Global Private Banking Awards 2016: Winners’ Profiles – National Winners (Southern Europe)

Best Private Bank in Italy
Banca Generali

In the difficult context of the Italian banking crisis, which is totally reshaping the sector as institutions struggle with bad debt, and challenging financial markets – the best positioned private bank was advice-oriented, promotori, or financial advisers-network Banca Generali. 

Part of the international insurance and financial firm Generali Group, Banca Generali last year experienced a record growth in net new money of €4.6bn ($5.1bn), continuing the positive trend of the previous two years. Positive inflows extended in the first sixth months of 2016, totalling €2.5bn. Its cost-income ratio is one of the lowest in the Italian market at 34.7 per cent.

The acquisition of Credit Suisse in Italy in 2013 undoubtedly represented a turning point in the bank’s history, contributing to significantly increase client assets, while improving people’s perception of the institution as a “prime private bank”. 

Assets under management almost doubled over the past three years, growing to more than €43bn at the end of June. Of these, around 60 per cent are sourced from HNW clients with assets with more than €500,000, while the remainder comes from the affluent segment.

“Product and service innovation, as well as investments in technology, are key success factors,” says Gian Maria Mossa, general manager of Banca Generali since 2013. 

The launch in 2015 of a fully dedicated wealth management division – aimed at providing holistic financial planning, ranging from financial advice to real estate advisory, tax optimisation and succession planning – led to a 10 per cent increase in the number of clients, with a growing share of HNW individuals. The new service model, which relies on partnerships with external firms, such as PwC and multi-family office Tosetti Value, is also helping the private bank diversify its revenue streams away from financial products management fees, which today represent the majority of its revenues. 

A highly diversified discretionary portfolio management solution (or gestione patrimoniale) designed for largest clients, attracted €1bn in the few months since its launch last year. The bank’s long standing open architecture approach benefits from the product and manager selection skills of its asset management division and its subsidiary, BG Investment, in Luxembourg, which makes a heavy use of sub-advisers to run its products. 

Recruiting new private bankers is also crucial to the bank’s growth strategy, says Mr Mossa, “although the focus is not on quantity, but on quality”. In 2015, the bank hired more than 100 advisers, the majority sourced from competitors, and the recruiting process has continued this year. The growing number of female advisers (women represent 51 per cent of the bank’s total staff), “increasingly add value within the typically male-oriented financial world”, says Mr Mossa.

Advisers are all equipped with tablets, following the introduction of the biometric digital signature, which the instution claims to have pioneered in the country. Banca Generali is currently launching a new digital instrument, which will enable private bankers to propose investment solutions to clients through their smartphones. ET

Best Private Bank in Monaco
Compagnie Monégasque de Banque CMB

The principality of Monaco is the second smallest state in the world, which explains why CMB has always serviced the local market, from which it sources more than half of its €9.8bn client assets, alongside offshore clients.

Domestic private banking has thrived to service the growing number of wealthy individuals who have settled in Monaco as well as non-resident clients. 

The absence of direct taxation for Monegasque residents – there are no income, capital gains or wealth taxes – is a key factor that draws in many businesses, investors and private individuals to Monaco, which is a zero debt country, explains Werner Peyer, CEO at CMB. 

Political and economic stability, sound public finances, legal system and high quality of banking supervision and legislation for data protection are all also important factors in the development of the industry.

“Monaco has the highest level of UHNWI residents by square kilometre in the world. The key challenge is to deliver the highest quality of services and top quality of expertise and competence to those investors who are multi-banked around the world,” says Mr Peyer. 

“At the same time it provides offshore services to those investors who seek political and financial stability of their financial centre beyond the fiscal optimisation of the past.” 

CMB claims to have been quick in anticipating the steps the Monaco government would take towards full transparency, in line with the global trend, and in preparation for the upcoming automatic exchange of tax information. 

The institution increased its competences in asset management, deciding to sub-advise niche asset classes to third party managers, while offering external funds in open architecture. The bank has also developed a competitive credit policy including real-estate financing in the South of France to cater to wealthy French tax residents. 

Finally, it has revamped its technology platform. However, apart from money transfers, no other instructions are accepted through digital channels, as the bank believes personal contact is key to the quality of relationships.

In addition to French clients, a key client target, the bank sees growth with non-domiciled US clients and UK residents, who need offshore account solutions. The bank opened a subsidiary in London last year, CMB Wealth Management, to achieve proximity with the latter. It is also planning to run other asset management operations where its shareholder Italian investment bank Mediobanca is present, with the aim of developing cross-selling opportunities.

Outside the developed markets of Europe, Australia and North America, CMB works with a network of professional intermediaries, in particular independent asset managers, to target new client segments in Latin-America, Asia and Africa. ET

Best Private Bank in Andorra
Andbank

Andbank has been busy. In late November 2015, it signed an agreement with Israeli investment boutique Sigma Investment House and also concluded the acquisition of Banco Bracce in Brazil, after formalising a non-binding offer in 2013. With these two operations, the Andbank Group has expanded its presence to 12 countries and increased the number of banking licenses to seven.

