at Hana Bank.

“Wealthy Korean clients expect caring services from their bank and private banker and that’s why we focus heavily on upgrading our total life care service,” says Mr Lee. Hana Bank, which has won the award for best Korean domestic private bank for the second year in a row, has further enhanced its programme called “from the cradle to the grave” by developing new services targeting the second generation of HNW clients. Also, the bank claims it was the first one to introduce “a golden age service” in Korea, believing that “superior service” for the elderly will become the key competitive factor in the private banking industry, as the population continues to age. Late last year the bank opened an advisory centre offering professional advice on transferring assets to the next generation.

Since its launch in 1995, the private bank’s assets and clients grew by an average of 10 per cent annually to reach KRW23,900bn (€16.5bn) last year, enjoying a 8.7 per cent growth rate year on year, versus the average of 3.3 per cent in Korea, according to Hana Bank. “We were able to achieve this growth performance through active asset management for existing clients and by strengthening our services and marketing to attract new clients,” says Mr Lee.

Korean wealthy clients rarely switch from a major bank to another and this makes it difficult to expand the business. This issue can be overcome by reinforcing the brand, and enhancing private bankers’ capability, investment products and services, believes Mr Lee.

On the investment side, to meet client demand, the bank focused on a range of mid risk/return products pursuing time deposit plus alpha returns, and at the same time strengthening its due diligence and risk management process. The bank sold KRW5bn of customized investments products, which drove a profit rise of more than 7 per cent per client.

The bank improved greatly its digital and mobile communications – with the launch for example of a mobile application through smartphone exclusive for HNWs, providing real time information on investments and market trends – and social network site channels to interact with clients. The bank also provided its private bankers with tablet computers and installed video conference systems to provide remote consulting to clients.

During 2011, Hana Financial Holdings acquired the majority of Korean Exchange Bank’s shares. The KEB brand will be kept for five years as a new unit of Hana Financial, with the practical merger between KEB and Hana Bank expected to take place after 2016.

“The main benefit of the acquisition will be the broadening of the client base, with KEB having the industry’s most extensive overseas business and branch networks,” says Mr Lee. “This would help expand our global presence in private banking.”

Geographically, one of the goals is to expand the private banking business in the Chinese market, after establishing a strategic alliance with China’s Jilin Bank. “We have been working long and hard towards our goal of becoming a global top 50 financial institution by 2015 and we hope our private banking business will be the driving force for achieving it.” ET

Best Private Bank in Taiwan

Chinatrust Commercial Bank

“As a point of differentiation from the product-driven business model, where most of our competitors are, Chinatrust has the largest and most experienced advisory team with the widest breadth of advisory services compared with other banks in Taiwan,” says Mr Su Kuo Huang, CEO, global retail banking at Chinatrust.

One plank of Chinatrust’s success is the development of a client segmentation model to recognise different customer needs more precisely. This year it also extended its advisory offering with real estate planning, while the next development is a total balance sheet advisory service.

More than 14 per cent of the Taiwanese population will be over 65 within this decade, and by 2025 more than 20 per cent will be over 65, explains Mr Su Kuo Huang. Financial planning for cross generation asset transfer is expected to bring the next wave of innovation. Chinatrust has already built family relationship with almost 40 per cent of its HNW clients, and plans to launch a family membership composed of interchangeable family benefits, and comprehensive advisory services fulfilling different family needs.

As market leader in retail banking and credit cards, Chinatrust has a tremendous client base of more than six million. “With strong data mining and segmentation abilities, Chinatrust manages to identify indicators that discover untapped potentials hidden in lower segments, and with corresponding marketing approaches, effectively migrates clients toward the private banking segment,” says Mr Su Kuo Huang. “As of August, the number of HNW clients and size of asset under management both achieved a year-to-date growth rate of 9 per cent.” CJ

Best Private Bank in Thailand

Kasikornbankgroup Private Banking

Since its launch in 2006, Kasikornbankgroup Private Banking has seen its business grow at a double digit rate to reach around $8bn in assets under management. This dedicated private banking department within the Thai retail bank offers wealthy clients a variety of both onshore and offshore investments. To cater to clients’ financial needs, it leverages on all Kasikornbankgroup’s resources, including the securities and asset management arms as well as the investment banking and capital market business divisions. The bank also works with a handful of third-party asset management firms and ten third-party providers to structure investment solutions.

The institution is particularly proud of its research capabilities, which have been recently strengthened by the partnership with the Macquarie Group, established in preparation for the Asean Economic Community slated for 2015.

Clients are required to have a minimum account size of Bath50m (€1.2m) with Kasikornbankgroup to become private banking customers. This threshold is set “to ensure that the service level and exclusivity are up to the international standard and beat local competitors”.

