(July 13 – 12:50 ET) – The Financial Times has released a survey on the state of global private banking.
The report looks at the changing world of private banking, with particular emphasis on the emergence of the nouveau riche and their different needs.
It notes that private banking has become newly competitive, with banks poaching one another’s clients. This once-genteel business is now the subject of intense bank attention and the gloves are coming off.
Switzerland remains the capital of the world’s offshore private banking industry, with about 33% of the market. UBS AG, the firm that launched a US$12 billion bid for U.S. brokerage PaineWebber Group Inc. yesterday, is ranked number one. “The biggest are the Swiss, but the best are the Americans,” Michael Lagopolous, head of private banking at Royal Bank of Canada, is quoted as saying.
The insurgence of American firms, such as Merrill Lynch, Chase Manhattan, J.P. Morgan and Citibank is responsible for the newly aggressive competition, with some help from European-based giants, HSBC, ABN Amro and Deutsche Bank.
Clients are also becoming more demanding the report says, noting that up to 8% of a private bank’s clients may switch banks in a given year, compared to a turnover rate of about 2% at the best private banks.
-IE Staff