Global Private Banking Awards 2017: Winners’ Profiles – National Winners (Central and Eastern Europe)

Best Private Bank in Central and Eastern Europe;
Best Private Bank in Austria;
Best Private Bank in Croatia
Erste Private Banking

Erste Private Banking is one of the leading wealth managers in Central and Eastern Europe and the largest wealth manager in Austria.  The bank has more than 16,000 private clients with combined assets of €17bn ($20bn), serviced from its headquarters in Vienna and its local private banking units in the Czech Republic, Croatia, Hungary, Romania and Slovakia.

The bank claims to offer a comprehensive range of services covering all aspects of private banking, wealth management, financial planning and execution services, as well as cross-border and cross-jurisdictional services across Central and Eastern Europe.

Last year, the private bank was able to acquire more than 400 clients from Erste’s retail network in Austria. Wolfgang Traindl, head of private banking and institutional clients at Erste Bank Österreich, says: “As a private bank within an universal bank, we can offer our clients, besides wealth management and advisory services, a full range of private banking, real estate and corporate products, and services like transaction banking or short and long-term financing. On the advisory side, we strongly emphasise guiding our clients into sustainable investment and philanthropy.” 

Erste has been providing private banking services in Croatia since 2011, and has offices in Zagreb, Rijeka and Split, servicing more than 800 high net worth clients. “In a highly competitive environment of ever-shrinking yield universe, we have managed to create products that offer value to our clients, while taking into account their desired risk exposures,” says Kristina Buconjić, head of private banking at Erste Bank in Croatia. 

“We assume that next year, with changing yield trends, will be especially challenging but we stand ready to take it up.” PG 

Best Private Bank in the Middle East;
Best Private Bank in Russia
Credit Suisse

Credit Suisse enjoyed a huge surge in its private banking assets during 2016, with $30bn in net new money, up from $19bn the year before, and commentators agree that it is catching up with key Swiss rival UBS, particularly in the penetration of key markets such as Asia Pacific, where the management believes there is space for a much greater range of competitors. 

Yet the bank still receives much criticism for its business model, which aims to entwine private banking and investment banking to make them more inter-dependent. The whole strategy is based on encouraging private banking clients to do deals requiring M&A specialisation or other capital markets skills. Credit Suisse bankers claim two thirds of private clients use these services, although outsiders are more sceptical, suggesting a lower level of penetration.

“There are very few entrepreneurial clients on the private banking side who don’t do investment banking business with us and very few investment banking clients who don’t do private banking business with us,” suggests Franceso de Ferrari, head of Credit Suisse Private Banking for the Asia Pacific region.

Indeed, the bank has set up a working group to help further integrate the two divisions in order to boost profits, although some critics believe the amount of business generated by the wealth management division is not enough to keep a specialist investment banking unit well fed and watered.

The bank is also once again building up its asset management subsidiary, most of which was previously sold off, but this time specialising in alternative assets, rather than the traditional funds of old, which are being made available to private clients. The Middle East remains a major priority as do the emerging markets of Eastern Europe. Although Credit Suisse has recently downsized in Russia, it still remains a prominent player there and is happy to work with clients who are at a much earlier stage in the business cycle, providing the bank can lend money to them.

“Most of the wealth is new wealth, generated by first generation entrepreneurs,” says Robert Cielen, head of emerging Europe at Credit Suisse, discussing his experiences of serving clients across the region. “One of the first priorities is not just to help the clients manage their wealth but to grow their business. We try to position ourselves also as a bank to lend to these clients. Our discussion always starts with: ‘How is your business doing and how can we help you grow?’” YB

Best Private Bank in Bulgaria;
Best Private Bank in Slovakia
UniCredit CEE Private Banking

UniCredit CEE Private Banking serves nine countries across Central and Eastern Europe. Its approach to private banking benefits from following the UniCredit Global Private Banking strategy, combined with local presence and deep understanding of the different markets and client segments in the region.

The bank defines its business model as one that combines a ‘need-based’ advisory approach with a global investment strategy. 