The bank, which currently captures around a third of the country’s total high net worth market, has expansion plans beyond Bangkok and surrounding areas. “We have started to expand our customer base to other strategic provinces as we see big growth opportunity in this emerging market,” says Nattharin Talthong, head of private banking.

“We believe HNWs are used to day to day transactions but are still new to wealth management. Therefore we are leveraging our existing retail banking networks to identify new opportunities and enhance existing relationships. We aim to be the first institution to provide information and advice on how to effectively manage wealth.”

The private bank offers inheritance, succession planning and tax guidance services, which are particularly in demand, as well as philanthropy and other lifestyle services. ET

Best Private Bank in Lebanon

Audi Saradar Private Bank

Part of the Audi Saradar Group and benefiting from one of the largest banking networks in the region with presence in 10 different countries, Audi Saradar Private Bank last year further developed its franchise by expanding its customer base by 4 per cent, despite the Arab revolutions.

“Audi Saradar Private Bank was able to take advantage of the fact that the latest financial crisis has left the Lebanese market relatively unscathed,” says Toufic Aouad, general manager at the private bank, although this is likely to change as unrest from Syria spreads through the Lebanese capital of Beirut, with many commentators fearing for the worst. “Although funds leaked throughout the region towards ‘safer’ shores such as European banks, many regional investors will always favour local and regional institutions,” he explains.

Audi Saradar private bankers are always “on the move” in markets outside Lebanon too, and focus on the middle to high net worth customers having wealth of $1m and $20m.

“Our private bankers offer a custom tailored and personalised experience to these clients who usually do not benefit from such a service from large international banks,” states Mr Aouad.

Audi Saradar’s expertise in the Lebanese and Mena markets has enabled the bank to offer some alternative products to investors in challenging international markets.

The bank’s investment team is based in Beirut and Geneva, where its fully-owned private banking subsidiary in Switzerland, Banque Audi (Suisse) has been operating for 35 years. With a portfolio management philosophy based on capital preservation, the private bank offers access to third-party funds primarily through its partnership with Russell Investments established in 2004.

“Our open architecture is poised to keep evolving towards further asset offering diversification such as customised structured products developed by third parties as well as in-house.”

One of the key recent developments has been the introduction of a relationship management tool which enables RMs to monitor client portfolios and individuals more effectively. Private bankers’ average tenure is approximately 10 years. ET

Best Private Bank in Turkey

Akbank Private Banking

Akbank Private Banking offers its clients tailor-made solutions in discretionary portfolio management services, in collaboration with AK Asset Management. In a country where open architecture is still relatively limited, the bank established a partnership with Franklin Templeton, distributing some of its mutual funds on a white label basis. Last year, the institution launched some innovative products, such as a composite commodity basket fund investing in global exchange traded funds (ETFs) and exchange traded commodities (ETCs).

Akbank is one of the pioneers in the development of the private sector bond issuances in the country, claims Saltik Galatali, head of Akbank Private Banking.

Borrowing rates are much lower than in the past, the borrowing requirements of the government having declined significantly and private sector companies are flocking in to this market. “We are the single most active distributor of the securities. We offer our clients a new channel of investment and, as these pay a premium over Treasuries, our clients are able to enjoy better yields,” says Mr Galatali.

Akbank has a “unique” treasury marketing unit and an execution department which caters only to private banking clients. This team also designs new products tailored to the client needs.

Akbank private banking’s customers can rely on the support of Sotheby International Realty for their investment decisions in alternatives, such as real estate and art.

The bank’s investment team has been strengthened to support relationship managers with more investment updates, timely investment propositions and quick and efficient pricing. A dedicated iPad app was developed to allow clients to check their account statements, transactions and economic and markets data analysis and see reports of new products.

“The most important challenge in Turkey is to prove your clients that they can get more from private banking than retail banking,” says Mr Galatali. “We have achieved a significant success on this front. Service quality, investment performance and a wider range of products speak for themselves now.”

The bank is planning the opening of two more branches in addition to the existing nine in the country. More recently, growth opportunities are found in the GCC region. “As Turkey becomes more and more stable with attractive yields and investment choice, investors in Gulf countries show a higher interest in Turkey, both in real estate or portfolio management services.”

The bank was the first Turkish private bank to set up an office in Dubai. “We are expecting a significant growth from our Dubai centre,” states Mr Galatali. ET

Best Private Bank in United Arab Emirates

National Bank of Abu Dhabi

“One of our greatest strengths in private banking is being part of National Bank of Abu Dhabi, the number one bank in the UAE, one of the 50 safest banks in the world and the safest bank in the Middle East,” says Ashraf Mazahreh, head of private banking, UAE, at National Bank of Abu Dhabi (NBAD).

The bank delivers a one-stop-shop of personalised financial solutions, leveraging the expertise of various businesses within the group, and offering tailored portfolio services which are designed around a client’s risk tolerance to different asset classes.