It is a strategy that is proving profitable, with the International Private Banking division the main engine of the bank’s growth. Andbank Group ended 2015 with €22.8bn ($25bn) in assets under management, of which €17.7bn comes from the international arena. Of the bank’s 1100 employees, just 400 are based in Andorra, the rest in international subsidiaries.

CEO Ricard Tubau is excited by the possibilities the recent expansions have opened up. “Being present in Brazil represents a huge opportunity for future acquisitions in South America which would give added-value to our institution,” he explains, adding that Andbank’s presence in Spain also provides an “optimum port of entry for obtaining privileged access to Latin America, a region with which it enjoys deeply-rooted ties”.

Likewise, the Sigma deal not only gives the bank access to the “outstanding potential” of the Israeli market, but a link to the other Jewish communities located around the world. 

Mr Tubau is keen not to get ahead of himself though. “We have no plans to expand any further in the short term,” he insists. “Our main aim is to consolidate our competitive position in the three main markets we entered recently – Spain, Brazil and Israel.” ES

Best Private Bank in Spain
Best Private Bank for Use of Technology
BBVA Banca Privada

After years of little progress, with well-resourced US banks standing well above lowly locals, Spain now sees its home-grown institutions revitalised and empowered after the country’s economic crisis. Among those in the vanguard is BBVA Banca Privada, which stresses the notion of client experience above all else, boosted by an ongoing digital transformation.

BBVA was slightly ahead of its rivals as one of Spain’s early leaders in digitisation, as only the fast movers were left standing, after a whole host of the banking small fry were bought up or collapsed during the crisis.

Part of this sea change has involved the establishment of a Data Analytics department, devoted to analysing so-called ‘big data’, aggregated information, collected during every minute of customer transactions, using the skills of top statisticians, mathematicians and data scientists.

“The intensive use of technology allows us to develop a consistent investment process, which offers excellent long-term performance to our clients,” says Jorge Gordo Naveso, director of private banking at BBVA Banca Privada.

The transformation also involves a much more user-friendly onboarding process and specific services channelled to customers through tablets, smartphones and wearable technology.

One of the client sectors key to the management’s hearts is the family office segment, which presents a whole team of specialists in areas such as credit, tax and portfolio management to each wealthy family client. This initiative incorporates real estate advisory, new generation programmes, business planning and specialisation in areas including art. The range of available investments is also being revitalised, emphasising megatrend funds – identifying niches in sectors affected by environmental, technological and political changes – private equity, real estate and corporate finance-led strategies. 

Clients’ focus on real estate has increased hugely during the last three years, during which they have weighed up growing prices and yields from property investment against negative interest rates offered by banks, admits Mr Gordo Naveso. However he urges them not to get carried away by the euphoria and to maintain exposure to bonds and equities according to recommended risk profiles. Importantly for the bank, a trend among clients to transfer assets abroad and to trust their own financial system less appears to be in reversal following recent political shifts in Spain. YB

Best Private Bank in Portugal
Millennium bcp

The private banking arm of Millennium BCP, part of Banco Comercial Português, has worked hard in recent years at client acquisition, customer service and efficiency: keeping the cost-to-income ratio “at a level as low as possible”, to use the words of the bank. 

Keeping customers satisfied can be hard given present economic circumstances. “The ultra-low interest rate environment and the instability of the European banking sector are the two key challenges for private clients,” says Vasco Rebello de Andrade, head of private banking. “In this environment we continue to search for diversified solutions that may help our clients to preserve and grow their wealth without taking on board unnecessary market or liquidity risks.” 

Mr Rebello de Andrade emphasises the need to devise strategies that stay within clients’ quite limited risk parameters. “Portuguese clients are risk-averse, so they tend to show clear preference for bonds over equities and for euro-denominated assets over any other.”

Having said that, their preferences are changing somewhat – and the bank has been striving to meet these subtle alterations. Mr Rebello de Andrade notes that although euro-denominated assets are the dominant part of their portfolios, regional and currency diversification has been growing over the past few years.

In common with all private banks, however, Millennium has been working to counter the perennial habit among wealthy clients of keeping an excessively large amount of their money in extremely low-yielding cash – a habit which not only hits the overall returns of clients, but is also bad for private banks, since most of it does not earn management fees. 

One of the bank’s recent priorities has been to maximise the operation’s profitability by gradually shifting the clients’ product mix from term deposits (which generate low and continuously decreasing financial margins) to third party asset management products (which generate higher income through distribution and service fees) or tailor-made structured products (which allow a pre-definition of the bank’s margin at acceptable levels). DT

Best Private Bank in Greece
Eurobank

Capital control restrictions coupled with “high cash burn”, mainly over new taxes, leave little room for growth in the domestic market, says Alexander Tsourinakis, deputy general manager, head of private banking Greece at Eurobank. 

