Global Private Banking Awards 2014: Winners’ Profiles – National Winners (Europe)

Best Private Bank in Belgium
KBC Private Banking

With a minimum investment threshold of €1m in investable income, KBC Private Banking, which has €25bn in assets under management, stands out from its competitors in Belgium by actively targeting the top end of the market.

“Our high entry level for private banking makes that we can focus on the high end of the market and deliver more tailor made solutions to clients,” says marketing chief Achille Boeyé. “It also increases the available client time as we can lower the number of clients served by a private banker.”

Each banker is responsible for approximately 90 clients, but KBC also offers each client a personal contact and access to investment specialists at their Client Service Desks, which are found in every branch, thus maintaining contact when private bankers are not immediately available.

With a clientele made up predominantly of first-generation entrepreneurs, KBC claims there is a high demand for innovative products and services. At the end of September it introduced impact investing into its product offering, allowing clients to obtain a financial return while also achieving a beneficial social and environmental impact. “This means it represents an alternative to philanthropy, where the party donating funds does not generate financial returns, and to traditional investment, which does not have any or has only a small beneficial social impact,” explains Mr Boeyé.

The bank has also increased allocations to real estate as a means of diversifying away from traditional fixed income and has introduced private equity club deals, an asset class it intends to continue to expand into. ES

Best Private Bank in Germany      
Berenberg

In Germany, Berenberg strives to provide its private banking clients with the kind of investment solutions that are often reserved for institutional investors, with access to the research of 80 analysts who monitor listed companies through Europe, and advisory recommendations that focus on areas that promise to add value. Assets under management have risen from €28.2bn to €30.1bn in the 2013 financial year.

To reflect the depth of its investment research and client interest among ‘Mittelstand’ small and medium sized enterprises, the bank created its Mittelstand equity portfolio, which holds 10-20 high conviction investment positions in small and mid cap listed companies from a universe of more than 100 companies listed in Germany and Austria.

The bank’s 150-strong IT department has developed a client reporting tool that can be accessed on iPads, while the firm’s Smart Order Routing trading system, which is linked with the private banking department, has also received a lot of attention and was further developed in 2013.

Independence is a Berenberg tradition. Free of corporate interests, it considers itself very much a service provider, with each adviser looking after only 50 to 55 clients.

“More than ever it is essential for banks to align their business models with the need of clients,” says Peter Raskin, head of private banking at Berenberg. In an increasingly complex and international world, Berenberg claims to have remained true to one fundamental value: adapting to the environments and resulting requirements of customers. Moreover, the need for in-depth advice has become more specific. “Foundations ask for special expertise; entrepreneurs ask different questions than senior executives; and private customers and professional athletes face different issues.”

The bank has created centres of excellence that provide in-depth know-how and a forum for exchanging ideas. Berenberg’s specialist teams attempt to meet the financial needs of a diverse range of clients. Tailored advice is complemented by a team of analysts, an economics department and a Chief Investment Office with investment strategists, which explores and implements ideas.

“Our approach allows us to develop close, attentive working relationships,” says Mr Raskin. CJ

Best Private Bank in Italy
UniCredit Private Banking

Following an effective cost cutting exercise over the past few years, UniCredit Group has budgeted around €100m for the period from 2014 to 2018 for the growth of its Italian private banking division, the country’s largest wealth manager with €90bn in private client assets, and winner of the best private bank in Italy for the second year in a row.

UniCredit Private Banking is planning to hire 100 new bankers, review its incentive system for bankers and implement marketing strategies. Around €5m will be allocated to IT development.

With technology seen as one of the key areas of innovation to enhance customer service, the private bank recently launched a new proprietary CRM system and a service of online advisory, which allows bankers to interact with clients at distance, enabling portfolio transactions in a virtual space. A service of video statements is also now available to selected clients online. Senior bankers are provided with tablets enabling them to create tailored multimedia presentations by using a proprietary app.

“Innovation and technology are part of UniCredit Group’s DNA and continuing to invest in our multi-channel strategy is crucial to capitalise on first-mover advantage,” states Dario Prunotto, head of UniCredit Private Banking Italy.

Aiming at providing solutions to achieve clients’ life goals, according to the concept of “real life private banking”, the private bank offers a broad range of wealth advisory services – including succession planning, real estate and art advisory, and it works in tandem with the group’s corporate banking to serve family businesses, which represent a large part of Italian wealth.

