All articles by PBI Editorial
PBI Editorial
UBS takeover approach could loom
The stock price of the battered UBS has plummeted to levels where an opportunistic acquisition approach by a rival is becoming conceivable, say senior private bankers.The shares of UBS, the European bank hardest hit by the collapse of the subprime mortgage market in the US, started sliding after its admission that it may face more losses from mortgage securities That leaves the shrunken UBS valued at about CHF60 billion or E37 billion ($57 billion). This is a level which is within the scope of an increasingly wide range of banks attracted by the chances of acquiring the worlds biggest wealth manager on the cheap, as long as they have the resources to be able to underpin the strained UBS balance-sheet, say bankers.
HSBC takes the honours
HSBC is brand leader in wealth management, emerging as the private bank with the highest level of familiarity among high-earning individuals in the leading OECD nations, new research shows But Citigroup still commands huge global awareness.In a special ranking of private banking brands, HSBC Private Bank just pipped Merrill Lynch and Citigroup, according to Ledbury Research, a specialist wealth management consultancy JPMorgan and BNP Paribas also scored higher than average (see chart below).The Ledbury ranking was conducted among high earners with income of more than $200,000 in the US, UK, Japan, Germany and France
The customers get jumpier
This helped drive down overall satisfaction in the UK-based private banking industry last year. Overall client satisfaction in wealth managers last year fell to a five-year low, marking the second successive year of decline, according to research by MDRC, a consultancy that tracks how clients perceive their advisers The average satisfaction index score was 59.8, just below the good rating benchmark of 60.0 and the worst level since 2008.
Morgan Stanley seeks rich price for Spanish wealth unit
This time it is selling its private banking operations in Spain and asking an aggressive premium for them.The US investment banks wealth business in Spain has assets under management (AuM) estimated to be as high as 8 billion ($10.2 billion) The company is believed to be pressing for 500 million to 600 million for the business or a premium to AuM of roughly 7 percent.At the start of 2007, Morgan Stanley sold its Quilter private client brokerage unit in the UK to Citigroup
Memoirs of a private banking pioneer
Memoirs of a private banking pioneerWarwick Newbury, chairman of SG Hambros Bank, has spent more than 40 years in banking, all of them in wealth management In this article, he takes an expert look at the markets phenomenal growth.My career, I am happy to say, has covered the formative years which have seen such dramatic change and growth in private banking, particularly over the past two decades
Subscribe to our Newsletter
Get industry leading news, data and analysis delivered to your inbox
Getting inside the client’s head
Behavioural finance is coming to the fore as a technique to understand and cope with irrational actions by clients that often lead to a clash with their advisers.One of the toughest tasks for a private banker adviser is to understand the basic psychological drivers of clients, beyond their apparent rational personal investment and planning requirements Often decisions are taken by the client that are irrational, leading to tensions with the adviser who fails to get inside the head of the customer.One classic example is that clients often go to great lengths to justify previous investment decisions, especially losing ones, as many wealth management professionals will have noted
Credit Suisse to hire 1,000 advisers
Credit Suisse, setting an initiative seen aimed at closing the gap on its bigger rival, the troubled UBS, has outlined aggressive plans to grow its global wealth management business this year and beyond.It plans to add about 1,000 new private bankers by 2010, taking the total to 4,100, Credit Suisse private banking CEO Walter Berchtold disclosed.Medium-term targets for wealth management include a pre-tax income margin of 40 percent and growth of net new money of 6 percent, driven by further growth of Credit Suisses One Bank investment-private banking strategy as well as its targeting of ultra-high net worth clients.Although not directly mentioning UBSs huge losses related to US subprime mortgage exposures, Berchtold declared in an investor presentation that Credit Suisse is well positioned to excel in the current market conditions with a strong balance sheet.The bank has largely escaped the subprime debacle that has seriously impacted on its big private banking rivals, such as UBS, Citigroup and Merrill Lynch.UBS big brotherUBS historically has been significantly larger than Credit Suisse in terms of wealth management clout
Russia to lead the pack
But the region, and Russia, still represent an attractive wealth management market.While the drivers of individual wealth in the Central and Eastern European (CEE) region remain positive over the next 18 to 24 months, the outlook for high net worth growth is becoming less certain, according to new research by business consultancy Market-Dynamics Research and Consulting (MDRC). These economies have generated very high rates of HNW growth since eight states joined the EU in 2004, followed by two in 2007 In that period, the increase in HNW numbers and assets have been driven by high levels of GDP growth, the free availability of credit, development of the local real estate and, most importantly, liberalisation of their previously restricted local markets.Separate research from Boston Consulting Group (BCG) calculates that wealth management as a percentage of total banking revenues in the CEE is twice as high as the global average of 12 percent
Mega-wealthy see their net worth slashed
Billionaire high net worth individuals worldwide are being destroyed at unprecedented rates by the collapse of financing markets and the plunging values of their business interests.US magazine Forbes, which compiles annual rich lists, has just recalculated its ranking for 400 of the wealthiest Americans and reports that 17 billionaires have lost more than $1 billion in the past month.As a result, business guru Warren Buffett is again the wealthiest American, replacing Microsofts Bill Gates
Pioneering private banking, the Oz way
For an affluent country with the worlds fourth-largest wealth management sector, Australia has a surprisingly undeveloped private banking industry But that hasnt stopped local and international banks from trying their luck in the Australian market, and attempting to use it as a base for operations in Asia.