“The choice of onshore and offshore booking is our key unique selling point,” says Mr Mazahreh. “Clients can choose to implement their investment strategy through Private Banking in the UAE and/or NBAD Private Banking Suisse with an open-architecture platform supported by highly experienced investment specialists.”

Trust services, wealth protection and estate planning are also competitive services offered to clients through NBAD’s wholly-owned ‘NBAD Trust Company (Jersey) Limited’.

The bank describes its objective as keeping the client happy by protecting and growing his wealth through systematic and relevant advice on a consistent basis rather than focusing on a quick sale of investment products. “Transparency and efficiency in servicing clients remain as a priority for every private banker in NBAD,” says Mr Mazahreh. CJ

Best Private Bank in Belgium

ING Private Banking

“One of our strengths is that we operate as a real private bank within a universal bank,” says Philippe Wallez, general manager at ING Private Banking. “This is a rare phenomenon, as it means we can offer all the expertise of a private bank but also access to a very wide range of solutions and services from the universal banking.”

Unusually, the private bank offers easy access to lending. Mortgages for private banking clients are handled by ING’s mortgage centre, with a single point of contact.

The bank takes what it calls a ‘family business approach’ – packaging all the experts required by the owner of a business, throughout their lifecycle, such as coaching children preparing to take over a family business.

In the last year it has also added a wealth analysis and planning unit adding services such as M&A advice, fiscal and legal advice, and tax planning for clients and their businesses. For example, there are specialised services for stock options.

“Nearly all of our private banking clients use these services,” says Mr Wallez. “These services are free and so have proved very helpful in attracting new clients.”

The bank’s commitment to open architecture also sets it apart. Only 20 per cent of products recommended are ING’s propriatory offerings. “This has been an important reputational builder for us,” adds Mr Wallez.

In the last year, ING has also developed a platform called The Art Society for clients who are interested in art to meet.

“Our style is simple. We are not a typical red carpet and champagne bank,” concludes Mr Wallez. “People come to us for performance, for transparent, expert and professional services. With us, it does not start with nice buildings. Some of our competition exists more in form than in content.” CJ

Best Private Bank in France
Best Private Bank for philanthropy services

BNP Paribas Wealth Management

Whereas breaking out of the Franco-French financial ghetto has been a key priority for Jacques D’Estais, the board member responsible for all asset gathering activities at French bank BNP Paribas, the institution has demonstrated strength as the leading private bank in its home market.

While France represents €70bn of €264bn in client assets managed by BNP Paribas, the institution boasts 250 private banking centres across the French regions, with expertise evolving in newly fashionable areas of art advisory, philanthropy and ‘agrifinance’, which gives customers access to investments in French rural properties.

“Rural property allows clients to incorporate an attractive asset into their holdings, whilst giving them access to a certain lifestyle,” comments Vincent Lecomte, co-CEO of BNP Paribas Wealth Management, pointing to rising demand from Asian investors for French farmhouses.

In addition, business people are given access to two finance experts through the ‘Maisons des Entrepreneurs’ scheme, one dedicated to company issues and the other to their private wealth. Last year saw BNP Paribas also further develop its M&A advisory offering for private clients BNP Paribas was one of the first organisations to offer philanthropy services to its clients more than five years ago, and its increasing expertise in this area has been recognised by the judges of the awards. “We expect individual philanthropy to continue to increase as our clients are keen to be valuable contributors to society,” says Mr Lecomte. YB

Best Private Bank in Germany

Berenberg Bank

Berenberg, which is very much seen as an independent and unconflicted bank, attracted €1.3bn of new assets under management in 2011. The German bank’s culture centres on transparent fee models and advising rather than selling products, with most clients favouring an all-inclusive fee. Its portfolio management is particularly distinctive in providing a larger number of relationship managers – each adviser looks after only 50-55 clients.

Advisers are salaried and any variable salary components are not directly related to fee income but take customer loyalty and satisfaction into account. Employees stay with Berenberg for an average of six and a half years.

“We are delighted that the quality of our work has once again received recognition,” says Tindaro Siragusano, head of private banking at Berenberg.

“Today it is more important than ever to focus on the quality of the service provided,” he explains. “Through continuous improvement and adaption of our service offering, we have stayed ahead of changes in our market environment. We attach great importance to providing independent advice and bespoke services to clients. Drawing on our dedication, proximity to clients and our innovativeness as well as a distinctive corporate culture, we strive to build long-standing client relationships. Since mid 2011 we have also been offering our successful private banking service in the UK from offices based in the City of London.” CJ

Best Private Bank in Italy

Banca Generali

Banca Generali, part of Italy’s largest insurer, Trieste-headquartered Assicurazioni Generali Group, has been one of the country’s forerunners in offering third-party funds to clients, introducing its open architecture strategy in 2003. The bank’s flagship fund of funds Luxembourg Sicav, launched in 2008 and managed by the group’s Generali Fund Management, delegates the management of its 50 asset class compartments to 26 different third-party managers and over the past five years it has grown to more than €5bn in total assets.

