PWM/The Banker Private Banking Awards 2013: Western Europe

Best Private Bank in Europe and Best Private Bank in Switzerland: Pictet

Pictet has been one of the fastest growing banks in the private client world, increasing managed assets by 23% to $322bn in 2012, according to figures from Scorpio Partnership. Partners at the Geneva bank, founded in 1805, feel they have caught the popular mood by recently restructuring to shed the old-fashioned unlimited liability partnership structure and concentrating increasingly on portfolio management expertise and international expansion capabilities. Although the bank has been promoting some innovative thematic investments, its portfolio strategists insist on a conservative philosophy, protecting client assets and beating inflation, rather than chasing returns.

But there is a belief within the bank that Switzerland is no longer a big enough market to sustain banks such as Pictet, rivals Lombard Odier and UBP and the larger universal banks such as UBS and Credit Suisse. Pictet already has a presence in 15 countries. The bank claims to have added $13bn in net new money during 2012. Inflows from new entrepreneurs, many of them enriched by social media, are increasingly drawn in by the bank’s strong brand, says Heinrich Adami, head of the London office for the Swiss wealth manager.

These clients lodge some of their assets with investment banking-led US institutions, but are also keeping faith with traditional Swiss private banks, he says. As well as portfolio management, the bank is increasingly active in family governance and succession planning, helping families build solid governance structure to help manage change.

While some bank-watchers in Geneva claim that unlimited liability partnerships were only rethought because partners were becoming increasingly concerned about potential liabilities to US tax authorities, the Pictet partners see the move as part of a longer term trend, rather than reacting to specific current circumstances. It will also mean a much more transparent set of reporting requirements, with the bank now able to bat away accusations of being a secrecy-shrouded operator.

Six years ago, the bank moved from its picturesque headquarters on the banks of Lake Geneva to more functional premises on the busy Route des Acacias. This was one of the first stages of demonstrating to the market a new mentality, where asset management could co-operate much more closely with and assert greater influence on private banking, with secrecy-led services now belonging to the past.

Best Private Bank in Turkey: Garanti Masters Private Banking

Garanti Masters Private Banking is the first private bank to offer a wealth management approach similar to that of its western European peers in Turkey, a country with a population of more than 75 million and an average age of just over 30, which is a source of great potential for the business. 

One of Garanti Masters Private Banking’s strengths is product innovation. In Turkey, sophisticated financial tools are in their early phases, but although most client assets are held as deposits, a small portion of their portfolio is in advanced alternatives, including a wide range of structured products. 

Other examples of its pioneering products are its capital guaranteed funds, which, while guaranteeing the principal protection, provide clients with the opportunity to gain the additional return of an index, such as its Innovative Companies Fund based on the Citi Index on Innovation VT 11% Net TR USD Index, which reflects the performance of 15 global companies in the technology, consumer and communication sectors. Some 813 clients have taken advantage of this product, which has a maturity of one year and ended the investment term with a return of 18%. 

“We have a product development team solely dedicated to consulting with the sales team to take into consideration our clients’ expectations,” says Onur Genc, the executive vice-president for retail and private banking at Garanti Masters Private Banking. 

“They closely follow the markets and design products based on expectations with the highest return potential. Besides offering a wide range of structured products, the team also designs investment solutions for our individual clients. Our product offering pioneered the investment environment in Turkey. To attract new customers we offered our clients many timely products. Our recommendations process meticulously adapted to fluctuating market conditions.”

“We do have the image of a 200-year-old private bank rooted in Switzerland,” says Mr Adami. “But people who know us well also know we stand for something innovative, creative, bespoke and flexible.” Recent innovations include the introduction of e-banking tool Pictet Connect. 

Chief investment officer Yves Bonzon, who does the rounds of Pictet’s larger private clients across Europe to share investment themes, says clients have been positive so far about the new direction their bank has chosen, and even those with sentimental leanings to the old-style bank have not complained.

“We have been very impressed so far by the favourable client reception,” he says. “The real test will be in five to 10 years’ time, when they will see if we can deliver our vision.”

Best Private Bank in Austria: Erste Private Banking

Established in 1993, Austria’s Erste Private Banking leverages on its parent company’s long banking history. Since 2001, the institution has expanded its private banking activities in an additional five central and eastern European (CEE) countries: Croatia, the Czech Republic, Hungary, Romania and Slovakia. 

“Although our CEE private banking units are relatively ‘young’, Erste Bank’s 200 year-long history has helped us attract new clients,” says Wolfgang Traindl, head of Austrian private banking at Erste. CEE clients seeking to invest offshore can also benefit from special services offered by the private bank in Austria.

