Global Private Banking Awards 2017: Winners’ Profiles – Regional Winners

Best Global Private Bank;
Best Private Bank for Philanthropy Services Globally;
Best Private Bank for UHNW clients;
Best Initiative of the year in client-facing Technology
UBS Wealth Management

UBS Wealth Management is a player that continues to be reckoned with, overseeing more than $1tn in client assets for non-US clients, and slightly more in the US. But unlike global brands such as Coke and Pepsi, the Swiss bank keeps re-inventing itself in order to maintain its global leadership ranking.

The bank is no stranger to chassis-shaking transitions. It was the first wealth manager to say, more than 10 years ago, that the old ways of using Switzerland for tax and secrecy purposes and as a base from which to sell structured products were past their sell-by date. It was the first private bank to settle with US authorities for irregular practices, the first to embrace asset management as its raison d’être and the first to champion both hedge funds and ETFs as core products within discretionary portfolios.

Today, that transformation continues apace, with investment management and portfolio construction becoming increasingly formalised and leveraged globally, coupled with asset allocation advice from chief investment officers, backed by technology from Swiss-based platforms. 

Activity has been particularly pronounced in the global family office and ultra high net worth divisions, now built up to being potentially the highest earners of the bank, eclipsing attention previously lavished on the Asia Pacific operations, based out of Hong Kong and Singapore. The Far Eastern jewel, once so far ahead of competitors, while still important, is no longer the major growth engine of business, with a much broader spread of clients targeted geographically, tempted by a wider mix of strategies, including impact investing, philanthropy and private equity.

Joe Stadler, head of the bank’s ultra high net worth business, points to “significant progress in Europe” now starting to rival the bank’s undoubted Asian expertise, with what he calls “big money” consolidating into the hands of a smaller number of specialist firms. “We are the main beneficiary of this in Europe, as many of our previous competitors have wound down or exited the business,” he says.

Where once the bank prided itself in the hard push of structured products to its richest clients, with all advisers required to sell certain quotas, today it is more likely to seek praise for its social conscience and warmer approach to clients, although the ruthless financial streak has not disappeared.

“UBS is unique in its approach to the softer side of the business,” says Sara Ferrari, head of the global family office group at UBS. “We are more attuned to both impact investing and female clients. These are among the key challenges and opportunities we have to embrace to better align ourselves with our client base.”  YB

Best Private Bank in Europe;
Best Private Bank in Switzerland
Pictet Wealth Management

With both headcounts and assets rising, Pictet has launched a major initiative to boost its EU presence, by siting a key operations office in Luxembourg. A new booking centre in London also complements expansion in Germany and Italy. The bank also launched its Pictet Technologies IT company during 2016, employing 48 specialists. 

“For Pictet, Europe has always been for obvious geographical and cultural reasons, a key strategic region,” says Remy Best, managing partner at The Pictet Group. He is particularly proud that this European growth, which has also included adding offices in Paris, Madrid and Barcelona, has been achieved by “organic means only, without recourse to mergers or acquisitions”, which Swiss competitors have been keener to take advantage of.

To accommodate continuing growth, particularly the hiring of senior bankers, Pictet’s London operation has recently relocated to offices twice the size of previous premises in Mayfair, from where it serves clients from Asia, the Middle East, Europe, Russia and Latin America. That said, the home Swiss market remains hugely important for Pictet, with Mr Best believing the country’s strengths, including “a culture of discretion”, are coming into their own “in the unpredictable and unstable environment we live in”.

Ultra high net worth clients are making up an increasingly important part of this focus, with the skills of Pictet Asset Management in servicing central banks, pension schemes and sovereign wealth funds now being used to help families and wealthy private individuals. YB

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 Asia;
Best Private Bank for Innovation
DBS

Singapore’s DBS has finally started looking outwards, opening new offices in both London and Dubai, rather than just contentedly serving as a leading bank in Singapore and neighbouring south-east Asian economies. 

This strategy is no doubt helped by excellent financial performance, with client assets now exceeding $80bn, following recent acquisitions of wealth management units at ANZ and Société Générale, and nearly $12bn of net new money during 2016. DBS says it has grown wealth management by 20 per cent annually over the last six years.

Management says recent success is down to “doubling down” on the basics of integrating banking and wealth management solutions, helping clients build regional relationships and generating much pan-Asian economic research. This effort has been further amplified by strengthening leadership, accelerating the digital agenda and fully realising revenue from the recent integration of the SocGen private banking franchise, say bank bosses. In addition to improving the DBS iWealth platform in Singapore, technology allowing relationship managers to onboard, service and transact for clients via their iPads is being rolled out across southeast Asian region. They have high hopes for the digital footprint in Indonesia and Taiwan in particular, as this is where the recently acquired ANZ brand had strong penetration.

