Private Banking Priorities Shift In Uncertain Times

by Carla Johnson, Investors Offshore.com

08 November 2001

Priorities in the private banking industry are changing in response to the current economic uncertainty, according to investment experts.

The co-author of a recent Boston Consulting Group report on the private banking industry, Christian de Juniac, revealed that as a result of close links between private banking and equity market performance over recent years, many banks, both large and small, are in for a tough ride. However, Mr de Juniac believes that it is the smaller contenders that will suffer the most, having aggressively expanded in the boom period, before they had sufficient assets under management: 'The problem is that many of these smaller private banks were barely profitable even before the downturn,' he explained.

Larger multinational organisations are also hurting, but in the main their pockets are deep enough to withstand the current crisis, and they are able to redirect their efforts into channels more in tune with current sentiment. 'We have a dramatic downturn in both turnover and transaction volumes,' observed Arthur Decurtains, director of private banking in Asia for the UBS Group. 'But we are also seeing a return to more reasonable expectations from clients about what we can do.'

Worldwide, the emphasis in private banking appears to be shifting from the wealth accumulation mindset of the late 1990s, towards wealth management and transfer. 'Private banking is going to shift back to its main principles,' Credit Suisse Private Banking's North Asia chief executive, Thomas Meier told a roundtable meeting hosted by FinanceAsia. 'People will look again at trust, at institutional strength and asset preservation.'

Recommended