PWM/The Banker Private Banking Awards 2013

As PWM and The Banker’s Global Private Banking Awards celebrate their fifth year, and the number of entrants continues to grow – this year we received submissions from 103 banks – several new patterns are emerging or being amplified.

More than 22% of participating private banks in 2013 are new entrants, many of them onshore wealth managers specialising in growing domestic markets such as Mexico, the Czech Republic, South Africa and Indonesia.

All of our nine judges identified a major trend of regional institutions in the ascendancy, building strong private banking imprints not just in their home country, but in neighbouring regions too. This means leveraging existing retail branch infrastructure for higher wealth segments.

These rising ‘onshore giants’ include ABN Amro, triumphing on home territory in the Netherlands, but also recognised for private banking efforts in France and Germany; BNP Paribas, best in both Belgium and France, but also notable for socially responsible investing and philanthropy services; and Hungary’s OTP, all-conquering not just on home soil, but also in the broader central and eastern Europe region. US and global banks, on the other hand, once keen to sow seeds far and wide, appear to be retrenching.

“This year marks a watershed in the evolution of wealth management, with some big institutions rebalancing their commitment to the segment,” says Seb Dovey, whose Scorpio consultancy screens quantitative data for the awards. He particularly draws attention to restructures at Bank of America Merrill Lynch and a “reduction of market commitments by HSBC and Credit Suisse”.

But it is the ascendancy of the domestic players that most captures his attention. “There is clear evidence of the rising number of domestic operators in countless markets vying for market share [that are] on a fast track to growth,” says Mr Dovey. “Typically, they are starting from a stronger retail franchise base, but they are capitalising on this much better than they have in the past.”

The deep international footprint that US groups had for decades in private banking is clearly fading fast. “Most of these groups have disengaged from Switzerland and Europe and focused instead on their retail and commercial banking activities,” says Shelby du Pasquier, co-head of the banking and finance division at Geneva law firm Lenz & Staehelin. 

Following the restructure of the US banking sector, with the notable exceptions of JPMorgan and Citi, most groups active in the area have been sold or taken over, with the sale of Merrill Lynch’s non-US wealth management activities to Julius Baer the latest manifestation of this trend. But do not expect US players to die a sudden death as wealth managers. “They are still in the restructuring phase, so I would not rule them out at all,” says Ray Soudah, founder of Swiss merger and acquisition consultancy MilleniumAssociates.

Large banks everywhere increasingly regard their private banking arms as strategically important, according to Amin Rajan, chief executive of the Create-Research consultancy. “But that emphasis is greater in Europe than it is in the US. As European banks have scaled back their investment banking business, their wealth management arms have acquired greater significance.”

The prime beneficiary of these changes is a resurgent UBS, where private banking is once again becoming the core of the business, helped by a fast-improving brand name, following extreme post-crisis difficulties, combined with a scale-back in capital markets business. 

Even though UBS has scooped four awards in 2013, including the Best Global Private Bank and Best Asian Private Bank categories, our judges believe there is much more to come from the Zurich giant, which could sweep the board, once it makes real efforts towards restructuring instead of ‘baby steps’. The same is also true of key competitor Credit Suisse.

Other Swiss banks will suffer unless they buy into this new era of industry practices, now that the protectionist advantages have come to an end. “A new model is emerging that can still benefit from the safety and skills available in Switzerland,” says Mr Soudah. 

Those banks already devoted to improving their wealth management service and re-inventing themselves with the times – award winners Pictet and Julius Baer being perfect examples – will continue to prosper, believes the panel.

But ignorance of client needs is still widespread across private banking, according to Scorpio’s Mr Dovey, who conducts regular research of customer perceptions. “What remains an issue of concern is the widespread lack of sustained innovation and respect for research and development in the client experience among the wealth management industry,” he says. “The submissions continue to show that banks are just scratching the surface of customer engagement.”

That said, the improvement in submissions in onshore markets, particularly in the developing countries of Latin America, Asia and eastern Europe, has been marked, with a real battle for honours now taking place in Russia, China, Thailand, Malaysia and Mexico. Simeon Fowler, a partner at recruitment consultancy Fowler Fox & Co, is particularly keen to recruit bankers in both China and Indonesia and expects onshore standards to continue to improve as the old offshore private banking model dies out.

“As more banks get their licences in China, we will see many offshore, skilled, senior private bankers returning to China and this will help to grow and develop the current talent pool,” he says.

Asian players in markets such as Singapore and Malaysia are also expected to continue gaining in expertise and offer their services across borders in highly populated areas, with the likes of DBS, Standard Chartered and Malaysia’s CIMB and Maybank potentially set to benefit. “Asian regional players are gaining more confidence in their ability to go head to head with the global banking brands,” says Justin Ong, asset management leader at PricewaterhouseCoopers in Singapore. “Asian banks have the advantage of local market knowledge and reach, and their brands remain strong pull-points within their own countries and nearby regional markets.” 