In 2012, Erste Private Banking increased its assets under management by 17% to €5.5bn, implemented discretionary portfolio mandates in all CEE countries with the aim this year to centralise production, and streamlined product offerings. “This group product approach will not only have a significant impact on production costs, but should also increase the quality of our products,” says Mr Traindl. 

Today, discretionary portfolio management (DPM) represents about 20% of the total assets under management, which the bank aims to increase to 35% in the long term, with the remaining 65% being in the advisory business.

 “A structured DPM process and investment disciplines are key ingredients for investment success,” says Mr Traindl. “Clients willing to delegate are best guided to sign up for discretionary mandates: portfolios are given seamless attention and bankers’ capacity is freed up.”

The private bank is developing a new pricing strategy, aiming to link more tightly the prices charged to the service provided.

New clients are acquired through referrals as well as through close co-operation with the retail network and corporate sales units. The highest growth in terms of volumes is expected in the ultra-high-net-worth segment and above, although the high-net-worth segment will provide the highest growth in terms of client numbers. 

When recruiting staff, Erste Private Banking’s focus is on international education and experience, believing that experience in private banking is as important as business etiquette and good language skills to serve international clients and maintain a service-oriented attitude. 

Erste offers a wide range of socially responsible investment products and sustainable funds and, through the Erste Foundation, established in 2003, it also offers philanthropic services.

Best Private Bank in Belgium and Best Private Bank in France: BNP Paribas Wealth Management

BNP Paribas Wealth Managementhas long been building its proposition, taking advantage of a strong bank branch network across its native France, but its efforts are finally being recognised both at home and abroad with a string of awards in 2013.

The growth has been accelerated by a series of key mergers to boost assets held globally to €265bn. But 2012 also saw a phenomenal €7.5bn net new money, more than double the previous year.

One key innovation has been the development of the ‘key client’ group, for those with more than €25m to invest, particularly focusing on capturing family office business growth from Europe and the Middle East. This involves a closer collaboration with the bank’s corporate and investment banking division and an increased focus on female clients and entrepreneurs. Indeed in France, where BNP Paribas boasts client assets of €73bn, making it the leading wealth management institution, the bank has begun to concentrate resources into its 61 so-called ‘maisons des entrepreneurs’, its dedicated set up for small businesses, and part of a broader range of 230 private banking centres across France. French clients are serviced by 1200 private bankers, of which 370 are dedicated to the entrepreneurial segment.

Following the integration of Fortis Bank Belgium, BNP Paribas also has managed to secure a leading position in the Belgian wealth management market, where clients benefit from more than 900 private bankers and investment experts. But the old Fortis system has been somewhat streamlined, so that each private client now just has one key banker servicing them, rather than two under the old model. Once the delivery mechanism was in place, the French bank then began to introduce an enhanced range of products to Belgian private clients, including private equity, real estate, credit and even vineyards.

Having acquired the BNL franchise in Italy back in 2006, BNP Paribas was able to learn from this previous experience and apply the lessons to the Belgian market. Rather than totally eradicate the Fortis brand, it decided to combine the two and offer clients services under the BNP Paribas Fortis wealth banner. “We need to be close to clients and show understanding, rather than just bring them a big brand which is not well known everywhere,” says wealth management co-head Sofia Merlo. 

Through the BNP Paribas model, private bankers can leverage on the IT systems designed for its retail network. BNP has also been one of the few banks with a serious philanthropy offering, setting up a specialist advisory service in 2008, including the Fondation de l’Orangerie, which offers clients access to pre-selected charitable projects.

Best Private Bank in Germany: Berenberg 

Berenberg, which attracted €1bn net new money in 2012, bringing assets under management to €28.2bn, prides itself on its independence and its approach of providing advice rather than products to clients. The Hamburg-headquartered bank now sees much of this growth coming from the branch offices, located in seven German cities, many of which were set up within the past 10 years. Berenberg also has a strong presence in London and Zurich.

“More than ever, it is essential for banks to align their business models with the needs of clients,” says Tindaro Siragusano, head of private banking and asset management at Berenberg. “Our approach allows us to develop close attentive working relationships that are essential for our clients’ long-term success.”

Each of Berenberg’s 140-plus relationship managers look after just 50 to 55 clients on average, while the bank strives to make its reporting channels as flexible and customisable as possible. Central to this is a shift towards a digital approach, communicating via its website and by email, and through the development of mobile apps, although the bank recognises that a diverse customer base means more traditional forms of communication still have an important role to play – the ratio is about 60% digital to 40% non-digital.