Last year UniCredit selected 1,200 large Italian companies, considered to be the country’s future backbone, and each of them is now managed by a dedicated team of senior executives from private and corporate banking, as well as the risk management division.

Believing in the merits of guided architecture, UniCredit PB sources mutual funds from a dozen of asset managements firms, and also offers fiscally efficient life insurance solutions, recognising that many clients have entered a phase of wealth decumulation, with family firms or real estate no longer able to provide regular income.

The Italian private banking market is estimated to be worth €900bn, but around 50 per cent of target clients are not currently served by specialist banks. “This represents a formidable opportunity to further develop our business,” claims Mr Prunotto, despite acknowledging strong competition on the ground, and that a percentage of the bank’s clients use only partially the services available to them. “The challenge for us is to value these relationships. This will enable us to improve both customer satisfaction and the bank’s profitability.” ET

Best Private Bank in Luxembourg
Best Private Bank in the Netherlands
ING Private Banking

ING is taking a very different approach to other wealth managers operating in the Dutch market, according to Karien van Gennip, general manager of ING Private Banking Netherlands. “Other private banks in the Netherlands are centralising their operations, moving away physically from their client base,” she says. “ING on the other hand has implemented a different strategy. By opening ‘Private Banking hotspots’ we now offer premium services locally.”

In 2013 ING Private Banking opened nine of these hotspots in an attempt to boost its local presence and visibility across the country. Besides solidifying relationships with existing clients, the bank is determined to find new ones, and is using the wider ING group, the largest in the country, to do so, identifying potential clients from among its retail and business customers.

Product-wise, the bank has been responding to the demand for cost-effective passive vehicles. “We have recently launched an asset management strategy fully compiled of index tracking instruments,” says Ms Gennip. “By combining these relatively low-cost products with the expertise of our ING Investment Office, we offer a clear alternative to the use of more actively managed funds.”

Over in Luxembourg, changes in the regulatory landscape and an evolution in customer behaviour and expectations have left the principality at something of a crossroads, says Sandrine De Vuyst, head of private banking for ING in the country, and business models are having to change.

“We are developing the bank as an international hub for ING Group in the private banking profession in order to allow other clients within the group to benefit from our private banking knowledge and expertise,” she says. “In addition we are looking to increase our local market share of private clients, using our universal approach.”

As well as the Netherlands and Luxembourg, ING Private Banking, which has €43bn in asset under management, services wealthy individuals in Poland, Romania and Turkey. ES

Best Private Bank in Sweden        
Best Private Bank in the Baltic countries
SEB Private Banking

SEB Private Banking scooped the awards for best private bank in Sweden and best private bank in the Baltic Countries. In Sweden, the bank has a dominant market position especially in the ultra high net worth, family office and foundation segments, with the width and depth in its service offering.

Across the industry, the cost of investment advice has risen owing to regulations such as Mifid II, Emir, Aifmd, Fatca and Dodd Frank. SEB has bucked the trend and continues to enhance its service offering for chosen target segments across the range of investments, financing, philanthropy, legal and smart everyday banking services.

“We are in it for the long run and manage client relationship over generations,”says Martin Gärtner, SEB’s global head of private banking. “Private banking is an important part of SEB’s historical heritage.”

While much has happened in terms of electronic platforms, the personal meeting remains key in a private banking relationship that often takes time to develop.

“It’s a big responsibility to manage a client’s assets and developing an understanding for things such as risk tolerance often takes time. There is theoretical and practical risk acceptance. The two often deviate and vary based on experience as well as other things in life,” says Mr Gärtner. He thinks SEB has become better in incorporating some of the findings from behavioral finance and that this enables a more direct and concrete client dialogue.

It is however important to note that a willingness to take on risk seems to vary with changing market conditions.

 “Client behaviour has changed and risk appetite is back due to the prolonged bull market we have experienced since the financial crisis,” says Sebastian Siegl, SEB’s global head of investment strategy. “Some clients will buy discretionary services, others advisory and a lot of clients also want access to a broad range of research to make their own decisions.”