Key facts

• Over the past five years, the number of institutions that have entered the awards has grown. This year, more than 100 banks (103) applied from North America, Latin America, Europe, the Middle East, Asia-Pacific and Africa.
• More than 22% of the private banks participating in the awards are new entrants. These include some major institutions in key regions and countries.
• The number of awards categories available to private banks has increased by 33%, to 53 categories from 40 last year.
• There are 16 new awards categories. These are best domestic private banks in Mexico, Austria, the Netherlands, Czech Republic, Slovakia, Denmark, Sweden, Andorra, Hungary, Ukraine, New Zealand, South Africa, Mauritius and Indonesia, and the best private banks for Islamic services and for growth strategy (the award for the latter category had previously been given in 2010).
• Private banks that have not won an award in past years should be encouraged by the fact that of the 41 institutions that have been crowned best private banks in any specific category, more than 40% (17) have won an award for the first time this year.
• These new winners are:  ABN Amro MeesPierson, AfrAsia Bank, Banchile Wealth Management, Banorte-IXE Banca Privada, Bank Mandiri Wealth Management, Banque SYZ & Co, BNZ Private Bank, BTG Pactual, Crèdit Andorrà, CSOB Private Banking, Danske Bank, Investec, Maybank Private Bank, Santander Private Banking, Taipei Fubon Bank, UkrSibbank and UniCredit Private Banking.
• In 2013, about 5% of banks have re-entered the awards after a break last year.
• This year, each private bank was asked to apply for a maximum of five categories. On average, each institution has applied for 4.8 categories, for a total of more than 500 category-specific entries.

The winners

• Best Global Private Bank
• Best Private Bank in Asia
• Best Global Brand in Private Banking
• Best Performing Private Bank

Winner: UBS Wealth Management

• Best Private Bank in Europe
• Best Private Bank in Switzerland

Winner: Pictet

• Best Private Bank in Central and Eastern Europe
• Best Private Bank in Hungary 

Winner: OTP Private Banking

• Best Private Bank in the Middle East
• Best Private Bank in India

Winner: Standard Chartered Private Bank

• Best Private Bank in the US
• Best Private Bank for Innovation

Winner: Northern Trust

• Best Private Bank in Latin America

Winner: Santander Private Banking

• Best Private Bank in Brazil

Winner: BTG Pactual

• Best Private Bank in China

Winner: China Merchants Bank

• Best Private Bank in Russia

Winner: Credit Suisse

• Best Private Bank in Hong Kong

Winner: HSBC Private Bank

• Best Private Bank in Singapore

Winner: DBS Bank

• Best Private Bank in Malaysia

Winner: CIMB Private Banking

• Best Private Bank in Indonesia

Winner: Bank Mandiri Wealth Management

• Best Private Bank in South Korea

Winner: Hana Bank

• Best Private Bank in Taiwan

Winner: Taipei Fubon Bank

• Best Private Bank in Thailand

Winner: Kasikornbank Private Banking

• Best Private Bank in Turkey

Winner: Garanti Masters Private Banking

• Best Private Bank in the United Arab Emirates

Winner: National Bank of Abu Dhabi

• Best Private Bank in Austria

Winner: Erste Private Banking

• Best Private Bank in Belgium
• Best Private Bank in France
• Best Private Bank for Socially Responsible Investing
• Best Private Bank for Philanthropy Services

Winner: BNP Paribas Wealth Management

• Best Private Bank in Germany

Winner: Berenberg 

• Best Private Bank in Italy

Winner: UniCredit Private Banking

• Best Private Bank in Luxembourg

Winner: ING Private Banking

• Best Private Bank in Sweden
• Best Private Bank in the Nordics

Winner: SEB Private Banking

• Best Private Bank in the Netherlands

Winner: ABN Amro MeesPierson

• Best Private Bank in Denmark

Winner: Danske Bank

• Best Private Bank in Spain

Winner: BBVA Banca Privada

• Best Private Bank in Andorra

Winner: Crèdit Andorrà

• Best Private Bank in the UK

Winner: Coutts

• Best Private Bank in Ukraine

Winner: UkrSibbank BNP Paribas Group

• Best Private Bank in the Czech Republic
• Best Private Bank in Slovakia

Winner: CSOB Private Banking

• Best Private Bank in Canada

Winner: RBC Wealth Management

• Best Private Bank in Mexico

Winner: Banorte-Ixe Banca Privada

• Best Private Bank in Chile

Winner: Banchile Wealth Management

• Best Private Bank in New Zealand

Winner: BNZ Private Bank

• Best Private Bank in South Africa

Winner: Investec

• Best Private Bank in Mauritius

Winner: AfrAsia Bank

• Best Private Bank for Customer Service

Winner: Citi Private Bank

• Best Private Bank for Islamic Services

Winner: Maybank Private Banking

• Best Private Bank for Growth Strategy

Winner: Bank Julius Baer

• Judges’ Award for Industry Leader

Winner: Eric Syz, co-founder and managing partner, Banque Syz & Co