DBS has always been strong in digital innovation. But it feels it has now learned from its mistakes, having been one of the vanguard of the private banking field to explore artificial intelligence and manipulation of big data.

“Having experimented with AI and learnt from various partnerships with fintech companies, our teams are now trained in agile processes, familiar with running customer-centric journeys,” says Su Shan Tan, group head of consumer banking and wealth management at DBS Bank. Relationship managers, she adds, are now focusing on “data as the new currency on which to provide relevant and timely wealth advice and solutions to our customers”.

This focus on data appears key to the DBS strategy, especially where portfolio management is concerned, combining algorithms with details about clients’ goals, risk appetite and available assets to both recommend specific products and rebalance allocations in response to changing market conditions.  YB

Best Private Bank in Latin America;
Best Private Bank in Spain
Santander Private Banking

Santander Private Banking (SPB), part of the Santander Group, has a presence in Europe, Latin America and the US, and provides private banking and wealth management services across a network of 100 dedicated branches.

According to Victor Matarranz, head of the wealth management division, SPB is responding to the challenges faced by the private banking sector at a global level, driven mainly by the changing habits of clients who now have greater access to information and demand different approaches to advisory services. “We have to create a new way of understanding private banking, to be at the service of our customers, becoming much more digital but relying on the knowledge and experience of our bankers, whom our customers value the most,” he explains.

The bank has implemented a number of initiatives to increase digitisation in their communications with clients, with the launch of new apps, digital signature facilities and the digitisation of some administrative tasks, among others. This goes in line with the general direction of Banco Santander, which has recently launched a new strategy called Digifilosofía, aimed at changing customer habits and promoting the use of digital channels.

“At the same time, we are starting to enter the digital advice space and its application to private banking needs and clients. We are working on an automised advisory engine that will provide our customers with monthly investment proposals, replicating the banker’s advice and taking the client’s total portfolio and preferences into account, covering the complete product catalogue,” he explains.

SBP has also dedicated time and resources to expand the range of investment solutions available to their private banking clients, including the launch of an alternative investments department. Using their well-established open architecture model, clients will be able to access the best private equity funds and hedge funds. The bank has also developed a new procedure to easily identify the best exchange traded funds.

Mr Matarranz highlights two main differences between the bank’s businesses in Spain and Latin America. One is the international profile of some of its Latin American clients, the other the different regulatory environments. “In Spain, and Europe in general, we are working towards the new MiFID II directive, which is helping us to accelerate some business model changes, which we see as key for the future of private banking.” PG

Best Private Bank in the Nordics;
Best Private Bank in Finland;
Best Private Bank in Norway
Nordea Private Banking

At Nordea, the largest private bank in the Nordics, assets under management rose by 8 per cent to €86bn ($102bn) last year, while income growth was also solid, as efforts to become a more “agile” organisation seemingly paid off. 

The private bank established a new platform, called The Ocean, aimed at developing and implementing business development initiatives by introducing “agile teams”, while leveraging the Nordea Group’s competences, explains Thorben Sander, head of Nordea Private Banking.

These teams operate as “speedboats” organised in “fleets” on strategic themes and all of them must contribute to building and sustaining client satisfaction as well as employee engagement, he says.

The bank rolled out a Next Generation programme in 2016 in all its markets, and has also transformed its wealth advisory approach to provide a one-stop shop, including legal advice and inheritance planning, as well as specialised support to entrepreneurs.

“We are confident that this approach helps us unlock the full potential of our client’s wealth,” says Mr Sander. 

Last year, the bank launched the Nordea Start-up Accelerator, whose objective is to create business development hubs and enhance collaboration between the group and start-ups. This is achieved by matching fintechs with dedicated mentors in Nordea. 

“One of our success stories, Feelingstream, uses AI to automatically analyse text, and opens up new opportunities to improve our customer service,” states Mr Sander.

When it comes to technological innovation, the introduction of digital documents and digital signatures, launched to speed up client processes, has been particularly welcome. Also, advisers have been equipped with a new interactive digital presentation tool to enhance their meetings. In addition, the bank expanded its digital communication through webinars and podcasts.

These solutions followed the launch of e-Branches, offering the same services as physical branches, including video chats with advisers, but with more flexible opening hours, including evenings and weekends. 

Going forward, the bank sees “considerable potential” in robotic process automation and is in the process of developing and implementing new solutions, while the Robotics Centre of Excellence, established in February this year, supports business units.

“The private banking industry is undergoing significant changes and challenges, ranging from increasing regulatory pressures and digitalisation to changing client preferences,” says Mr Sander. 

“In this environment, modern customised solutions and the ability to cater to vastly different client preferences will play a fundamental role.” ET