Sub-advisers are given complete freedom in their investment decisions. All funds have the same pricing, regardless of the investment strategy, offering investors the possibility to switch funds quickly. “Our Luxembourg Sicav BG Selection was an important catalyst, both for its innovative structure and for the significant asset inflows boost,” states Piermario Motta, CEO of the bank.

The bank’s dedicated advisory department, of a dozen people, responds to clients’ requests and provides projections, simulations and analyses on portfolios, including assets held by third-party institutions. Over the years, the quality of advice provided by its 1500 financial advisers or promotori, the comprehensive range of investment funds, insurance solutions, asset management and banking services have contributed to the significant growth of the bank’s AUM, which have today reached almost €25bn. The bank enjoyed net inflows of €1.26bn last year and the positive trend continues with net new money of €1bn in the first half of 2012.

As regards technological innovation, very soon all private bankers will be provided with tablets offering solutions for market analysis, portfolio projections and asset allocation and, for the first time in Italy, they will be able to use holographic signatures to sign contracts, explains Mr Motta.

“The growth opportunity in financial advisory services and private banking in Italy are enormous,” he says. “Italy boasts one of the highest levels in the world in terms of personal wealth, with almost €3,600bn assets held by retail banks and post offices.”

Current issues faced by commercial institutions, because of the crisis, is heavily affecting the quality of their service to clients. “Clients are increasingly more aware of the advantages of using a specialist advisory service and structures dedicated to wealth management,” states Mr Motta. ET

Best Private Bank in Luxembourg

Société Générale Private Banking

While Luxembourg is considered by many as a somewhat sleepy territory, nestled harmlessly between France, Belgium and Germany, Société Générale Private Banking sees the Grand Duchy as playing an “interesting role” in its wealth management expansion blueprint.

Luxembourg is seen as a real onshore market, mainly due to a burgeoning non-resident European clientele, many of whom have come to work in the financial services industry. Most of these potential clients have cross-border financial interests.

But the tiny country of just over half a million residents has also been developing as a hub of expertise for financial engineering, in an international context, due to Luxembourg having long been a leader in financial products, developing cross-border retail mutual funds, for instance, before any other EU members.

SG’s private banking operation in Luxembourg, which has been recognised by the judges in this year’s award, boasts 70 staff in the country dedicated to client relations, featuring multi-lingual teams organised by country desks.

In addition, there are 30 specialists dedicated to wealth planning and fiduciary services and more than 25 investment staff providing portfolio management and investment solutions, including structured products, augmented by a trading room with direct market access and real-time dealing. All of these features show the commitment the bank has made to Luxembourg.

Being at the heart of Europe, clients there, with an eye on local opportunities, have benefited from the bank’s asset allocation calls, including a neutral weighting on developed market equities after the European summit at the end of June. This put the bank in a good position to capture market recovery between mid-summer and the end of September.

An overweight position in emerging market equities allowed profit taking at the end of September, after a 9 per cent performance gain in US dollars over three months. Also, SocGen clients made money on foreign exchange during the summer due to a more positive view of the Euro against the US dollar, compared to competitor banks’ negativity. YB

Best Private Bank in the Nordics

SEB Private Banking

Winning best private bank in the Nordics for the third year in a row, Stockholm-headquartered SEB is owned by Sweden’s powerful Wallenberg family and has SEK266bn (€31bn) in assets under management. Present in 12 countries, including hubs in Geneva and London, SEB also boasts a fully-fledged private banking operation in Singapore, a rarity among Nordic players. The bank has continued to attract a steady stream of new clients over the past 12 months, particularly from the entrepreneur segment, in line with its growth strategy.

“Our private banking business has always been a priority for SEB and it is especially in these uncertain and volatile markets that our role becomes fundamental,” says Martin Gärtner, global head of private banking. “Clients are far more cautious now. Our job is to protect and promote their interests. Our ambition is to offer high performing products for all market cycles and always have an up-to-date offer that is relevant to our clients.”

The bank has seen strong demand from clients for low volatility products and a desire to avoid cyclical risk in their portfolios. SEB has therefore developed its protection strategies using combinations of fixed income mandates, best of breed hedge funds and actively managed fixed income funds, and are happy to outsource asset classes to carefully chosen third parties. SEB uses its independent research group Global Investment Strategy (GIS) to utilise the research produced from within the bank and collaborate with other global investment banks both for research and designing of products. GIS also works together with SEB’s manager research unit to source appropriate funds globally.

SEB has been looking to develop its in-house capacity in real investments, in response to demand for assets that produce both yield and protection against inflation. The bank is looking at private equity products in the real estate space as well as investments in forestry, in response to client interest. ES

Best Private Bank in Spain

BBVA Banca Privada

Despite Spain’s bleak economic outlook, BBVA hopes to differentiate itself from its peers through a focus on user-friendliness for a generation of technology users.

