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May 20, 2009updated 05 Jun 2017 11:40am

All to play for after industry shake-up

Eighteen months of ups and downs in the wealth management market has blown the race for PBIs Outstanding Global Private Bank award wide open William Cain looks at some of the contenders.The shake-up in the industry over the last 18 months has made Private Banker Internationals 2009 awards the most competitive for years with banks from across the wealth spectrum competing for the top prizes.The awards were dominated for a time by UBS, which claimed the Outstanding Private Bank prize for three years consecutively between 2004 and 2006

By William Cain

Eighteen months of ups and downs in the wealth management market has blown the race for PBI’s Outstanding Global Private Bank award wide open. And, with the awards deadline scheduled for the end of July, it’s time to get your nominations in. William Cain looks at some of the contenders.

The shake-up in the industry over the last 18 months has made Private Banker International’s 2009 awards the most competitive for years – with banks from across the wealth spectrum competing for the top prizes.

The awards were dominated for a time by UBS, which claimed the Outstanding Private Bank prize for three years consecutively between 2004 and 2006.

It was indisputably the dominant force in global wealth management, establishing itself as the only bank with top three market positions in North America, Europe and Asia-Pacific.

It also invested heavily in a strategic European onshore business, which eventually turned profitable in 2006.

But its grip on PBI’s top award has loosened more recently. Its stranglehold over the awards was broken first by Merrill Lynch, then the US’ largest wealth manager, in 2007, as it started to show a more international focus with its Global Private Client division. It beat off competition from HSBC Private Bank and Credit Suisse to win the top award.

Credit Suisse joined the winners’ circle in 2008, as its ability to stay out of trouble made it one of the favoured homes for client funds as the credit crisis unravelled. Of the three most recent winners, it looks the best placed to challenge again.

But there are many more contenders: Barclays Wealth is now established as a top-tier global wealth manager with its cut-price acquisition of Lehman Brothers’ investment banking and capital markets business.

HSBC Private Bank, run by Chris Meares, who was last year named PBI’s Outstanding Global Private Banker, has established itself as a safe harbour for funds during the financial crisis. It invested an estimated $10 million on a rebranding exercise this year, bringing its private banking brand into line with the rest of the group.

All have also avoided so far the need to take money from their respective governments, an achievement which singles them out from so many of their peers.

It should not be forgotten, either, that 2008 was the year UBS was finally deposed as the world’s largest wealth manager. Putting aside for a moment the sizeable problems the deal has created at Bank of America, the merger with Merrill Lynch created a market-leading franchise with $1.77 trillion in client assets, surpassing UBS’s $1.5 trillion.

BNP Paribas, having finally completed its acquisition of Fortis, is now seventh in PBI’s global league table of private banks, ranked by assets under management, up from ninth the year before.

Like HSBC, it benefited from a conservative business model and a flight to quality from worried clients at the height of the financial crisis.

With net client inflows of 7.8 percent in 2008, excluding its acquisition of Fortis, BNP Paribas was the best performing wealth manager among the world’s ten largest players. Close behind was Deutsche Bank, another potential contender, with inflows of 6.7 percent and Credit Suisse, with inflows of 5 percent.

JPMorgan, one of the US institutions considered to have weathered the financial crisis most strongly, moved from 11th to 8th in PBI’s global rankings, while Goldman Sachs, despite a shaky end to 2008, moved from 13th to 10th.

Another wealth manager to have notably expanded through acquisition is Morgan Stanley, which is set to become the world’s third-largest wealth manager once its acquisition of Citigroup’s Smith Barney is confirmed.

It has been a good year for mid-tier Swiss institutions, including Julius Baer and Pictet. Bank Sarasin, while probably too small to compete in the global category, had a particularly good year, having benefited from the AAA-ratings of its parent, the Dutch mutual Rabobank.

The awards categories this year also have a couple of new additions to the usual mix. Out have gone awards for alternative investments and best business bank. In their place, a new award for services to family offices has been introduced, in recognition of the increasing demand from single and multi-family offices to invest and have services provided by private banks.

In addition, three segmented Asia-Pacific awards have been introduced, in the ultra high net worth ($10 million+), high net worth ($1 million-$10 million) and mass affluent ($500,000-$1 million) categories.

This represents an opportunity for private banks operating within different niches in the region to compete with some of the bigger players.

 

PBI AWARDS

Award categories

The banks

• Outstanding Global Private Bank

• Outstanding Private Bank – Asia-Pacific

• Outstanding Private Bank – Europe

• Outstanding Private Bank – The Americas

• Outstanding Private Bank – Middle East

• Outstanding Private Bank for UHNW clients

• Outstanding Private Bank for HNW clients

• Outstanding Private Bank for the Mass Affluent

• Outstanding Wealth Manager – Customer Relationship Skills

• Outstanding Wealth Manager for Innovation of Products/Services

• Outstanding Trust Company

• Outstanding Private Bank for Family Office Services

• Most Exciting New Wealth Management Model

The bankers

• Outstanding Global Private Banker

• Outstanding Private Banker – Asia-Pacific

• Outstanding Young Private Banker

• The Editor’s Special Award

Outstanding Global Private Bank

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