All articles by PBI Editorial
PBI Editorial
BNP Paribas backs assault on Anglo-Dutch private banking
A new 10 billion ($15.56 billion) force in Anglo-Dutch wealth management is being created via a strategic partnership deal between BNP Paribas Private Bank and Dutch private bank and asset manager Insinger de Beaufort. Under the venture, BNP Paribas Private Bank will take a 35 percent stake in Insinger for 60 million and combine its London private banking activities with those of Insinger and Nachenius Tjeenk, the French groups Dutch private banking arm.
Holding on to the family fortune
A variation of the sad aphorism from riches to rags in three generations is found in nearly every major civilization and serves as a reminder of the fall of many of the worlds wealthiest family dynasties.Two thousand years ago in China the proverb fu bu guo san dai, or wealth never survives three generations, was born
Investors expecting hedge fund resurgence
Hedge fund investors remain confident in the ability of their portfolios to deliver strong returns in 2008 despite being extremely bearish on the outlook for the wider market. The findings of this years Deutsche Bank Alternative Investment Survey, which drew opinion from across funds of funds, family offices, high net worth individuals and other financial organisations, reflect current market uncertainty Some 80 percent of investors say they are bearish on the global economy in 2008, a sentiment borne out by the $16.5 billion in hedge fund inflows seen in Q1 the lowest such figure for four years. Yet investors nonetheless expect a median industry inflow of some $200 billion across 2008 as a whole Belief in the validity of their own strategies also remains high: investors predict a 7.5 percent return for the hedge fund industry in 2008, but a 10 percent return for their own portfolios, a median of survey responses indicates. The global outlook is little clearer for 2009, despite 40 percent of respondents believing that the economy will improve.
UBS expands ultra wealthy client ops
UBS is building up its Canadian KeyClient Wealth Group by increasing the number of advisers in line with what the bank said was strong demand for services among ultra high net worth clients in the country.It has now put in place eight KeyClient advisers in all of its offices in Vancouver, Calgary, Toronto and Montreal This is up from four previously.The KeyClient Group provides wealth management services to Canadians with investable assets of more than C$50 million ($49.7 million), focusing on the 3,000 Canadian families in the ultra wealthy category, the bank said.Despite the volatility in the markets, we have seen the Canadian economy generate a great deal of sustained wealth over the past ten years, UBS said in a statement.The global KeyClient initiative was launched by UBS in 2003 with the aim of delivering a consistent approach towards the wealthiest individuals and families around the world
Swiss Life unloads Gottardo
In a consolidation move in Swiss private banking, Swiss Life has sold Banca del Gottardo to BSI, the Swiss subsidiary of Italys Generali, for CHF1.875 billion ($1.67 billion) Gottardo and BSI, the areas two biggest private banks, both focus on wealthy north Italian clients and had already been pursuing shared back-office ventures to cut costs.Although Swiss Life had regularly denied rumours of a sale of Lugano-based Gottardo, it was known to be keen to divest the under-performing unit
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Mixed third-quarter results for US wealth managers
Amid the turbulence in financial markets, Morgan Stanleys Global Wealth Management division reported record levels of client inflows of nearly $15 billion in the third quarter of 2007 Despite the subprime crisis, Morgan Stanley delivered strong performances across many core businesses and achieved record results in our prime brokerage, derivatives and interest rate and currencies businesses, said John Mack, chairman and chief executive of the firm.Its Global Wealth Management division reported pre-tax profits of $287 million, a year-on-year rise of 78 percent Net revenues from the division were $1.7 billion, up 23 percent after stronger transactional revenues including higher revenues from underwriting activity, growth in fee-based products and higher net interest revenue from its deposit sweep programme.Total client assets were $734 billion, a 14 percent increase from last years third quarter
Suitors named for embattled Société Générale
Socit Gnrale (SocGen), beset by a huge rogue trading scandal, has been actively reassuring its private banking clients over the banks stability But its survival as an independent bank has been thrown into doubt after it lost 4.9 billion ($7.2 billion) in its equity derivatives meltdown. Merrill Lynch analysts have even gone as far as to suggest a potential tie-up, saying HSBC, Europes largest bank, could build revenue in emerging markets and investment banking by bidding for SocGen
Commerz, Dresdner form ?155bn force
A powerful new contender appears on the European wealth scene with the merger of Commerzbank and Dresdner Bank, a tie-up which should allow the two to compete more effectively against traditional German banking leader Deutsche Bank. Dresdner, including its London-based Kleinwort Benson arm, has 127 billion ($180 billion) of client assets under management while Commerz has 28 billion, as of end-2007. Their combined 155 billion makes them a top 15 global private banking player, but still remaining behind Deutsche Bank with its ranking as the 8th-largest global wealth manager with 195 billion. While Dresdner, owned up to now by insurer Allianz, has significantly more private banking business than Commerz, the latter is a major banker to small and medium-sized German Mittelstand companies potentially a significant source of private banking income. The two banks complement each other in the segment of high net worth individuals Dresdner Bank is very strong in this segment, Allianz said, in a statement announcing the merger. This will help the new bank minimise the gap to the market leader and establish its position as number two in Germany in this market. Dresdner Bank has recently invested heavily in boosting its national and international presence, an asset the new bank will benefit from. Kleinwort Benson, a long-standing UK banking brand, is likely to keep its name for the time being when it is absorbed in the merging group. Its chief executive Robert Taylor said he did not expect to have to cut jobs at his wealth management business, as Commerzbanks own operations are much smaller.
Death of Baer’s Widmer shocks industry
He is believed to have taken his own life, according to sources in Zurich, although Swiss police declined to comment on the death. A Baer spokesman stressed there was no link between the death of Widmer, whose wife died of cancer in 2005, and the Swiss private banks current activities.
Dare private banking take on American clients anymore?
The flight to quality from banks perceived as destabilised by the credit crisis, regulatory action against perceived tax havens like Liechtenstein and the US investigations into UBS, plus the new bear market which threatens to erode fee and commission profitability are among the new challenges for the wealth industry.For private banking in general, and Swiss private banking in particular, the attitude of the US towards the wealth business is shaping up to be the greatest imponderable of all.For the US seems to be rushing headlong towards the dubious prize of becoming the worlds highest-tax country, policed by draconian regulations and legal assaults at home and abroad.A hint of the American attitudes of tomorrow towards both domestic and foreign private banks may be provided by the way UBS is being pilloried by the Federal authorities.Few private banks with US clients looking at the latest Washington action a successful request to a federal judge in Miami to issue a summons forcing UBS to turn over information about US taxpayers who may be using Swiss bank accounts to evade income taxes will feel comfortable, even with a whiter-than-white client list.This unprecedented summons would be the first of its type by the US against a foreign bank.Client disclosure by UBS of potentially as many as 20,000 American clients will be a severe blow to the image of the bank, and the much-vaunted secrecy of Swiss private banking.The summons follows the guilty plea last month by a former UBS banker Bradley Birkenfeld to conspiring to defraud the Internal Revenue Service by assisting UBS clients in avoiding US reporting requirements on income in Swiss bank accounts, amid lurid tales of smuggling diamonds in a toothpaste tube.After the action against UBS, there would be little surprise if other wealth players came onto the US regulatory radar