PWM/The Banker Private Banking Awards, 2012: Europe

Best Private Bank in Europe
Best Private Bank in Switzerland
Best Brand in Private Banking
Winner: Pictet & Cie

Secretive wealth manager Pictet & Cie, 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. Total client assets have been slightly dented from Ä299bn in 2011 to Ä297bn in mid-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 global financial crisis, even luring funds from rival Swiss banks, 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 huge 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 the 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 at Pictet see things slightly differently. They believe that the bank – along with other Swiss banks – can continue to profit from a multi-lingual hub of expertise at the centre of Europe, complemented 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.

Best Private Bank in Turkey
Winner: 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 asset management group 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 and exchange-traded commodities. 

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

Borrowing rates are much lower than in the past, with 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 luxury real estate specialist 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 to your clients that they can get more from private banking than retail banking,” says Mr Galatali. “We have achieved significant success on this front. Service quality, investment performance and a wider range of products speak for themselves.”

The bank is planning the opening of two more branches in addition to the existing nine in Turkey. More recently, growth opportunities have been found in the Gulf Co-operation Council region. “As Turkey becomes more and more stable with attractive yields and investment choice, investors in Gulf countries show a higher interest in [the country], both in real estate or portfolio management services,” says Mr Galatali. Akbank Private Banking was the first private bank from Turkey to set up an office in Dubai. “We are expecting a significant growth from our Dubai centre,” he adds.

Best Private Bank in Belgium
Winner: ING Private Banking

“One of our strengthsis that we operate as a real private bank within a universal bank,” says Philippe Wallez, general manager at ING Private Banking, winner of the Best Private Bank in Belgium award. “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, for example, ING Private Banking 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 past year, ING Private Banking has also added a wealth analysis and planning unit, which includes services such as merger and acquisition 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% of products recommended are ING’s. “This has been an important reputational builder for us,” adds Mr Wallez.

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

“Our style is simple. We are not a typical red carpet-and-champagne bank,” says 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.” 

Best Private Bank in France
Best Private Bank for Philanthropy services
Winner: BNP Paribas Wealth Management

Whereas breaking out of the 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 its 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 country, 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, while giving them access to a certain lifestyle,” says 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 merger and acquisition 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. 

Best Private Bank in Germany
Winner: Berenberg Bank

Berenberg, which is very much seen as an independentand unconflicted bank, attracted Ä1.33bn of new assets under management in 2011. 

The 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 to 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 six and a half years on average.

“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. 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.”

Best Private Bank in Italy
Winner: 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 is managed by the group’s Generali Fund Management. It 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 hold more than Ä5bn 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, at no extra cost. 

“Our Luxembourg Sicav BG Selection was an important catalyst, both for its innovative structure and for the significant asset inflows boost,” says Piermario Motta, CEO of Banca Generali. 

The bank’s dedicated advisory department, of 12 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’, and the comprehensive range of investment funds, insurance solutions, asset management and banking services these advisers provide has contributed to the significant growth of the bank’s assets under management, which have today reached almost Ä25bn. The bank enjoyed net inflows of Ä1.26bn last year and the positive trend continues with net new money of Ä1bn in the first half of 2012.

As to 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, according to 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 Ä3600bn in assets held by retail banks and post offices.” Current issues faced by commercial institutions are 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,” says Mr Motta. 

Best Private Bank in Luxembourg
Winner: 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.

Société Générale’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.

And being at the heart of Europe, clients in the country, with an eye on local opportunities, have particularly 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% performance gain in US dollars over three months. Also, Société Générale clients made money on foreign exchanges during the summer due to a more positive view of the euro against the US dollar, compared to competitor banks’ negativity.

Best Private Bank in the Nordics
Winner: SEB

Winning Best Private Bank in the Nordicsfor the third year in a row, Stockholm-headquartered SEB is owned by Sweden’s powerful Wallenberg family and has SKr266bn ($40.3bn) 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 at SEB. “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 to always have an up-to-date offer that is relevant to our clients.”

The bank has seen strong demand from clients for low volatility 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 is 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 also been looking to develop its in-house capacity in real investments, in response to client demand for assets that can 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. 

Best Private Bank in Spain
Winner: BBVA Banca Privada

One aspect of BBVAthat differentiates it from its peers is its 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, e-mail, 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 solutions is what mainly differentiates us from our competitors.”

The bank is setting up state-of-the-art branches to test new ways of interacting with customers. The overarching aim is “to make life easier for clients, offering them global solutions, adapting to their lifestyles, and, [most importantly], being 100% available and transparent to them, allowing them choose the way in which 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 is its four-phase centrally structured proprietary portfolio management process, which allows it to provide clients with the best-suited tailor-made solutions.

Best Private Bank in the UK
Winner: 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 clearer regional/client group focus. It also responded to legacy compliance challenges and reorganised its products and services 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, enabling relationship managers to take a single view of clients’ portfolio, 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 (RDR) directive coming into effect on January 1, 2013 – as clients can view all their fees in one place and clearly distinguish the value added by Coutts. 

The bank raised the key entry criteria for clients from £500,000 ($803,000) 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 high-net-worth portfolios (with more than £1m) increased from £31bn to £39bn in the year to the end of 2011, while Coutts Private Office, which caters to ultra-high-net-worth individuals with more than £10m, saw total client assets increase by 26% 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. This clearly differentiates us in the marketplace, placing Coutts in a strong position to understand the complex issues facing our clients, and in a winning position for the post-RDR world.”

Last year, newly appointed 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, focusing 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.