Private Banking CEE survey results

470 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
470
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
12
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Private Banking CEE survey results

  1. 1. Private Banking CEE survey results Introduction In continuation of its pioneering tradition, Terrapinn recently launched its Private Banking CEE survey in nd anticipation of its 2 annual event, Private Banking CEE 2007. We received an enormous response from private and retail banks, family offices, asset managers, investment banks, IFAs, brokers, etc., whose answers are summarised below. Who responded? Private Banks based in CEE 9% CEE Retail Banks 5% Private Banks based in Western Europe 20% Family Offices 3% Investment Management Companies 22% Investment Banks 9% Independent Financial Advisors 8% Brokerage Firms 3% Law Firms 21% Private & Retail Banks and Family Offices Summary (please see full results below) • Given the nascent nature of the private banking industry in the region, it is no surprise that the number of CEE based private banks is still relatively small. The composition of respondents is also indicative of the fast growing interest in the CEE wealth markets amongst Western private banks (20% of all respondents). • Of the 51% who said they currently do not operate in the region over 40% stated that they are planning to enter the CEE markets in the next two years. • While such countries as the Czech Republic, Hungary, Poland, Ukraine, the Baltics, Kazakhstan and Turkey are top of the league in terms of the levels of private banking activity, Russia is clearly in the lead. Moreover, respondents overwhelmingly named it as the country with the highest growth potential (77%). • It is hardly surprising that in an attempt to win the ongoing battle between offshore and onshore, the majority of private banks are currently offering both kinds of services to their clients (69%). • High net worth individuals are clearly the main market segment most private banks provide services to and this trend will continue into the future. However, today’s mass affluent and even retail clients are seen by many as the HNWIs of tomorrow. A quarter of all respondents have stated that the mass affluent segment will experience the highest growth in the next two years. • In terms of market entry strategies, the general consensus is that setting up a representative office in the region is the best way to establish presence in the region (48%). The remaining votes
  2. 2. are equally divided between ‘suitcase banking’, developing agent networks and acquiring a local bank (18% each). • Interestingly, cultural and psychological aspects have been named as the biggest barrier to the development of private banking in the region (54%), followed by legal issues (42%). • Quality and flexibility of services are undoubtedly seen as the key success factor by the vast majority of respondents (58%), with the bank’s reputation being the second largest driver of success (27%). • In this context it is not surprising that half of all respondents have identified educating and training relationship managers as a business area in most need of further improvement. • Total return strategies are predicted to enjoy the highest growth in clients’ demand (42%) with cash accounts rapidly becoming a thing of the past and giving way to structured products and other alternatives. Investment funds however will remain the most popular products in 2007 - 2008. Are you active in any of the CEE countries at the moment? Yes 49% No 51% Are you planning to enter the CEE markets in the next two years? Yes 42% No 58% What aspects of CEE wealth markets and private banking are of most interest to you? Changes in regulatory environment Fast growing economies and fortunes Increasing capacity in generating wealth Which CEE countries are you currently present in? The Baltics 24% Belarus 9% Bulgaria 18% Croatia 18% Czech Republic 38% Hungary 32% Kazakhstan 15% Poland 32% Romania 24% Russia 56% Serbia 12% Turkey 35% Ukraine 35% Other 18% (Slovakia, Slovenia, Bosnia & Herzegovina, Montenegro, Uzbekistan) Where do you see most growth in private wealth over the next few years? The Baltics 7% Belarus 3% Bulgaria 13%
  3. 3. Croatia 7% Czech Republic 13% Hungary 13% Kazakhstan 27% Poland 27% Romania 23% Russia 77% Serbia 10% Turkey 40% Ukraine 40% Other 3% What type of services are you currently offering to your clients? Onshore 14% Offshore 17% Both 69% In terms of market segmentation, which category does the majority of your clients fall into? Ultra high net worth individuals 14% High net worth individuals 55% Mass affluent 18% Retail 10% Other (please specify) 3% Which market segment in your opinion will experience the highest growth in the next two years? Ultra high net worth individuals 11% High net worth individuals 39% Mass affluent 25% Retail 21% Other (please specify) 4% What in your opinion is the best way to access the CEE markets? Managing your activities from the head office/ European office 17% Setting up a representative office in the region 48% Developing agent networks 17% Acquiring a local bank 17% What are the main barriers to the development of the private banking business in the region? Legal framework 42% Taxation 12% Cultural/psychological aspects 54% Cross-border issues 19% Fees/service pricing 8% Custody 15% Quality of service 27% Back office operations 15% Other 19% (Finding qualified personnel) What do you see as the single key factor for succeeding in this region?