“One of our main concerns is to improve communication and to adapt to new customer needs arising from new lifestyles,” says José Garcerán, director of BBVA Banca Privada for Spain and Portugal.

“Our aim is to allow customers to interact with us in the way that most suits them, whether that is telephone, email, branches, internet, or social networks, and we are investing a significant amount of our budget in innovation to achieve this goal. Being a pioneer in the use of new technology is what mainly differentiates us from our competitors.”

The bank is setting up of state-of-the-art branches to test new ways of interacting with recession-weary Spanish customers. The overarching aim is “to make life easier for clients, offering them global solutions , adapting to their lifestyles, and specially being 100 per cent available and transparent to them, allowing them choose the way they interact with us,” adds Mr Garcerán.

Another feature of BBVA’s offering that helped it earn its accolade as best private bank in Spain for the third year in a row for is its four-phase centrally structured proprietary portfolio management process, which allows it to provide clients with the best suited tailor-made solutions. CJ

Best Private Bank in the UK

Coutts

In response to client needs and regulatory demands, Coutts has implemented a true transformation of its UK business. Last year, under the leadership of UK CEO Michael Morley, the bank restructured the management of its business to create a clearer regional/client group focus. It also reorganised the products and services operation to enhance investment focus and suitability.

Emphasis on wealth management increased. Early in 2012, the reshaping of the front line business led to the creation of the wealth manager, who serves clients in tandem with the private banker.

The introduction of technology platform Avaloq enabled the bank to move from 31 legacy systems to one integrated solution, giving relationship managers a single view of clients’ portfolios, and allowing them to provide an integrated solution to clients’ financial needs.

The new platform brings increased transparency on charges and fees – as required by the UK Retail Distribution Review directive coming into effect on 1 January 2013 – as clients can view all their fees in one place and clearly distinguish Coutts’ value add.

The bank raised the key entry criteria for clients from £500,000 to £1m to focus on higher margin clients and achieve higher growth. It also put in place a more formal referral process with RBS Group corporate bank. Total client assets within HNW portfolios (with £1m+) increased from £31bn (€38.2bn) to £39bn in the year to the end of 2011, while Coutts Private Office, which caters to UHNWs with more than £10m, saw total client assets increase by 26 per cent to £4.6bn.

“Our clients value expert wealth management, tailored advice and a partnership they can trust,” says Mr Morley. “Coutts is a bank-owned wealth manager, a unique model that enables us to offer a complete private banking and wealth management advice service for both sides of the balance sheet.”

Coutts settled enforcement notices with UK regulators following investigations into two matters which it says preceded its new management team. The first involved sales of a specific insurance-linked product, for which clients have been compensated. The second involves record keeping procedures within anti money laundering systems, which have since been tightened up.

Last year, newly appointed overall CEO Rory Tapner drove the rebranding of Coutts, bringing together all the existing international businesses that had operated as RBS Coutts under the single name of Coutts, with a view that a single brand would support the bank’s international expansion strategy. Early in 2012, following the sale of its Latin American and African business, Coutts reduced its footprint from 172 to 78 countries, focussing on its home markets of the UK and the Channel Islands, Switzerland, Middle East, Singapore and Hong Kong, as well as some key growth markets in Western and Eastern Europe and Asia. ET

Best Private Bank in Canada

RBC Wealth Management

With Canada featuring increasingly in global allocations of private and institutional investors and Canadian banks favoured for their strong balance sheets, RBC Wealth Management is ramping up its operations on both domestic and international stages.

Named as top Canadian private bank by the judges, against stiff competition from the likes of BMO Harris and Scotia Bank, RBC has seen consistent growth of global customer assets, from $168bn in 2008 to $223bn today, claiming a leading 23 per cent market share of its domestic high net worth market. RBC also boasts of the highest fee-based assets per client adviser in Canadian private banking.

RBC Wealth Management’s group head George Lewis says the bank is differentiated from its competitors by an ability to go beyond traditional investments, through collaboration with internal partners within the group, including RBC Global Asset Management and RBC Capital Markets. The Canadian domestic operation is backed by a team of 180 experts focusing on tax, estate, financial planning and charitable giving.

In 2011, backed by resources from its parent company, RBC launched a long-term transformation of its wealth management business, designed to accelerate growth at home and abroad. Priorities include building high net worth market share in the UK and emerging markets, aided by increasing co-operation between asset and wealth management functions. With its expertise in natural resources investments, RBC is currently advocating total exposure of 10 to 20 per cent of overall portfolio holdings to this sector. YB

Best Private Bank in Chile

Larrainvial

LarrainVial is a privately held firm, established in Chile in 1934, with operations in Colombia, Brazil, Peru and the US. Last year, LarrainVial’s private banking division saw its assets under management grow by more than 11 per cent to reach $3bn, with its market share in the country increasing slightly to 10 per cent. The bank’s major achievement was the delivery of a more personalised service for its clients, with the introduction of a new mechanism to generate clients’ portfolios.