It is important to have a broad offering and to take self-directed customers into account. Given the changes in technology and how globilised financial markets have become there are now several ways to interact with them, adds Mr Siegl.  CJ

Best Private Bank in Denmark
Danske Bank

Despite winning the award for the second time in a row, competition in Denmark has intensified during the last year, reports Marlene Nørgaard, head of private banking for Danske Bank in the country. International banks have entered the Danish market and domestic players are focusing on and investing in the private banking segment.

“That has only encouraged us to further fine-tune our unique operating model for serving wealthy customers,” she says. The bank has developed local activity plans to pick up on regional differences within the country and integrated Danske’s Trustee’s and Family Foundations lines within private banking.

“The result has been a growing market share with double digit growth in assets and a net inflow of new customers.”

Danske Bank is Denmark’s largest financial organisation and offers holistic private banking services to customers resident and domiciled in Denmark, Sweden, Norway and Finland. The bank’s Luxembourg and London units focus on Nordic customers residing outside the region, primarily retirees and expatriates. Younger customers are also targeted – with segments running from Private Banking Kids through to Private Banking Senior, Danske targets all generations. “We are caretakers in a full lifecycle,” claims Ms Nørgaard.

The bank’s in-house developed Wealth Planner tool is designed to transform complex financial matters into an easy to understand visual overview. Clients are able to evaluate the consequences and the risks which various actions are likely to have on their balance sheets both in the present and the future and compare them to their goals and ambitions. ES

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

With more than €65bn in assets under management, Nordea Private Banking is the largest private bank in the Nordic region, with 80 local branches and around 900 employees across Denmark, Finland, Norway and Sweden.

Over the past 10 years the private bank has achieved substantial growth, both in terms of AUM, showing a compound annual growth rate of 11 per cent, as well as number of clients and net income.

Improved client satisfaction and higher earnings are the result of some key projects.

The bank strengthened its investment offering, especially for business owners and entrepreneurs, with a renewed focus on providing strategic advice in areas such as tax, succession planning and sale of business.

A client satisfaction index, where all client meetings are measured on quality and client experiences, offers the bank clear insights on how the institution is perceived, and a solid base for improving RM’s training and increasing client referrals.

A key area of development is around digital channels, crucial to attract the next generation.

“We want to move from basic online banking to more high-level interactions, and digitally connect with our clients through multi-channel touch points,” says Jukka Perttula, head of private banking, Finland, at Nordea.

Significant resources are being invested towards the automation and digitalisation of internal systems. The aim is to develop trading platforms, online financial tools and a portfolio management system to better respond to client needs. More sophisticated online reporting, suitable for mobile devices, is also being designed. These developments come with the need to “keep a strong hold on security and privacy,” acknowledges Mr Perttula.

On the investment side, the current low yield environment poses challenges and brings opportunities. “We have to be alert and recommend alternative ways to generate income to our clients,” for example by adopting a more flexible approach towards fixed income and dividend-paying stocks, he says. But also there is a concrete need to offer a broader selection of alternative investments, believes Mr Perttula.  ET

Best Private Bank in Spain
BBVA Banca Privada

While progress in portfolio management, risk monitoring and regulatory compliance will always be key focuses in any bank, BBVA Banca Privada also prides itself on its ability to anticipate new customer lifestyles and adapt to them through a range of different channels.

Since 2013, the bank’s common infrastructure has allowed customers to start an operation in one channel and complete it whenever and wherever they want using the same navigation flows. The bank’s main innovations last year included enhancing its mobile app to have the same look, structure and functionality as its website, and the design of detailed monthly portfolio client reports which are accessible from the website.

BBVA is also trying to improve engagement with clients by offering a service that goes beyond pure banking. An important development has been the Family Wealth Community, based on three interconnected pillars of family, enterprise and wealth. The number of contributors providing content and events to the platform has increased to 30 this year, and in 2013, more than 150 events were held on all matters such as legal and tax developments, the situation in financial markets and macroeconomic analysis.

“One of our main aims within 2014 and 2015 is leveraging on new technologies and the flexibility of the different communication channels to allow our customers to gain access to immediate, customised and thorough information about their assets whenever and wherever they want,” says Alberto Calvo, head of BBVA Patrimonios.