“Berenberg’s specialist teams have the experience and skills to meet the financial needs of a diverse range of clients,” says Mr Siragusano. “We help families preserve and grow wealth for future generations using appropriate investment strategies, and enable businesses and organisations to solve complex financial challenges.”

The bank reports that investors are searching for alternatives that can diversify portfolio returns away from the short-term volatility of equity and bond markets, and recommends physical assets such as real estate, forestry, farmland and fine art as suitable investments.

Best Private Bank in Italy: UniCredit Private Banking

UniCredit Private Banking (UPB), an arm of Italy’s largest bank, has recorded continual revenue growth and worked hard to evolve its service model, product innovation and staff management. During 2012, it streamlined its organisation and simplified the network structure, reducing the number of managerial levels and increasing its integration with its commercial bank, which as well as reducing costs is expected to produce wider benefits, such as a more effective service model. 

The bank has also led in product innovation, taking the view that it is increasingly critical to find innovative financial solutions for customers’ needs, because as yet the public do not quite trust the banking community. It was the first European private bank to develop a flat-fee account and last year it launched UniCredit Green, a segregated management account invested in iShares exchange-traded funds with partial capital protection.

“With a 2013 cost-to-income ratio below 50%, UPB has demonstrated its ability to deliver best-in-class advisory services for all the needs of its customers – with particular focus on entrepreneurs and family business owners – in a very efficient manner, leveraging on more than 800 private bankers and 100 specialists,” says Dario Prunotto, UniCredit’s head of private banking. 

“UPB works with a small selection of top global investment management houses to provide its clients with a range of best-in-class financial products covering all asset classes. UniCredit’s asset management preferred partners undergo a robust, integrated and systematic selection and monitoring process across Europe via a process certified by US adviser Mercer. This year, UPB’s bankers can use a specific app, called i-Library, on their iPads to build multimedia presentations.” 

Best Private Bank in Luxembourg: ING Private Banking

Having a mainly entrepreneurial, international client baserepresents both an opportunity and challenge for ING’s private banking business in Luxembourg. 

“The challenge for Luxembourg, and for our private bank, is to transform and to upgrade the client base, and to diversify it over more extensive markets than the traditional ones of today,” says Dirk Adriaenssens, the general manager for retail and private banking at ING in Luxembourg. 

The strategy should be implemented “by capitalising on the country’s structuring capacity and by offering state-of-the-art solutions to more complex and internationally oriented wealth,” he adds. 

ING Private Banking Luxembourg has indeed been working on expanding its activities beyond traditional borders, reaching into new markets such as Russia, Romania, Ukraine and Turkey. 

Also, the private bank has developed specific products and services to address clients’ cross-border needs, for example offering mortgage-based financing for secondary residences in the Côte d’Azur.

Part of a fully integrated universal bank, ING Private Banking Luxembourg offers a variety of services, including portfolio management, fund management, estate planning, yacht and property financing and insurance solutions. “A key differentiating factor is that our people are very well trained, team players and customer focused,” says Mr Adriaenssens.

“We have a tradition of being very competent in estate planning since our people have outstanding academic track records and more than enough emotional intelligence to understand the real needs of our clients. On top of that we have an outstanding network of external professionals.”

ING Luxembourg is especially active in creating and developing synergies within the group, with corporate banking in particular, but also with other ING entities in Europe. It also caters to specific segments of clients, such as ultra-high-net-worth individuals and sports stars.

Believing in the value of combining business and pleasure, ING Private Banking in Luxembourg (and Belgium) sponsors numerous sporting events, such as golf tournaments, sailing or tennis competitions, classic car rallies and art exhibitions. 

“The sporting events we choose are very much related to our values, such as team play, passion for perfection and fair play,” says Mr Adriaenssens.

At a global level, ING Private Banking managed about €44bn at the end of 2012, an increase of 12% year on year.

Best Private Bank in Sweden and Best Private Bank in the Nordics: SEB Private Banking

Since SEB’s founding by Sweden’s Wallenberg family in 1856,the bank has offered financial services to high-net-worth individuals and its private banking business has always been a priority.

SEB focuses on following Nordic clients as they do business outside the region and is present in 11 countries, including Luxembourg, Switzerland, Singapore and the UK. One thing that differentiates SEB from its peers is its international reach combined with native culture and language for Scandinavians abroad. 

“SEB Private Banking has a width and depth in its offering that is hard for any competitor catering to Nordic clients to match,” says Martin Gärtner, global head of private banking for SEB. “Aside from financial advice we offer, for example, a state-of-the-art ‘internal law firm’ with family and tax law, a wealth structuring unit, foundation services and easy access to lending and financing.”