“Traditionally, the portfolio managers of the private bank were responsible for profiling clients’ portfolios, but now this task falls on different work groups comprising people from different areas in LarrainVial,” explains Gonzalo Córdova, the bank’s head of wealth management. “With this mechanism, we are able to reduce the risk for our clients.”

The bank also implemented a computerised system which enables the consolidation of domestic and foreign portfolios, allowing clients a more complete view of their assets. A new business management system provides relevant client information to private bankers, enhances client segmentation and allows the creation of personalised risk profiles.

LarrainVial also introduced two different client service models last year, advisory and discretionary, to better meet clients’ needs.

LarrainVial has partnerships with product platforms such as UBS, Pictet, Pershing and Allfunds, and products are selected by the bank’s product committee. “LarrainVial’s products represent a small part of our clients’ portfolios,” states Mr Córdova.

The strong economic growth in Chile and the Andean region, mainly driven by the mining sector, has considerably increased the number and the wealth of HNWs, and the region has become more and more becoming a land to conquer for private banks. “Because of this new competitive scenario, we have put additional efforts into generating customer loyalty,” explains Mr Córdova. New initiatives include seminars and events on various economic and financial topics as well as recreational/networking activities for clients.

Regional expansion is also on the agenda. “Through the bank’s offices in Peru and Colombia, we are able to detect new investment opportunities and deliver a personalised service.” Private bankers have started travelling to meet potential clients in other countries too, such as Argentina and Uruguay. ET

Best Private Banking Boutique

Schroders Private Banking

Although Schroders possesses a highly renowned brand, associated with the institution’s blue-blooded origins, resonating well beyond its Gresham Street headquarters in the City of London, Schroders Private Banking remains a small, though profitable, highly targeted operation. It has won PWM’s ‘Best Private Banking Boutique’ award in recognition of its achievements in this sphere.

In the three years to the end of September 2012, Schroders has enjoyed net inflows of £2.7bn, although the challenging environment of the last 14 months has seen these flows slowing down.

Some contrarian asset allocation calls have been shared with private clients during 2012, including a call to invest in developed markets at the expense of emerging markets. China in particularly has been underweighted by portfolio strategists at Schroders. This has proved a successful call, because Chinese equities have indeed lagged other markets in performance terms, as the economy has slowed. Together with the asset management arm of Schroders, the private bank is soon expected to issue a major call for European clients to invest on their own doorstep, in advance of an anticipated resurgence in the fortunes of Continental European bourses.

“For the longer-term, however, we are retaining a modest exposure to emerging markets,” says Rupert Robinson, London-based CEO of Schroders Private Banking. “This reflects the healthier finances of most emerging market governments compared to their developed world counterparts.”

In order to implement investment calls, structured products are used only “highly selectively” in order to give clients exposure to specific investment scenarios, with an internal team tasked with buying in these products from investment banks and breaking them down into constituent parts to ensure the best pricing deals for Schroders’ customers.

Mr Robinson gives an example of a particular scenario where such products are sold on to private clients. “We have recently created an instrument that gives investors exposure to dividend growth without exposure to underlying share prices,” he says.

The prime focus for future expansion will be the UK, where client assets have increased from £4.5bn in 2007 to £9.3bn today, with particular success in the bank’s ultra-high net worth client book, servicing individuals and families with more than £20m to invest. Now those clients with less assets, but potential for growth, will increasingly become a target for Schroders.

“We are working on adding high net worth clients – those with investable assets of £1m plus,” reveals Mr Robinson. “We are looking to attract those people who see the value in working with an independent, investment-led private bank.” YB

Best Management Team

Credit Suisse

With offices in 57 countries around the world, Credit Suisse is a global private bank which has made of the ‘one bank’ model its distinctive feature. Combining its strengths and expertise in its three main business lines – private banking, investment banking and asset management - the bank prides itself in offering wealthy clients advisory services and customised products.

“We are convinced that our business model helps us deliver the best products and solutions to our clients, across our organisation and division,” states Hans-Ulrich Meister, CEO private banking, at Credit Suisse. “We have established a dedicated governance structure in order to drive, measure and manage collaboration between our divisions.”

Credit Suisse claims it is the only institution including this specific activity within its annual reports. “We are targeting collaboration revenues of 18 to 20 per cent of net revenues and in 2011 we recorded collaboration revenues of SF4.3bn, representing 16.8 per cent of net revenues.”