“Through our need-based advisory we aim not only to identify the current needs of our clients, but also the ones they would have from a broader life perspective,” explains Nadejda Pavlova-Nincheva, head of private banking at UniCredit Bulbank. “We want to create tailor-made solutions and, supported by a thorough understanding of clients’ needs, to foresee and develop new services that they might require in the future.”

Ms Pavlova-Nincheva attributes the growth of their business in Bulgaria to their focus on building trust and sustainable relationships with customers. Key growth strategies for the past years have been based on strengthening its existing competitive advantage by introducing new products, focusing on the best implementation of new regulations such as MiFID II, and enhancing clients’ experience via innovations in digital communication and technology.

In Slovakia, and in the current low interest rate environment, one of the main challenges faced by the bank is to provide attractive investment solutions to a clientele that is still very conservative. “We do this by offering open architecture funds and innovative structured products. Additionally, we support [our clients] in the field of wealth transfer to next generation,” says Roman Hajduk, head of private banking sales in Slovakia. 

Targeting the next generation of clients, UniCredit has developed a number of educational initiatives, like its ‘Youngsters Academy’ which provides knowledge about business management, innovation and personal investment. Thanks to these initiatives, the bank can contribute positively to the development of family businesses, while establishing a long-term, sustainable cooperation between clients’ families and the bank.

“In addition to that, we are very committed to innovation and see a lot of space in the field of the development of applications that can be customised according to client needs, and are able to monitor market situations and provide advice,” Mr Hajduk adds. PG

Best Private Bank in Romania;
Best Private Bank in Poland
Raiffeisen Bank International

Austria’s Raiffeisen Bank International has a highly nuanced understanding of the different needs of different customers in different countries.

This helps to explain its range of successes in this year’s awards.

In Romania, for example, “customers have a strong preference for basic investment instruments”, according to Fabian Stenzel, head of the International Affluent and Private Banking division.

In Poland, on the other hand, “customers prefer more complex financial solutions like, for example, unit-linked products”.

However, Mr Stenzel also understands what the two countries have in common: “Generally speaking, both markets are still quite young compared to Western European markets regarding the private banking and wealth management business.”

But then again, he is anxious not to generalise about the customers of any one country. “The product we sell is holistic advice,” says Mr Stenzel. “The outcome for the customers: tailor-made financial solutions.”

Raiffeisen Bank International has a strong brand in Central and Eastern Europe, and is continuing its expansion into new markets.

Back in 2013 it successfully set up private banking in Croatia, and in 2018 it plans to offer wealth management in Serbia.

Mr Stenzel regards the private bank’s inclusion within a large universal bank, Raiffeisen Banking Group Austria, as an important part of its success. This status allows the banking group to match the service to the client. “As customer wealth grows and financial needs develop further, a customer enters the next segment to optimize and receive tailor-made banking services according to his or her growing financial demands,” says Mr Stenzel. 

“This way we cover the needs of basically all the customers, irrespective of their level of accumulated wealth. In this scheme, private banking naturally represents the highest and most granular level of customer service,” he adds. DT

Best Private Bank in Romania;
Best Private Bank in Poland
Raiffeisen Bank International

Austria’s Raiffeisen Bank International has a highly nuanced understanding of the different needs of different customers in different countries.

This helps to explain its range of successes in this year’s awards.

In Romania, for example, “customers have a strong preference for basic investment instruments”, according to Fabian Stenzel, head of the International Affluent and Private Banking division.

In Poland, on the other hand, “customers prefer more complex financial solutions like, for example, unit-linked products”.

However, Mr Stenzel also understands what the two countries have in common: “Generally speaking, both markets are still quite young compared to Western European markets regarding the private banking and wealth management business.”

But then again, he is anxious not to generalise about the customers of any one country. “The product we sell is holistic advice,” says Mr Stenzel. “The outcome for the customers: tailor-made financial solutions.”

Raiffeisen Bank International has a strong brand in Central and Eastern Europe, and is continuing its expansion into new markets.

Back in 2013 it successfully set up private banking in Croatia, and in 2018 it plans to offer wealth management in Serbia.

