With public spending being cut, wealthy individuals are putting more of their philanthropic dollars to work through social-impact investing. Companies are being set up to provide advice and products, and the private banks need to get on board.

Despite internationalization, local is still considered best when it comes to private banking advice. To find out why, Euromoney spoke to two of the sector’s leading figures.

The Spanish bank began its systematic wealth-management strategy in Latin America in 2007. It has paid off handsomely in our latest survey. But other banks are pushing hard to beat it.

Local private banks in the Middle East are losing out as the region’s wealthy react to the Arab Spring.

While global and regional banks lead the results in Euromoney’s private banking survey for Central and Eastern Europe, local specialist wealth managers are rising up the ranks in many countries.

"Money flowing into Central and Eastern European markets has declined in the last quarter," says Andrej Zatko, private banking director and member of the board of directors at J&T Banka. "Investors are off mood and unwilling to take on high-risk investments."

Noble Bank goes for the no-nonsense approach to business in Poland to win clients. "When international banks become aware that a Polish high-net-worth individual exists, they hound him to invest with them. But that individual soon becomes disenchanted with the global banks and comes to us," says Maurycy Kühn, board member of Getin Noble Bank in Poland. "Although it’s hard to compete with the glitz of some of the bigger banks, we offer clients specific advice tailored to their needs, which global banks fail to do."

"We would like our clients to treat us as a consensus of innovation with conventionalism," says Vladimirs Ivanovs, head of private capital management of Citadele Bank and a board member of Citadele Asset Management.

Since 2008, the financial crisis has played in United Bankers’ favour, explains Jani Lehti, chief executive of United Bankers Asset Management. "As a result of the banking crises, customers often find foreign players suspect and prefer local names with good reputation and contacts they know," says Lehti. "Finnish private customers also consider local companies more trustworthy."

"Our money is not different from our competitors’. It’s how clients are handled which makes a difference," says Indrek Nuume, head of private and business banking and a member of the management board at LHV.

Botond Bilibók, chief executive of Concorde Asset Management, is more than ready to admit where his business is lacking: "Our portfolio management is professional and successful, comparable to companies that operate in Geneva, London and Frankfurt. However, we lack expertise when it comes to sales. We are looking for partners to help us in this respect."

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"When it comes to managing portfolios, Finasta holds around 50% of the market share in Lithuania," says Andrius Barštys, chief executive and chairman. "There is quite tough competition in the Baltics in private banking, especially among the Scandinavian banks, but their major weakness is the lack of attention to personal client needs," he says.

A European sovereign debt crisis, looming bank regulation, volatile markets – 2011 was a challenging year for those managing money for the world’s wealthiest individuals. The heads of nine of the largest global private banks discuss how they are navigating the turbulence and what they expect of 2012.

To be the best, firms need positions of strength in the US, Europe and emerging markets. Being big in only two regions is no longer enough.

Based on the results of this year’s Euromoney survey, Lebanon is one of the few markets in the Middle East where local private banks still compete effectively with their international rivals. While international banks such as HSBC and Credit Suisse lead the way in Bahrain, the UAE, Egypt and elsewhere, in Beirut the situation is far more mixed.

Barclays Wealth has reinvented itself in just five years. With the benefit of heavy investment, it has developed a unique model of interacting with clients – using behavioural finance. It is targeting only high-net-worth clients and expanding globally.

Government pursues key reforms; Strikes spur energy-sector shake-up

Private banking CEO roundtable participants

UBS isn’t doing too badly for a bank supposedly in the midst of a terminal crisis.

Some clear trends emerge from this year’s results. Notable among them is the leadership of local private banks in the key global battlegrounds of two of the fastest-growing markets. With global banks facing regulatory and business challenges, local specialist wealth managers are gaining ground in both developed and emerging markets.

Private banks are looking to help clients move away from the greed-is-good mentality.

The business is consolidating rapidly and survivors might enjoy rising market share and healthier margins.

When David Einhorn was sanctioned by the UK’s Financial Services Authority at the end of January he was described in one newspaper profile as “self-effacing”, which was an odd phrase for a hedge fund manager who relishes the spotlight, at least by the standards of the industry.

At long last, investment bankers are bowing to the inevitable. Four years after the crisis, the industry is undergoing a much-needed transformation, as banks exit businesses they simply cannot make a return on. Bank chiefs are struggling to adapt to the new rules of the game. It should lead to an era of greater specialization and further consolidation.

New strictures have breathed life into shadow banking – it now constitutes about a quarter of the global financial system – and regulators fear they have created a monster. But look closer and there's much more to this financial Frankenstein…

California’s economy likely to benefit

Euromoney reveals that certain markets and parts of investment banking are consolidating much faster than people realise, especially in fixed income, currency and commodities

Despite emerging markets being heralded as the beacon for growth, CEOs and global heads of private banking at the world’s largest firms tell Euromoney they are still expanding and seeking growth in the US and other developed markets

Euromoney takes a look at the unique reinvention of the wealth-management division of Barclays