 “Efficient execution of transactions and an overall investment risk assessment, together with a personalised face-to-face advisory approach, not only related to financial aspects, are also key to our partnership stance. We are able to achieve all these goals thanks to our innovative tools such as Asesora, Planifica, our closed community The Family Wealth Community, as well as our global risk tool.” CJ

Best Private Bank in Portugal
BPI

The last three years have proved challenging for Portuguese banking, with austerity measures hitting business activity and levels of wealth creation. Banco Português de Investimento (BPI) chose to focus on profitability rather than volume and has done its best to turn this difficult environment into an opportunity to differentiate from its competitors.

The bank reduced the complexity of products and portfolios, invested in technology and focused on its niche of Portuguese-speaking clients, and between 2011 and 2013 the private banking unit increased revenues more than 200 per cent while reducing costs by 10 per cent.

“BPI focuses on its core capabilities and hires or outsources the best
experienced partners in non-core activities that arise,” says managing director António Luna Vaz, claiming the bank’s open architecture model makes it stand out from its rivals and also helps to avoid conflicts of interest between the private banking unit and the wider bank.

It has not been easy running though. BPI has seen a slight dip in its numbers of private clients, although assets under management increased by 17.5 per cent between 2011 and 2013 to €4.5bn. “The increasing level of regulation in a low growth environment is challenging industry profitability as a whole, and BPI is not immune to such a fast change,” he says, explaining how this was one of the big drivers of its investment in technology. The bank needed to find software that would be reliable when it came to treating data from different custodians and found a solution offered by Advent. ES

Best Private Bank in Andorra
Andbank

Andbank, formed in 2001 by the merger between Banc Agrícol (owned by the Cerqueda family) and Banca Reig (owned by the Reig family), has a presence on two continents, and one of the highest solvency and liquidity ratios in the industry (20.69 per cent and 67.33 per cent respectively). With a long-term rating of A- by Fitch Ratings, it can claim to be one of the most solid private banks in the international financial sector.

Owned by the third generation of these two entities, it is the will of the shareholders that no family member is involved in the management, ensuring full independence.

Andbank closed 2013 on a very positive note, having met the targets set in the Strategic Plan with room to spare: doubling the size of, and diversifying, the bank’s balance sheet and improving performance to pre-crisis levels, according to Jordi Comas Planas, chief executive officer.

Andbank increased customer assets to €13.4bn, up from from €11bn in 2012. This now makes it the largest financial institution in Andorra in terms of assets under management, with a market share of 32.8 per cent.

Additionally, in July 2013 Andbank carried out the acquisition of the retail business of Banco Inversis in Spain, adding around €4.8bn of assets under management that will be consolidated at the end of 2014.

“Added to the group’s existing business in Spain, this will make it one of the country’s largest private banks,” says Mr Planas. CJ

Best Private Bank in Greece
Eurobank

The sovereign domestic and global financial crises have taken a heavy toll on the Greek private banking industry, which has seen its total assets halved to €10bn since the highest levels reached six years ago, according to Eurobank.

The key issue for the surviving four key local banks is to devise strategies to attract back private investors’ funds withdrawn during the crisis, and try and draw new clients’ money.

To rise to the challenge, over the past few years Eurobank – the first winner for this category since the awards were started six years ago – has launched a new wealth management platform, which allowed it to improve and simplify reporting to clients, as well as managing and monitoring accounts more effectively.

While new services such as systematic trading and account consolidation have enhanced its advisory offering, with more than 1,300 funds on offer, the bank claims to be the largest fund provider in the market.

In a bid to attract investors’ wealth, and increase the portion of mutual funds as a percentage of the total client assets, Eurobank also plans to introduce specialised thematic funds (private equity, shipping, systematic trading, real estate) for high end clients, develop the synergies with its Luxembourg international office and booking centre, and launch “sophisticated but easy to distribute” discretionary asset management services for small to medium-sized portfolios.

“The recent fiscal crisis left in its wake an unusually large percentage of cash equivalent content in the average client portfolio, as a result of systemic fears and domestic market volatility,” says Alexandros Tsourinakis, head of Eurobank Private Banking.

However, deep consolidation in the domestic private banking sector has created significant opportunities to acquire clients and private bankers, with the whole market expected to be boosted by increasing money flows returning to the country, as several European banks, such as EFG International and Credit Suisse, set up offices in Athens in a bid to take advantage of the trend.

 “The predominant key opportunity in the domestic market is the acquisition of new market share due to the radical reshaping of the domestic competitive landscape,” states Mr Tsourinakis.