In response to changes in client behaviour, moving away from equities, SEB has developed a variety of portfolio strategies and uses combinations of different manager styles as well as different asset classes to help position clients on different points on the efficient frontier based on their risk appetite. 

The bank tends to avoid traditional ‘low risk’ markets and challenges the traditional norm of risk, favouring an international mindset and assets with real potential to create wealth. It has also used the past 12 months to explore financial innovations such as structured products in private equity, foreign exchange and infrastructure as a way to gain interesting market exposure not easily found through conventional funds.

“Our recent successes include a record high client satisfaction score, a large inflow of new clients, good employee retention and lots of spontaneous applications from the staff of competitors not only in Sweden but also, for example, London,” says Mr Gärtner.

Best Private Bank in the Netherlands: ABN Amro MeesPierson

Judged best private bank in the Netherlands,ABN Amro Private Banking boosted client assets from $187bn to almost $210bn during 2012, with impressive net new money figures of $4bn – up by $3bn on 2011.

This is no small-scale operation, employing close to 1000 relationship managers to service almost 100,000 private clients globally and including the Neuflize, Bethmann and MeesPierson franchises, all dating back several centuries.

There is a new-found confidence flowing through the bank, with a palpable feeling of imminent re-emergence as a Europe-wide wealth management player, poised to take over from fading franchises. Such a situation seemed a long way off during the crisis years, when a prolonged purchase and break-up process instigated by a consortium comprising RBS, Santander and Fortis eventually contributed to the latter’s demise.

The bank’s formula has relied on combining local brands with wider group solidity, segmentation around key client groups and innovative investment ideas around energy, commodities and transportation.

Investment policy has been led by strategic-thinking chief investment officer Didier Duret, who is currently encouraging private clients to invest in manufacturing giants, particularly in nearby Germany, and is never afraid of making bold, contrarian asset allocation calls. Group strategy is handled by CEO Jeroen Rijpkema, who while emphasising expansion in Asia, has also been defining and implementing an onshore strategy for European growth. This has concentrated on the unfashionable asset homes of the Netherlands, Germany and France.

The successful plan has involved booking assets from these onshore markets, well ahead of the Swiss banks, which claim they want to implement this type of business model, but have been stuck in limbo, redefining their offers. “Many Swiss banks are fighting to get access to the type of markets which we have,” Mr Rijpkema once said.

Best Private Bank in Denmark: Danske Bank

Danske Bank has been busy. In 2011, it launched the second generation of its discretionary managed accounts for more sophisticated customers, offering customisation and a wider variety of products such as alternative assets, equity derivatives and tax-optimisation strategies. These accounts are conservatively managed, creating an asymmetric risk-adjusted return profile. 

Danske is particularly proud of its customer reporting, which provides an overview of the customer’s assets and liabilities across tax regimes and wrappers, with the option to include holdings with other banks, cost overviews and tax reporting. The reports are available online and on paper, and include asset allocation, time-weighted returns and benchmarking. 

The bank’s in-house-developed Wealth Planner tool is used to give clients a scenario analysis of their portfolios after tax and encompasses the risks on both tangible assets, and intangible assets such as human capital. It has a specialised simulation tool that extracts data across all customer custody accounts and tax wrappers, and is capable of ‘looking through’ mutual funds, producing an overview of exposures at sector and regional level.

For self-directed customers, the bank has developed online packages with access to real-time prices from major stock exchanges, plus trade execution and research. 

The private bank is now trying to internationalise its operating model, and targets have been put in place to restructure its distribution to increase efficiency.

“This shows we are moving in the right direction,” says Marlene Nørgaard, head of private banking for Denmark at Danske. “Our advisors’ competencies combined with a wide team of in-house experts and excellent tools, such as the Wealth Planner, enable us to give our customers a unique overview of their finances and an understanding of the consequences their choices may have in future. We embrace the fact that customers want tailored solutions that meet their needs.”

Best Private Bank in Spain: BBVA Banca Privada

Winning the award for best private bank in Spainfor the fourth year in a row, BBVA Banca Privada gained 13,072 customers in 2012, while net new money grew by €1.5bn to reach €39.4bn. 

“BBVA Banca Privada is currently in an excellent position to grow in Spain,” says José Garcerán, who is responsible for private banking in Spain and Portugal. “Our solvency, the strength of our brand as well as our consistent model and our clear strategy give us a competitive advantage that will help us gain market share.”