Last year, Credit Suisse saw strong inflows in net new assets of SF31.7bn from its international businesses, particularly from emerging markets and the ultra high net worth segment.The bank also gained market share in its home market of Switzerland across most client segments and generated SF12.8bn of net new assets there in 2011. New clients have been attracted by the bank’s financial standing and a Tier 1 capital ratio of more than 18.2 per cent, which makes the bank “one of the strongest financial institutions in the world”.

Only the most experienced investment partners (IPs) provide advice to UHNWs and they look after no more than 10 to 20 clients. The “Solution Partners” group sits at the heart of “one bank” and helps leverage the bank’s best services on behalf of the client, working closely with the IPs and wealth planning.

“Best people” is one of the core elements of the private bank value proposition and Credit Suisse has formalised its training programme in its Business School, a fully-fledged corporate university, which employs 230 staff worldwide to deliver nearly 7,000 customised courses at every level. ET

Most Improved Management Team

JP Morgan Private Bank

JP Morgan Private Bank thinks of itself as “an investment bank for an individual’s personal wealth”. The institution employs an integrated team approach that aims at bringing together a wide-ranging expertise to provide comprehensive solutions for clients, tailored to their specific needs. Each integrated team is made up of bankers, investors and capital advisers and serves a single set of clients.

“Wealthy clients have complex needs and need advice-driven, holistic wealth management provided by a team of multi-disciplinary experts who share a common goal of achieving the best results for the client,” states Phil Di Iorio, chief executive officer of JP Morgan Global Wealth Management.

In the shorter-term, three key factors have contributed to generate positive financial results for the bank, explains Mr Di Iorio. “First, we expanded our credit book, both in traditional lending and in jumbo mortgages in the US. We stepped in to fill a void left by other providers, whose balance sheets are still under repair, and were able to use our fortress balance sheet to solve clients’ credit needs.”

Second, the bank focused on developing innovative solutions for clients. These included, for example, identifying opportunities in dislocated markets, such as the residential mortgage-backed securities market, China exposure through a “unique public-private partnership that almost no other institution can offer” and investing in smaller hedge fund managers executing micro strategies.

“We want our people to anticipate market trends, opportunities, risks and client needs. We also want our teams to develop innovative client solutions and bring those to market first,” says Mr Di Iorio.

Innovation is also critical in other areas of wealth management, such as wealth planning, he says. Through its in-house R&D arm, the bank works with global families to efficiently structure their wealth across multiple jurisdictions and remain compliant with all applicable regulations.

Finally, over the past two years, the number of client facing professionals has grown significantly, with a 50 per cent increase across Europe, Asia and Latin America.

Last year, the bank welcomed 5,000 new clients with a 25:1 client to adviser ratio.

“We will continue to focus on markets where wealth is being created most rapidly, particularly in places like Asia and Brazil. We also aim to capture additional shares in areas where the market has provided opportunities, such as Europe.” ET

Best Leader In Private Banking

Boris Collardi, CEO, Bank Julius Baer & Co

Boris Collardi was long-seen as the rising star or poster-boy of Swiss private banking: young and vibrant without the typical staid, Swiss grey-haired image. But his recent acquisition of the Merrill Lynch international wealth management business has cemented his image as a true leader.

His colleagues point out that this is by no means Mr Collardi’s first attempt at ground-breaking expansion. He absorbed the boutique ING Suisse unit, and was in for the Sarasin deal before Safra won the bidding process. A recent rights issue, demonstrating stockmarket confidence in Mr Collardi’s plans, will allow further potential acquisition activity.

But this expansion comes at a price, and the Julius Baer leader has had to break the unwelcome news of between 850 to 1,000 job losses among bankers in the acquired entity in his quest for profitability.

He is also setting down “targeted profitability improvement measures” for integration of the business. Between SFr60bn and SF70bn is expected to be transferred from Merill Lynch clients to the supervision of Bank Julius Baer.

The acquisition will go some way to satisfying Mr Collardi’s ambitions in Asia, which Julius Baer now claims as its “second home market”, a region he became particularly familiar with professionally during his time at Credit Suisse and personally, having married a Singaporean.

In addition to strengthening its positions in Singapore and Hong Kong, the Merrill deal has allowed Baer to boost its presence in India, with the eventual aim of lifting the portion of its managed assets sourced from growth markets, currently approaching 50 per cent, to nearer two thirds.

This is part of Mr Collardi’s vision of re-inventing his bank against a background of international attacks on Swiss secrecy and tax-led services. Although he previously attacked new business on two fronts and opened offices in Swiss regions over the last two years, it appears that domestic expansion has now reached a plateau, with Asia – and also Latin America and the Middle East – predominantly the new priorities.

Colleagues describe Mr Collardi as “energetic and restless”. When the bank was going through its initial growth spurts, staff were clearly motivated by a young, easily accessible leader, who enjoyed delegating and preferred a flat, modern hierarchy.