Eurobank Private Banking’s assets decreased by 6 per cent last year compared to the year before, reaching €6.4bn, but net new money surged by 25 per cent since 2012. Operating income and profit also increased significantly.

 “We see a gradual increase of the domestic private banking market to the tune of 5-10 per cent per annum for the next two years, under fair economic and political scenario assumptions,” says Mr Tsourinakis. ET

Best Private Bank in Liechtenstein
LGT

LGT Group, which has taken the honours in the bank’s native Liechtenstein as well as being highly commended for its work in nearby Austria, is one of the fastest growing wealth management groups in Europe, with 2000 staff now servicing clients in more than 20 locations worldwide.

Managing $124bn (€98bn) for wealthy investors and institutions, under the leadership of Prince Maximilian, LGT is also starting to gather assets in Asia, from where up to 25 per cent of the business base is now sourced.

There are two fully-fledged booking platforms in Singapore and Hong Kong.

LGT’s successful run has been in part down to its ability to attract staff from rivals, many of which have been struggling with brand and image in recent years. “We observe that our value proposition, our platforms and the way we do business are very attractive for experienced relationship managers. We have thus been able to hire a large number of individuals and teams for our franchises in Europe, the Middle East and Asia,” says Thomas Piske, CEO at LGT Private Banking.

Because of this current availability of staff, the bank will continue to invest in organic growth. “We will seek to bring further good client relationship officers and teams onboard. Thanks to our solid capitalisation, our stable ownership structure and our prudent, long-term strategy, we feel we have an excellent basis for achieving this,” says Mr Piske.

The bank also feels it is well-positioned to take advantage of the consolidation process in private banking, having recently announced the purchase of a portfolio of selected private banking assets worth more than $10bn bn from HSBC. “We will continue to monitor further acquisition opportunities,” comments Mr Piske.

While a fine from the German authorities in 2010 following a major data theft is now “history”, says Mr Piske, he maintains it is extremely difficult for a foreign private banking institution to be profitable in the German market. “We have no knowledge of a successful example, and we know the market well,” he comments. However, LGT does not exclude the possibility of a local presence in Germany through the EU passporting mechanism allowed to LGT as a Liechtenstein bank, making the most of its home country brand and domicile.

Austria is currently more of a priority, where the Liechtenstein family can build on close ties with Austrian aristocracy in a tight cultural fit. YB

Best Private Bank in Switzerland
Pictet

Pictet & Cie remains a force to be reckoned with in its native Switzerland – where some bigger competitors have struggled with their image following the crisis from 2008 onwards – yet many of its ambitions are now beyond the borders of its home country.

The reshaping of the group at the beginning of 2014, moving away from a murky unlimited liability partnership structure to a more transparent reporting system is a final recognition that the future of private banking is not based on servicing the needs of secretive clients who arrive on the banks of Lake Geneva twice a year. Pictet even moved to a new HQ in a much less fashionable quarter of Geneva back in 2006 to herald this oncoming transformation. 

In fact, the partners began to give some thought to how governance could be improved and the group’s organisational structure made more coherent in the middle of the 2000s.

The bank sees its main growth in neighbouring European markets, as well as Asia and the UK, which it has marked for strategic attention, expecting to add a handful of relationship managers in 2015 to service both domestic customers and international clients who now feel safer booking their business in London rather than flagging rival centres.

“We expect to see significant growth in Europe and Asia,” says Heinrich Adami, group managing director at Pictet & Cie, charged with doubling assets currently managed by the Swiss bank’s London office.

“Pictet has embarked on a major expansion of its UK-based wealth management presence,” he says, “adding during the year a number of senior private bankers, as well as reinforcing services such as wealth and portfolio structuring for clients.”

Pictet has 26 offices in 15 countries, and yet paradoxically, despite its international ambitions and outlook, it is currently in Switzerland where it is most appreciated by clients. While other local competitors were rattled by the crisis and struggled to emerge from it in one piece, Pictet has shown positive growth in managed assets, staff and offices.

Like other banks, Pictet has been in contact with US authorities since 2012 in order to discuss the bank’s “individual case,” although it believes the process may “take some time.”