Interacting with clients is central to the bank’s business model. BBVA targets both the ultra-high-net-worth population and the upper-affluent segment through a combination of dedicated private banking centres and private bankers in retail branches, allowing customers to choose where they want to receive services.

“Our strategy to arrive at our goals is based on proximity to our customers and on providing them with customised solutions that best fit their needs,” says Mr Garcerán, adding that the digital world is of increasing importance to the bank. Last year saw the launch of a new website that allows all types of customisable reports, the development of the online family wealth community exclusively for private banking clients, and allowing customers to access portfolio information via their mobile phones. 

BBVA’s high-net-worth advisers are also encouraged to spend half their time outside the office, and have been provided with iPads to enable them to do their jobs with greater levels of mobility.

BBVA is responding to the current environment of historically low interest rates by offering products that offer higher risk-return ratios. These include a range of structured deposits that can provide returns independent of underlying assets, and developing a guaranteed product that allows allocations to equities without risking all of the invested assets.

Best Private Bank in Andorra: Crèdit Andorrà

Over the past few years,Crèdit Andorrà has gradually built a significant international presence and today operates in 10 countries in Europe and America, comprising Andorra, Luxembourg, Mexico, Panama, Paraguay, Peru, Spain, Switzerland, Uruguay and the US.

“Our international expansion has been built on our long, successful history in private banking in Andorra,” says Josep Peralba, CEO at Crèdit Andorrà. He explains that the firm’s growth strategy is based on the criteria of due diligence, prudence and sustainability. 

The Andorran bank, which also offers asset management and insurance services, saw its private banking assets grow by 12% to €11.3bn last year. 

Banco Alcalá in Spain and Banque de Patrimoines Privés in Luxembourg, both acquired by Crèdit Andorrà in 2011, contributed remarkably to the asset growth of the European private banking business, which managed more than €2.6bn in total assets at the end of 2012. 

In the US, the acquisition of Miami-based Beta Capital Management at the end of 2011 made the bank the first Andorran financial institution to break into the US market as a licensed broker/dealer. Last year, the firm also consolidated and grew its presence in Latin America, acquiring firms in Peru and Paraguay and strengthening its position in Mexico.

“The group’s international platform provides clients with access to international markets and therefore to the products that best suit their needs,” says Mr Peralba. “Crèdit Andorrà offers a huge range of investment options, multi-booking, providing flexibility in today’s complex and changing markets.” 

In its home country, where the private bank enjoys a 35% market share, last year Crèdit Andorrà created a specialist unit to cater to large customers, and centralised private banking services. The international office was strengthened with the creation of dedicated business units focused on opening new private banking markets in Russia, eastern Europe and Africa.

The firm prides itself on operating on an open-architecture basis and providing a “boutique service approach to wealth management, offering tailor-made solutions and highly personalised services,” according to Mr Peralba.

In addition to enhancing its product offering through the launch of new funds, in 2012 Crèdit Andorrà signed a strategic consultancy agreement with Gamco, a US firm known for its expertise in value-oriented equity investment. The Andorran institution also receives advice from Spanish investment management company Bestinver on euro-based equity investments.

Best Private Bank in the UK: Coutts

The UK’s Retail Distribution Review– a major reform of the regulation of retail investment advice in the country – has been high on Coutts’ agenda over the past year. The wealth manager launched its RDR proposition in November, a month before the wider industry, and says feedback has been positive. 

“We launched our RDR-compliant proposition early, embracing the new regulation as we saw that as a bank-owned, advice-led business, Coutts had the potential to flourish in the new regulatory landscape,” says Michael Morley, the chief executive of Coutts. “From the restructuring of the business, through to the creation of our wealth management advice service and extensive training programmes devised to empower our advisers to deliver this proposition, we have worked to ensure that the principles of RDR are embedded in Coutts’ culture and all facets of our relationship management processes.

“The delivery of our new proposition has resulted in more intelligent relationships with clients, providing us with a clearer understanding of their needs, their attitudes to risk and their objectives.” 

Last year, Coutts’ largest purchase was technology platform Avaloq. The platform gives advisers a bird’s eye view of clients’ consolidated finances, looking at both sides on the balance sheet.

Another significant development over the past year has been Coutts’ decision to establish Jersey as the focus of its expanding international trust business. Announced in June, the changes reinforced the bank’s confidence in the UK’s dependencies. 

The wealth manager remains committed to its publicly stated objective of doubling client assets to £133bn ($212.7bn) by 2015, through strong growth and an increased share of wallet. While retention is paramount, Coutts acquired more clients in 2012 than it did in 2011.