Growth is expected to come mainly from inflows of Greek accounts abroad, through the bank’s Luxembourg subsidiary. The bank, which also offers wealth management services in London and Cyprus, experienced positive net new money last year – €200m ($220m) – but its assets under management have dropped by €900m to €5.6bn.

However, despite capital controls, which were substantially eased in August more than a year after they were imposed, investment management is largely unhampered for both local and global assets, says Mr Tsourinakis. “This has removed a major hurdle in running local portfolios, gradually re-establishing investors’ trust in the banking system.”

There has also been a gradual return of liquidity to Greek banks, which signals a cautious return to normality and reflects the fact that balance sheets are currently very well capitalised, he observes.

Eurobank Private Banking has continued to develop its product range in open architecture, also enhancing the breadth of its advisory services, particularly focusing on family offices, account consolidation and ‘virtual advisory’. The latter enables clients to have a more complete view of their investments worldwide. 

The institution aims at offering its predominantly Greek wealthy clientele a “very personalised experience”, comparable to that offered by bigger competitors in Europe. 

“In the Greek landscape, competition is not that fierce, so the challenge here is to retain our leadership position and expand our market share even further,” says Mr Tsourinakis.

Improving the customer experience, including “a massive digitalisation push”, is a key area of focus for the future. The bank also wants to further leverage its Luxembourg platform, which is “unique amongst Greek peers”, and increase its breadth of products and services to meet client needs.

Its biggest source of revenue and profit is today represented by annuity income from sources such as interest income, advisory, fund management and discretionary portfolio fees.

“We have developed these types of revenue streams very meticulously over the past several years in order to minimise our reliance on volatile, one-off income that comes from trading or sales of over-the-counter products in primary markets. We anticipate this trend will continue in the future.” ET

Best Private Bank in Croatia
Zagrebačka banka - Unicredit

UniCredit CEE Private Banking, part of Italy’s UniCredit banking group, has long had a strong presence in Central and Eastern Europe, but has built further on that in the past few years. It has, indeed, even accelerated this growth recently: in 2014 it added $900m in net new money, but in 2015 this tipped over the $1bn mark to reach $1.2bn. In the same year it acquired 1370 net new clients in the region, but in the first four months of 2016 it had already nearly equalled that, taking on 1303. Jan Tronicek, head of private banking for Central and Eastern Europe, attributes this surge to a combination of one-off pushes in the Czech Republic and Slovakia, where the bank sought to offer private banking to existing retail customers, and ongoing initiatives throughout the region. 

Notwithstanding these initiatives, within CEE the private bank is perhaps most entrenched in Croatia, where Zagrebačka banka, which is owned by the UniCredit Group, holds about one-third of the market. Mr Tronicek credits its success in the country partly to a team that has been “stable for years with a lot of know-how and experience”. The team in Croatia, and elsewhere in the region, benefited from the CEE PB Academy, which trained 296 bankers in 2015, including both newcomers and senior professionals. 

Asked about the biggest challenges facing his customers, Mr Tronicek says: “There is a lot of political risk around. But on the other hand, for most of the region, this is nothing new. I think our clients are used to this. 

“We want to lead our clients to disciplined investing and sufficient diversification. Our CEE private bankers play a pivotal role in this plan,” he adds. DT

Best Private Bank in Cyprus
Bank of Cyprus

The eastern Mediterranean island of Cyprus has enjoyed something of a transformation since its low point during the financial crisis of 2012 to 2013, when its then outsized banking sector suffered a hangover after focusing on attracting huge deposits from Russian clients.

The two largest Cypriot banks are now privately owned by western investors, with Bank of Cyprus overseeing assets worth $1.4bn for more than 2000, predominantly onshore, private clients. 

The bank’s management confesses that 2015 was a “challenging year”, working against a stigma of being the first country to bail in their depositors as part of an EU deal. Their main focus was to rebuild trust with clients and try to consolidate its position as what it calls “the leading financial institution in Cyprus”.

That said, new business is already in the bank’s sights, with an internal market of business introducers including accountants, lawyers and trust advisers, established in Cyprus now for many years. The bank has decided to invest time and resources in renewing these relationships, introducing business referral agreements to provide incentives for intermediaries prepared to direct funds in its direction.

Building on its traditional model of providing banking services coupled with investment advice to its wealthy clientele, Bank of Cyprus plans to increase the importance of asset management services to its business model, in a bid to enhance fee income. This involves education of not just clients, but also staff on benefits of asset allocation and portfolio diversification.

External consultants have also been hired to improve technological infrastructure, installing a new Customer Relationship Management system for the bank. YB