All told, Pictet’s differentiating factor has perhaps been a strong investment engine, based on thematic initiatives, with experienced staff leading the investment operations of both the private banking and Pictet Funds franchises in Geneva.  YB

Best Private Bank in the UK
Coutts

The last few years have been critical for Coutts. Since 2010, the bank has sharpened its geographical focus, reducing its international footprint from 177 to 70 geographies, to focus on the UK, the Middle East, Asia, Russia and Switzerland.

The bank aims to grow its international business to 60 per cent of the whole by the end of 2015, and already 50 per cent of its assets under management are from international clients, but it also continues to have a strong regional presence in the UK, with 23 offices and the appointment of 295 additional staff over the last year. Reported plans to sell the Swiss division, which has branches in Asia, may however be hampered by potential liabilities to the US authorities.

Coutts was the first UK Private Bank to launch a full advice-led proposition. Great efforts are going into developing a professional ‘practice’ across the business, and on delivering solid investment advice coupled with timely product capability. Around £3.6bn (€4.53bn) in assets under advice have been invested in the bank’s new model post-RDR to date, and the platform, Avaloq, quickly came into its own, as it enables clients to view all their fees in one place.

With its 300-year history, Coutts is a big brand and needs to behave in a way that maintains its reputation for service and expertise, yet while forging ahead with tasks such as cutting expenses at the RBS Wealth Division, which were down by £15m or 7 per cent for the financial year ending 2013. CJ

Best Private Bank in Ukraine
UkrSibbank BNP Paribas Group

UkrSibbank, despite being one of Ukraine’s most high profile wealth managers, has nevertheless shared the collective shock of the country’s beleaguered banking sector following Russia’s forced annexation of a chunk of Ukrainian territory back in March.

Along with competitor banks, UkrSibbank had to suspend all its business in Crimea in April, 2014. Moreover, services have also been curtailed in the smokestack cities of Donetsk and Luhansk, where many of the institution’s business customers were based, because these areas are now under the control of separatist forces. 

“Our branches are also closed in areas where military actions are currently taking place,” confirms Alexey Aleksandrov, the youthful, energetic head of private banking.

“However we are able to serve our clients in locations other than Donetsk and Crimea. All operations are available through our internet banking service and at branches throughout Ukraine.”

Due diligence processes regarding onboarding of new clients have been under scrutiny across the country, after controversial figures involved in Ukraine’s previous regime fled the country, attempting to take billions in assets with them.

“When taking on a new client UkrSibbank, belonging to the BNP Paribas Group, complies with the global standards of the Group, as well as to the Ukrainian regulatory legislation,” says Mr Aleksandrov. “These verifications are confirmed on a regular basis. Obviously we check that the parties we deal with are not affected by the EU or US sanctions.”

The bank was recently subjected to the intensive “stress tests” organised by the National Bank of Ukraine and “passed them without problem”, says Mr Aleksandrov.

Key inspirations for the bank’s business model came from exploratory trips to Credit Suisse, HSBC and Lloyds made back in 2004 by Mr Alexandrov, who is keen to stress the vast difference in psychology between Ukrainian and Russian private clients.

“Ukrainian customers need to analyse information, see documents, visit your offices and attend at least two or three meetings with private bankers before making a decision,” he recently told PWM. Russians, on the other hand, sign up after one
meeting. YB

Best Private Bank in Kazakhstan
ATFBank JSC

 Bought by UniCredit at the height of the credit boom in 2007, ATFBank was then sold last year, for less than a quarter of the original $2.1bn (€1.65bn) paid, to a Kazakh insurance holding called today KNG Finance. This move was part of the Italian bank’s post-crisis strategy to refocus on its core assets.

Under the Italian bank’s ownership, the Almaty-based Kazakhstani bank opened a separate private banking division launching the first private centres in 2008 in the former capital and the new one Astana, and then building a wider private banking network in the country. Over the years, it has absorbed best practices and management and servicing standards from its international parent.

Although private banking is still in its infancy in the country, with most of the local banks having launched dedicated wealth management services only in the past three years, ATFBank boasts about serving generations of clients, with almost half of its client base having banked with the institution for more than five years.

While 70 per cent of its private banking income comes from deposits, the bank has launched a number of banking products to face increased competition, including the Jewelry Visa card, made by precious metals and decorated with stones, which drew client interest.

