Private Banking and Wealth Management Survey 2010: The old order changes

IN 2009 PRIVATE banking discovered that nothing is set in stone. Up to early 2008, it seemed that the leading players had solidified their positions for the long term. Who could have predicted such dramatic shifts in private banking? After all, winning market share has always been incredibly difficult. The industry had become saturated with hundreds of players fighting locally and regionally over incremental share of wallet. Only the largest could afford to increase assets via acquisition strategies, and so it had seemed that largest would equate to best, and so it would stay. And then the financial crisis hit. Suddenly assets described as sticky were anything but. Assets left private banks that had perceived investment banking risk – namely the large ones. Any private bank with links to Bernard Madoff also saw money fly out of the door. When governments began offering guarantees to their largest domestic banks, clients ran back to them, and then, when the dust began to settle slowly in the second quarter of 2009, clients began to look around and make rational decisions about which private bank they wanted a relationship with.

The landscape of the industry was completely changed in 2009 – and it is evident from the results of this year’s private banking poll. Positions that were beginning to look set in stone have dramatically changed. UBS, which had ranked as Euromoney’s best global private bank since the poll’s inception in 2004, is now placed third. Credit Suisse, which last year ranked fourth, is now first. Indeed, there are two new entrants to the top-10 global rankings. There are three new winners of overall regional rankings, and more than 35 new overall country winners.

In the mass-affluent and single-digit-million-dollar client range, HSBC has made further headway this year, ranking first globally in both sectors. JPMorgan has succeeded in its long-term bid to make itself the number one bank globally for the ultra-high-net-worth client. Although UBS has lost its best global private banking crown as investment banking woes and struggles with the US over banking secrecy affected its reputation, the Swiss bank still ranks top globally for its breadth of investment products and advisory services.

In specific investments, the French banks now dominate the global awards for structured products. Société Générale Private Bank and BNP Paribas Private Bank rank first and second respectively, and Citigroup Private Bank becomes the new top-ranking private bank globally for real estate investments. Regionally, the financial crisis shook up this year’s rankings. Credit Suisse has become the top private bank in western Europe, and there were two new entrants to the top 10 in the region – Julius Baer and Rothschild – indicating that clients have been relying on Swiss banks for security of assets.

In North America JPMorgan ranks as this year’s best private bank overall. Fear of long-term stability clearly affected last year’s winner, Citigroup, which drops this year to fourth place in North America. Canada’s banks have also had the opportunity to make inroads throughout north American wealth management because of their financial stability. RBC has substantially improved its position in the top 20 in all wealth segments, and Scotiabank, TD Bank, BMO Harris and CIBC feature heavily across the north America rankings that the large US banks and Swiss banks usually dominated in the past.

In Latin America there have been big changes, with 16 new regional winners of client and product categories appearing. Competition has diminished from UBS, which sold Pactual in Brazil last year. Citigroup retains its position as best private bank overall in the region, however, and Santander leaps up to second place from fifth last year and wins first place for super-affluent clients. HSBC ranks first again for clients with $1 million to $10 million, and JPMorgan, which has higher rankings across the region in several categories, ranks top for ultra-high-net-worth clients.

In Asia, HSBC remains the dominant private banking leader, although Goldman Sachs is top for ultra-high-net-worth individuals. UBS jumped to top positions in the categories of equity and fixed-income portfolio management.

HSBC also holds on to its position as best for private banking services in the Middle East, with Credit Suisse taking this year’s second place, from fourth last year. Samba Bank is the dramatic new entry into the top 10, ranking fourth in the region this year compared with 20th last year.