All articles by PBI Editorial
PBI Editorial
Going into recession in good shape
This is still not keeping pace with the level of personal wealth creation in Britain, at least in the pre-credit crunch period.Investment assets controlled by wealth managers in the UK grew to £402 billion ($747 billion) by the end of 2007, up by 10 percent on the previous year, as buoyant first and second-quarter performance offset the dismal last half of the year as the credit crisis disrupted markets.The wealth industry, ranging from private banks to execution only brokers, generated revenues of £3.9 billion, up 16 percent, and pre-tax profits of £1 billion, up a healthy 28 percent, according to new analysis by wealth benchmarkers Compeer.Asset growth was helped by new business levels, accounting for 6.5 percent of asset growth compared to 3.5 percent of underlying performance growth among wealth managers
Foreign players make little headway
The rapid consolidation process in Italian financial services, which has produced two Italian banking champions in the shape of UniCredit and Intesa Sanpaolo, has also helped domestic players to increase their lead over foreign rivals in the countrys private banking market.A new survey by the Bologna-based consultancy Studio Magstat shows an expanding wealth management market in Italy could develop more quickly if the untapped potential of assets held by regional banks can be captured.Big bank mergers and acquisitions have revolutionised the banking sector and have had a knock-on effect on private banking too, Marci Mazzoni, chairman of Magstat Consulting says There has been an increasing concentration of assets among the biggest domestic banks as a result.According to Magstat, Italys private banking market grew by 9.9 percent in 2006 to a total of 532 billion ($734 billion) of assets.Four powerful groups have emerged from the banking consolidation process, which is reflected in enhanced private banking rankings
The Feds get tough on UBS
Birkenfield has alleged UBS helped wealthy Americans conceal $20 billion in assets and evade income tax.Officials in the Justice Departments tax division said in a statement that the US has been working co-operatively with UBS and the Swiss government to obtain the account information, but would seek enforcement if these negotiations were not successful.A UBS spokeswoman said the bank is working diligently with both Swiss and US government authorities.Tax experts believe that the involvement of the Swiss government and court action makes it virtually inevitable that UBS will accede to US demands for client disclosures, albeit in some agreed restricted formula
Private banks weathering the storm
The initial set of first-quarter results show the worlds leading private banks have emerged largely unscathed from the doom and gloom that has characterised 2008 thus far, though UBS remains an unsteady beacon at the top of the pile.Though UBS does not report until 6 May, asset write-downs of $37.5 billion have severely damaged the banks reputation, not least in its home market Yet write-downs are still stealing the headlines at UBSs competitors leading to many CEOs pointing to their private banking divisions as a source of strength.Merrill Lynch took a $6.5 billion hit on subprime and other assets but saw net inflows of $4 billion in its wealth management division, boosting net revenues by 8 percent to $3.6 billion.Similarly, Credit Suisse reported a CHF2.1 billion ($2.03 billion) net loss and CHF5.3 billion in net write-downs for the first quarter, but its wealth unit nonetheless saw net inflows of 13.5 billion over the same period
Wealth managers are the new superstars
While investment banking sell-side hiring has ground to a virtual standstill in the wake of the subprime implosion, asset and wealth management firms are now driving the demand for talent for the first time in memory, analysis shows.A survey by executive search company Russell Reynolds Associates found that demand for chief investment offices across the industry is now off the charts.The fevered search for wealth specialists comes as companies expand to meet expected growth opportunities posed by baby-boomer retirement in the US and, more generally, the globalisation of markets.This has been an historic year in the asset and wealth management industry, said Cornelia Kiley, an MD in Reynolds Associates Asset and Wealth Management Practice
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JPMorgan shows its clout and class
The US bank is ranked as the UKs fourth-largest private client asset management firm, with £22.9 billion ($46 billion) in assets under management (AuM) as of the end of 2006, the latest edition of the Private Asset Manager-PAM yearbook shows.JPMorgan is disclosing its assets total to PAM, which tracks the domestic UK wealth sector, for the first time The £22.9 billion total compares with its £19.2 billion of AuM at the end of 2005 and £16.6 billion at the end of 2004.Although the US bank hasnt elaborated on the mix of clients holding these assets, experts say the total, as with a number of other banks, includes a proportion of non-domiciled residents wealth
HMRC proposes new offshore inquiry
The UKs tax agency, HM Revenue & Customs, has written to some 170 private banks, brokerages and building societies with proposals for investigating offshore accounts held with them by UK residents.This fresh initiative follows a disappointing outcome to the UKs offshore disclosure facility, essentially a tax amnesty, conducted earlier this year
Barclays, HSBC and Credit Suisse joust for top honour
Barclays Wealth, Credit Suisse and HSBC Private Bank are the short-listed contenders for the key Private Banker International 2008 award: The Outstanding Global Private Bank for 2008.
Swiss private bank, US hedge firm merge
The two jointly will have more than $18 billion of assets under management in wealth management. Clients of Connecticut-based Fairfield will have access to wealth services offered by BBH, while the latters clients will have access to Fairfields hedge funds, funds of hedge funds, real estate funds and other products, the companies said. The two said their immediate aim is to increase the number of their private clients and to accelerate the growth of the private bank by enhancing its marketing and sales capabilities and adding to its personnel.
Asia’s family office numbers set to increase at double-digit pace
Private banks are well placed to benefit from double-digit growth in the Asian family office market in the coming years, according to a VP Bank survey. The number of formalised single family offices in Asia is likely to increase from 20 to around 250 by 2015, according to the study, carried out by Liechtenstein-based VP Bank and University of St Gallen, Switzerland.