In the relatively small Kazakh market, where legislative restrictions can make the product development process a challenging and lengthy one, “client retention is a big challenge now,” says Gulnar Balakhmetova, head of Private Banking at ATFBank.

While some banks offer higher deposit interest rates and lower commissions, ATF’s strategy is “to provide stable, high quality and efficient banking services, while ensuring clients full confidentiality, and constantly improving product offering,” adds Ms Balakhmetova.

The bank’s focus is on developing a more sophisticated asset management model, by offering investment products, including structured deposits, in partnership with local investment company Asyl-Invest, considering that subsidiary company ATFFinance closed last year. The bank is also looking to provide a range of ‘social products’ – including deposits and payment cards developed for charitable purposes for private banking clients – and further develop the premium cards offering.

The previous head of research of one of the largest investment banks in Kazakhstan commented that unlike competitors such as Eurasian Bank, which is still quite new in the business – and most of its private banking clients are believed to be upgraded wealthy retail clients, ATF has a “consistent strategy to target wealthy people with premium services, much more like a traditional private bank”. ET

Best Private Bank in Georgia
TBC Bank Private Banking

Founded in 1992, TBC was one of the first privately owned banks in Georgia, and in 2005 it introduced its VIP Banking service, its first line of private banking. It has since added its Wealth Management and TBC Status Banking lines.

The bank admits Georgia’s private and investment banking markets are vastly underdeveloped, though it strives to offer contemporary banking services and products to its clients, while this also means there is plenty of potential for domestic growth.

“We maintain a clear focus on core banking/lending activities in the Georgian market with local operations comprising 98.3 per cent of our total assets,” says CEO Vakhtang Butskhrikidze. “Hence our future plans are associated with expansion on the Georgian market solely.”

The bank does have the ability to reach non-resident clients both within and outside of Georgia through TBC invest, its representative office in Israel, which was established in 2011 and acts as an intermediary between potential future clients and the bank.

TBC’s multichannel strategy has been applied to its private banking services with internet and mobile platforms keeping the need for face to face communication to a minimum. Almost 100 per cent of its Wealth Management services are conducted remotely, with VIP and Status at around 40 per cent. In 2014 the bank launched the first fully iOS-integrated iPad app in the country. ES

Best Private Bank in Hungary
OTP Private Banking

OTP Private Banking, headquartered in Budapest, has a 31 per cent share of its domestic market and is a growing player in the CEE region, managing more than  €4.2bn in client assets.

In recent years the main challenge for CEE private banks has been to benefit from the region’s growth opportunities while at the same time taking action to manage risk factors. In 2013, OTP PB’s total AUM increased by 16 per cent in Hungary, while its cost/income ratio improved by 3 basis points coming down to 58 basis points, which is low in comparison with its peers.

The bank aimed to improve financial indicators and efficiency without cutting back on service levels, using a segment differentiated model, where they differentiate not only between the upper affluent and high net worth segments, but within the wide upper-affluent base there are further sub-segmentations and different service tiers for each sub-segment.

This approach was complemented by an innovative pricing structure and segment-weighted headcount model which targets the increase of the service fee on non-core clients.

 CEE private banks and OTP Private Banking face considerable challenges ahead.

“Further cross-border and domestic regulation pressure generates extra costs, while the historical low interest rate environment overwrites the margin composition and creates dramatic changes regarding the clients’ needs,” says András Takács, managing director and head of wealth and investment management at OTP Bank. “Our success in the last decade proves that we have the capability to implement innovative solutions to give strategic answers in various economic situations, which makes me confident we will successfully tackle new challenges as well.” CJ

Best Private Bank in the Czech Republic
ČSOB Private Banking

Although ČSOB, one of the more innovative banks in the Czech Republic, has maintained its status as the country’s sharpest private banking outfit, the outlook is not necessary a rosy one, as competition for clients heats up. This is particularly the case now that many Czech entities are backed by the firepower of foreign parents.

Currently, the main wealth-servicing rivals in the sights of ČSOB management are UniCredit Bank and Komerčni Bank. Tellingly, just like ČSOB, both have a foreign parent company.

“The opportunity for us to draw on the expertise of KBC Bank, our parent company, is more than welcome,” comments Pavel Tichy, Wealth Office director at ČSOB. Particularly of interest are the funds and other products offered by KBC branches in Belgium, which offer investment synergies and “suggest themselves naturally” as part of an enhanced product strategy.

