Winner: Citi Private Bank
Highly Commended: UBS, Bank Julius Baer
BEST GLOBAL PRIVATE BANK / Best Private Bank for Customer Service
Written by Yuri Bender
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.
Highly Commended: HSBC Private Bank, Standard Chartered Private Bank
BEST PRIVATE BANK IN ASIA / BEST PRIVATE BANK IN HONG KONG
Written by Ceri Jones
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.
Winner: Pictet & Cie
Highly Commended: UBS, Lombard Odier & Cie
BEST PRIVATE BANK IN EUROPE / Best Private Bank in Switzerland / Best Brand in Private Bank
Pictet & Cie
Written by Yuri Bender
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.
Winner: Erste Private Banking
Highly Commended: UBS
BEST PRIVATE BANK IN CENTRAL AND EASTERN EUROPE
Erste Private Banking
Written by Elliot Smither
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.
Winner: HSBC Private Bank
Highly Commended: Standard Chartered
Best Private Bank in the Middle East
HSBC Private Bank
Written by Ceri Jones
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.”
Winner: Northern Trust
Highly Commended: JP Morgan Private Bank, Wells Fargo Private Bank
BEST PRIVATE BANK IN THE US / Best Private Bank for innovation / Best Private Bank for Socially Responsible Investing
Written by Elisa Trovato
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.
Winner: Itaú Private Bank
Highly Commended: Santander Private Banking, JP Morgan Private Bank
BEST PRIVATE BANK IN LATIN AMERICA / BEST PRIVATE BANK IN BRAZIL
Itaú Private Bank
Written by Elisa Trovato
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.
Winner: Itaú Private Bank
Highly Commended:Bradesco Private Bank
Winner: China Merchants Bank
Highly Commended: Agricultural Bank of China, ICBC Private Banking
BEST PRIVATE BANK IN CHINA
China Merchants Bank
Written by Yuri Bender
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.
Winner: Standard Chartered Private Bank
Highly Commended: HDFC Bank
BEST PRIVATE BANK IN India
Standard Chartered Private Bank
Written by Ceri Jones
“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.
Winner: Bank Zenit
Highly Commended: Nomos Bank
BEST PRIVATE BANK IN Russia
Written by Elisa Trovato
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.”
Highly Commended: Citi Private Bank, HSBC Private Bank
Winner: DBS Bank
Highly Commended: Standard Chartered
BEST PRIVATE BANK IN SINGAPORE
Written by Yuri Bender
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.
Winner: CIMB Private Banking
BEST PRIVATE BANK IN Malaysia
CIMB Private Banking
Written by Ceri Jones
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.”
Winner: Hana Bank
Highly Commended: Shinhan Bank
BEST PRIVATE BANK IN South KOREA
Written by Elisa Trovato
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.”
Winner: Chinatrust Commercial Bank
Highly Commended: Taipei Fubon Bank, Taishin International Bank
Best Private Bank in Taiwan
Chinatrust Commercial Bank
Written by Ceri Jones
“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.”
BEST PRIVATE BANK IN Thailand
Kasikornbankgroup Private Banking
Written by Elisa Trovato
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.
Winner: Audi Saradar Private Bank
Highly Commended: Blominvest Bank
BEST PRIVATE BANK IN Lebanon
Audi Saradar Private Bank
Written by Elisa Trovato
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.
Winner: Akbank Private Banking
Highly Commended: Garanti Masters Private Banking, DenizBank Private Banking
BEST PRIVATE BANK in Turkey
Akbank Private Banking
Written by Elisa Trovato
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.
Winner: National Bank of Abu Dhabi
Highly Commended: Emirates NBD Private Banking
United Arab Emirates
National Bank of Abu Dhabi
Written by Ceri Jones
“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.