Mr Stenzel regards the private bank’s inclusion within a large universal bank, Raiffeisen Banking Group Austria, as an important part of its success. This status allows the banking group to match the service to the client. “As customer wealth grows and financial needs develop further, a customer enters the next segment to optimize and receive tailor-made banking services according to his or her growing financial demands,” says Mr Stenzel. 

“This way we cover the needs of basically all the customers, irrespective of their level of accumulated wealth. In this scheme, private banking naturally represents the highest and most granular level of customer service,” he adds. DT

Best Private Bank in Hungary
OTP Private Banking

OTP Private Banking, part of OTP Bank, is present in nine countries across the Central and Eastern European region, managing €5.3bn ($6.25bn) in client assets. Hungary is by far its largest market, making up 78 per cent of AuM.

In Hungary, the bank enjoyed an above-the-market AuM growth of 15.2 per cent in 2016, maintaining its dominant market share of 34 per cent.

“Our biggest success last year was that we were able to keep up the growth dynamics and preserve profitability at the same time,” highlights András Takács, managing director and head of wealth and investment management. “It is a great achievement considering that wealth market trends and shrinking interest margins in the CEE region are putting big pressure on the profitability of private banking businesses.”

In 2016, OTP Private Banking shifted from a client number-based approach to an AuM-focused growth strategy, allowing relationship managers to spend more time on investment advisory and on acquiring new clients with higher AuM. Clients with lower AuM were migrated to OTP Bank’s Premium service segments.

OTP Bank has started a comprehensive digitisation strategy with the view to service clients efficiently without the need to meet at a branch. Within that framework, the private bank is focusing on providing its clientele with new innovative digital solutions. “In the recent past we have focused on the digitisation of transaction management, while now our focus is on the digitisation of the investment advisory process,” he says.

“We have to face further challenges in the coming years, like the increasing regulatory pressure and continuing decrease of profit margins,” adds Mr Takács. “As an answer to these challenges, we have developed a five-year business strategy which targets both efficiency enhancement and growth preservation.” Among the many projects in progress is the implementation of a centralised, virtual private banking hub.

OTP Bank’s SME segment is also a source for the acquisition of new clients for the private bank. “Entrepreneurs and small business owners have both business and retail banking needs and they value a single point of contact. Recognising these needs, and uniquely on the Hungarian market, we set up a joint SME-private banking value proposition called ‘SME Gold package’, offering a one-stop shop for this entrepreneurial segment,” Mr Takács adds. PG

Best Private Bank in the Czech Republic
KB Private Banking Komerční Banka a.s. 

Komerční Banka is a local bank, and it regards this characteristic as key to its success.

“Deep focus, specialization and knowledge of the local market are our significant advantages,” says Petr Slabý, director of private banking, though he also notes that clients with “international investment needs” can use the worldwide network provided by Société Générale Private Banking, a sister company. Société Générale is the majority shareholder of Komercni Banka.

Komerční Banka Private Banking, 95 per cent of whose clients are Czech citizens, has grown rapidly in recent years – outperforming the Czech market as a whole, according to Mr Slabý.

Between 2013 and 2016 it has shown a compound annual growth rate of 13 per cent assets under management, 22 per cent for net banking income, and 9 per cent for number of clients.

“There is a story behind the rise in client numbers and assets,” says Mr Slabý. “In mid-2014, we were the first in the Czech
market to set up a dedicated wealth planning and financing team focused on servicing successful business owners who seek either to transfer ownership from the first to the second generation or to sell their businesses. Three years later, new assets from company sales and dividend payouts became the main engine of our new assets.”

Mr Slabý adds: “Another part of the story is our capability to offer innovative investment solutions, such as private equity club deals, and real estate club deals that invest in large multi-use buildings in Prague.” He concludes: “In order to continue being the best partner for our clients, we are further developing our next generation strategies.”

Komerční Banka Private Banking also achieves a high staff retention rate – something appreciated by all clients and all private banks. Asked how it has managed this, Mr Slabý cites a concentration on internal recruitment. Most private bankers have worked there for 10 years-plus. 

“Our teams are primarily composed of motivated internal top talents with a strong career record in KB Group,” he says. DT