While ČSOB Bank has now become the country’s biggest fund provider, there is a concerted effort to open up the platform to external products in order to satisfy client needs. “This is a good start and sign for our more demanding clients, leading to provision of better service,” adds Mr Tichy.

A formal Private Banking Community, known internally as PriBaCo, comprises representatives from the whole KBC group and meets several times annually to share knowledge and experience and to identify solutions.

As well as challenges from competitors, Mr Tichy sees regulation as a sometimes tricky hurdle to negotiate, not just Czech rules, but directives now emanating from Brussels, including Mifid II and the Prips product regulations.

“Regulation is changing very fast and one must comply with it no matter what,” says Mr Tichy. “At the same time, one has to bring tailor-made solutions to private clients.”

Yet the task of finding high-quality staff may be toughest of all, believes Mr Tichy. “Given that each and every financial institution has to face the same political, economic and regulatory issues, we feel the biggest growth-restricting challenge will stem from the lack of perfect private bankers.”   YB

Best Private Bank in Slovakia
Tatra Banka

Tatra Banka’s private banking arm, the largest and oldest in Slovakia, manages the assets of more than 3,400 clients, with total assets under management of €1.7bn.

Up until 2011, all clients were offered just the one investment account, which the bank admits was not well suited to responding to an individual’s goals and needs. So a new wealth management process was implemented with a clear focus placed on identifying and understanding customers’ goals. In addition to cash, there are now three separate strategies on offer. The Wealth Immunization portfolio is all about safety, eliminating credit and liquidity risks and offering inflation protection. High quality government bonds and asset backed securities are typical investments.

The Wealth Growth portfolio, which aims to deliver yield and growth, is particularly suitable for managing retirement assets and the balancing of risk off and risk on assets is subject to in-house models run by the Tatra Asset Management committee.

Finally, the Wealth Opportunity portfolio is defined as the “speculator pot” – although Tatra is keen to cap clients at 10 per cent exposure to this strategy, which is run on a 100 per cent open architecture basis. The bank encourages its clients only to make allocations to this higher risk strategy once they have realised their goals in the other two portfolios.

Falling interest rates have been a major concern, admits Katarína Boledovičová, director of private banking, and Tatra has tried to become more innovative in response, offering clients products such as master feeders, best entry certificates and premium deposits. ES

Best Private Bank in Poland
Citi Handlowy

Emerging from the merger of Citibank Poland and Bank Handlowy w Warszawie in 2011, Citi Handlowy leveraged on the expertise and best practices adopted at Citi, its global parent and major shareholder, when it rolled out its ‘trusted advisory model’ last year. Based on investment research and analysis on both local and international markets, this model is also the first of this type offered on large scale in the country, according to Citi Handlowy, and contributed to increase its client base by 25 per cent in 2013.

The bank prides itself in offering a “unique global banking value proposition”, being the only global consumer bank in the Polish market. Its 180 relationship managers are supported by a team of specialists and have access to more than 550 ‘Citigold’ centres globally. The bank is expected to finalise the recruitment of 70 new staff by the end of the year.

The reduction of interest rates in Eastern Europe’s biggest economy, with Poland’s central bank just recently having cut interest rates by a deeper than expected 50 basis points to 2 per cent, is a key growth opportunity for the domestic private banking sector, as it is expected to drive wealthy investors more towards investment and foreign-exchange solutions, explains Tomasz Pol, wealth management head at the bank.

At each private banking branch of the Polish institution, a certified portfolio counsellor and FX expert assists the relationship manager, providing support in client meetings on FX transactions and FX-based products, such as dual currency deposits.

Thanks to an iPad app launched last year, customers have now the opportunity to transfer money and monitor their finances on the go, and the bank is planning to upgrade its wealth planning software, in the front, middle, and back office to enhance service quality.

“Compared to other markets where Citi is present, we still have lots of scope for improvement in terms of process efficiency,” admits Mr Pol. “If we are able to adapt best-practice solutions from other markets, we will for sure achieve much higher customer satisfaction.”

Execution should also be further enhanced, he says. “We have best-in-class products and wealth management solutions and the challenge now is to deliver this message in an effective way to all our customers.”

Last year, the bank’s AUM grew by 27 per cent to PLN8.1bn (€1.9bn). ET