  4. 4. Quality and flexibility of services 58% Branding/bank's reputation 27% Investment performance 12% Range of investment products 3% Where do you see the highest growth in your clients' demand? Total return 42% Tax optimization 4% Succession planning 8% Comprehensive range of services 35% Large variety of products 8% Other 3% (Structuring capabilities) What is the most popular product amongst your clients at present? Cash accounts 16% Investment funds (equity, fixed income, etc.) 36% Hedge funds 12% Structured products 8% Real estate 20% Commodities 0% Private equity 8% Art 0% What will be the fastest growing product area in 2007 - 2008? Cash accounts 8% Investment funds (equity, fixed income, etc.) 32% Hedge funds 12% Structured products 24% Real estate 12% Commodities 0% Private equity 12% Art 0% Which area of your business is in most need of further improvement? Open architecture 4% Lifestyle management services 8% Better educated and trained relationship managers 50% Efficient metrics to measure customer satisfaction 17% Employee retention 9% IT functionality 8% Other 4% (Product platforms) Product & Services Providers (Asset Managers, Investment Banks, Brokers, Law Firms, etc.) Summary (please see full results below) • Of those who responded to the survey, the majority (40%) named institutional investors as their main client base while private and retail banks based in the CEE region constitute a pronounced minority at present (4% and 8% respectively).
  5. 5. • Their presence in the CEE markets follows a similar pattern to that of private and retail banks: just under a half of all respondents are currently active in the region. Yet again, Russia is in the lead as the most popular destination at present and is likely to remain the key target market over the next few years. • With regard to market segmentation, the majority of product and services providers also see high net worth individuals as top growth segment while their confidence in the growth potential of mass affluent and retail clients is considerably lower than that of private and retail banks. • Their perception of major challenges is more comparable and also includes the cultural and psychological aspects and legal framework, albeit in reverse order and with less emphasis on the former. • Surprisingly, open architecture appears to be of least significance for succeeding in the region for all market players, private bankers and product & services providers alike (4%). On the other hand, the quality of products and services is seen as the main success factor (45%) followed by closer relationships with local private and retail banks (21%). • Although the general consensus is that equity and fixed income investment funds are the most popular form of investment at present (which concurs with the viewpoint of private banks), structured products, as well as alternative asset classes such as real estate, private equity and funds of hedge funds are seen as gaining momentum. Who are your main clients at present? Private Banks based in CEE 4% Private Banks based in Western Europe 14% Retail Banks based in CEE 8% Family Offices 9% Institutional investors 40% Other 25% (HNWI, UHNWI, private investors) Are you active in any of the CEE countries at the moment? Yes 47% No 53% Which CEE countries are you currently present in? The Baltics 20% Belarus 9% Bulgaria 9% Croatia 14% Czech Republic 40% Hungary 46% Kazakhstan 20% Poland 51% Romania 29% Russia 57% Serbia 14% Turkey 46% Ukraine 20% Where do you see most growth in private wealth over the next few years? The Baltics 29% Belarus 4% Bulgaria 19%
  6. 6. Croatia 6% Czech Republic 35% Hungary 23% Kazakhstan 17% Poland 44% Romania 14% Russia 67% Serbia 14% Turkey 48% Ukraine 17% Which market segment in your opinion will experience the highest growth in the next two years? Ultra high net worth individuals 20% High net worth individuals 51% Mass affluent 17% Retail 12% What are the main barriers to the development of the private banking business in the region? Legal framework 42% Taxation 4% Cultural/psychological aspects 23% Cross-border issues 4% Product pricing 4% Custody 15% Quality of service 17% Back office operations 6% What do you see as the single key factor which would help you to succeed in the CEE private banking markets? The quality of your products/ services 45% Product/service range 13% Closer relationships with local private/ retail banks 21% Your brand/reputation 17% Open architecture 4% What are the most popular products/services amongst your CEE clients at present? Investment funds Mutual funds Fund of hedge funds VAR funds Equity linked structured products Guaranteed products in EUR Brokerage European equities Emerging markets equities Real estate Discretionary investment management services Tax advisory Global open architecture product offerings What will be the fastest growing product/service areas in 2007 - 2008?
  7. 7. Capital guaranteed products Credit linked structured products Development of real estate projects Fund of hedge funds European equities and emerging markets equities Funds based employee loyalty bonus investment programs Order management systems Total return products Fiduciary management Want to know more? 2nd annual Private Banking CEE 2007 is the most authoritative and up-to-date source of information on the developments in the fast changing world of CEE private wealth. It is your best opportunity to… • discover how the CEE markets are growing and behaving • learn how legislative and regulatory issues vary from country to country • understand how to acquire and retain HNWI clients in the region • meet all the major players under one roof and find out what their business models are In 2006, we welcomed over 100 participants to the inaugural conference. We expect that everyone with an interest in benefiting from these exciting market opportunities will attend in 2007. And you?.. Click here to find out more about Private Banking CEE 2007 or visit http://www.terrapinn.com/2007/pbcee

×