But now that Mr Collardi’s status has been established by a high-profile acquisition deal and he has made significant job-cuts, staff are perhaps slightly more nervous and on edge about serving and impressing an increasingly self-confident and powerful leader.YB

Profiles written by Yuri Bender, Ceri Jones, Elliot Smither and Elisa Trovato

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Meet the judges

Yuri Bender
Editor-in-Chief, Professional Wealth Management, based in London, UK

Yuri Bender is a financial journalist specialising in international asset management issues. He joined the FT group in 1992, launched FT Mandate in 1999 and Professional Wealth Management in 2001.

He is particularly interested in comparing business and distribution models of private banking and asset management groups. He chairs industry panels on these topics and writes regularly for the FT newspaper. Yuri studied Investment Management at the London Business School.

 

Seb Dovey
Partner, Scorpio Partnership, based in London, UK

Sebastian Dovey manages the development and execution of strategic recommendations surrounding marketing, business development, M&A and client services in wealth companies.

Sebastian has completed assignments around the globe for private banks, global banks, asset managers, family offices, technology firms, service providers, aggregators and start-up wealth management initiatives. He is also currently involved in creating and building enhanced client experience and education-based solutions for a number of companies. He is a regular commentator on the wealth management industry in the press and television as well as at conferences and academies.

 

Shelby du Pasquier
Head of Banking and Finance Group, Lenz & Staehelin, based in Geneva, Switzerland

Shelby du Pasquier is considered a leading lawyer in banking and financial services in Switzerland. He advises a number of Swiss and international financial institutions, as well as Swiss and offshore private equity, hedge funds and fund managers.

He was nominated by Chambers in 2011 as a leading individual in banking and finance and as regards investment funds. He is a frequent speaker at professional conferences on banking and financial law issues, as well as investment funds. Shelby is a board member of the Swiss National Bank.

Simeon Fowler
CEO, Fox Partnership group of companies, based in Singapore

Simeon Fowler’s financial career started in 1988 as a banker in London. In 1994 he moved to a national independent financial advisory business, and went on to qualify with the Chartered Insurance Institute.

In 1998 he joined an established London-based search and selection company specialising in recruiting top-flight individuals for private banks, wealth management firms and IFAs. In 1999 he set up the Fox Partnership with former colleague Philip Siddall.

Mr Fowler’s involvement with the business is still very much hands-on with him managing and overseeing top level search assignments for a select number of clients in the UK, Continental Europe, Middle East and Asia.

Fox has offices in London, Geneva, Singapore and Hong Kong.

 

Justin Ong
Partner, Pricewaterhouse Coopers, based in Luxembourg

Justin Ong is currently on a two year secondment from PwC Singapore. Justin has more than 20 years of experience working with wealth managers in Singapore, Asia and London.

Justin leads the Private Banking practice for PwC in Asia-Pacific, and in 2010 acted as the adviser to the Private Banking Advisory Group in Singapore, a think-tank sponsored by the Monetary Authority of Singapore, where the Singapore Private Banking Code of Conduct was born. He is an active member of the Stakeholder Engagement Sub-Committee within the reconstituted Private Banking Industry Group.

 

Alois Pirker
Research Director Wealth Management, AITE Group, based in Boston, US

Alois Pirker specialises in analysing trends in the wealth management market.

He has been published extensively on topics including the registered investment adviser space, financial planning, separately managed accounts and adviser focused platforms and tools. Before joining Aite Group, Mr Pirker worked with Celent’s Securities & Investments Group and at UBS Wealth Management.

 

Amin Rajan
CEO, Create-Research, based in London, UK

Create–Research is a think-tank that specialises in the future trends in global investment management. As its founder, Amin works with prominent partners to publish annual reports on prospective challenges and potential responses in the industry. He is the author of 20 research reports on different aspect of the investment value chain.

Amin also offers strategic advisory and coaching services to CEOs and CIOs in fund management as they grapple with unfolding industry dynamics.

He is a visiting professor at the Centre for Leadership Studies at Exeter University and a associate fellow at Oxford University’s Said Business School. He is on the WHU Programme Advisory Board at Otto Beisheim School of Management in Germany. He is also fellow at the Windsor Leadership Trust, specialising in ethical dilemmas.

 

Ray Soudah
Founder, MilleniumAssociates, based in Switzerland

Ray Soudah is the founding partner of MilleniumAssociates, the independent international M&A and corporate finance advisory firm, based in Switzerland and the UK. Founded in 2000, Millenium-Associates specialises in M&A and advisory services for the global financial services industry with particular focus on the global wealth and asset management sectors.

Ray has extensive multicultural, multilingual wealth management and private banking/investment banking expertise having held senior positions in territories as diverse as the US, Asia, the Middle East and Europe. Ray is a Harvard Business School & INSEAD Alumnus and speaks English, French, Greek and Japanese.