PRIVATE BANKING THE POTENTIAL On the Verge of MARKET Private banking assets under a new Recovery? management amounted to less than half of the wealth of families The leader by Aum, Intesa PB, posted a 51% increase in profits this year and with more than 0.5 in financial € 4 bn of new money, while the assets on the market grew 8% on average, assets on hold and half a dozen of specialists in the double digits. Is the crisis over or is it the confirmation of a negative trend where the best performer takes all? by Francesca Vercesi Source: AIPB as of November 2012 n the wealthy provinces of Reggio Emilia and Modena, Ithe mechanical excellence of Ferrari and Ducati can be found alongside the best traditional Top 5 players by AuM growth year on year) in the of one advisory guru. A look at Italian food, such as Parmigiano- grimmest 12 months of the market’s big numbers reveals Reggiano cheese and Balsamic 1-yr Ch (%) Aum 30-6-12 the last few years the that this rather scathing verdict is vinegar. In this same area, the 1 BP Emilia Romagna 89.2 4,729 increase was a gift (+€ not too far wide of the mark. Of 2 Banca Generali 47.9 10,500 homey private banking of Banca 1.5 bn in 2012) from a the 606,000 Italian families with 3 Banca Leonardo 40.5 4,600 Popolare dell’Emilia Romagna 4 BNL BNP Paribas 18.9 20,799 network of promoters over € 500,000 in financial assets reigns supreme. It has led the 5 Credit Suisse 14.8 15,500 who have been put (a number that has remained way this year, with its assets under pressure by reasonably stable in the last five almost doubling in the wealth 3-yr Ch (%) Aum 30-6-12 the CEO of the bank years), only 8% have entrusted management segment (+89%). 1 Banca Profilo 271.3 3,442 Piermario Motta private banking organizations This is an astounding percentage 2 Banca Intermobiliare 170.8 11,288 and his managers with all of their money according in a flat market and it is only partly 3 Mediolanum 113.1 5,345 in charge Stefano to a survey conducted in recent 4 Credit Suisse 74.2 15,500 Grassi and Bruno months by Prometeia and 5 BNL BNP Paribas 65.1 20,799 Manera. “Frequent the Italian Private Banking Source Lombard data - Amt € mn and constant contact Association (AIPB), which brings with clients” was the explanation together Italian and foreign explained by the fact that its stock given by Manera for the success. banks and boutiques that provide is still small (€ 4.7 bn). “We changed The 260 private bankers (or services of this kind. However, the perimeters and included all of financial promoters) in his perhaps the most interesting piece the assets of wealth management distribution network sell protected of information is that in a potential clients, including the money in capital insurance policies from market worth nearly € 900 bn their current accounts. We also the parent company Generali. (the total assets of families with expanded the service to take in Banca Leonardo, Credit Suisse more than € 500,000), less than all of the banks in the group,” and BNL BNP Paribas, the PB half (graph above) is managed by came the honest admission from players completing the top five private banking organizations. In Maurizio Morgillo, the manager of the year, have hugely different in charge of private banking at BP business models. Their success Emilia Romagna, whose margin in 2012 effectively underlines of € 23 mn on 31 December last the anomaly – seen in statistical year amounted to just 5 bps of surveys as well – of the market in its AUM. For Banca Generali, Italy, where “real private banking Illustration by G. Scarabottolo the second best performer (+47% does not yet exist”, in the words 48 • L O M B A R D • • L O M B A R D • 49 PRIVATE BANKING Major players and a breakdown of AuM growth in the last 6 years (€ mn) Pos Bank of which of which AuM ch (%) provide financing for family busi- AuM managed AuM managed CAGR 2012 2011 2010 Sh (%) sh (%) 30.06.10 30.06.09 30.06.06 1-yr 3-yr 6-yr nesses that can no longer be ob- 30-6-12 funds 30-6-12 funds (06-12) tained from the credit system like 1 1 1 Intesa Sanpaolo 73,000 na - 75,000 32,000 42.7 73,000 65,000 83,367 -2.7 12.3 -12.4 -2.19 in the past. 2 2 2 Unicredit 69,306 26,200 37.8 70,837 27,205 38.4 69,100 65,000 36,033 -2.2 6.6 92.3 11.52 Reductions in performance-relat- 3 3 3 Ubi Banca 35,000 na - 37,000 13,200 35.7 36,900 36,500 20,702 -5.4 -4.1 69.1 9.15 4 4 4 Banca Fideuram 31,900 22,100 69.3 32,000 22,000 68.8 30,000 26,000 20,100 -0.3 22.7 58.7 8.00 ed pay, bonuses and banker ben- 5 5 5 Banca Aletti 24,900 12,200 49.0 25,700 12,800 49.8 26,500 23,566 20,600 -3.1 5.7 20.9 3.21 efits, cuts to expenses for train- 6 6 7 UBS 24,500 na - 25,000 na na 24,182 15,100 13,000 -2.0 62.3 88.5 11.14 ing and representation, company 7 7 6 Montepaschi 22,476 9,572 42.6 24,200 10,100 41.7 24,211 21,807 18,191 -7.1 3.1 23.6 3.59 cars, travel, specialization courses 8 8 8 Bnl Bnp Paribas 20,799 8,428 40.5 17,500 7,700 44.0 16,200 12,600 11,000 18.9 65.1 89.1 11.20 and sponsorships were the first 9 9 9 Credit Suisse 15,500 na - 13,500 na na 13,000 8,900 8,309 14.8 74.2 86.5 10.95 reactions to the unkind environ- 10 10 10 Deutsche Bank Group 13,600 5,800 42.6 12,910 5,380 41.7 12,400 10,800 11,971 5.3 25.9 13.6 2.15 ment. But soon the operators be- 11 11 11 Credem 11,300 4,500 39.8 11,000 4,730 43.0 10,800 9,900 10,200 2.7 14.1 10.8 1.72 came aware that the key matter is 12 12 20 Banca Intermobiliare 11,288 6,109 54.1 11,000 4,000 36.4 4,661 4,168 5,602 2.6 170.8 101.5 12.39 putting the focus back on the qual- 13 16 12 Banca Generali 10,500 6,480 61.7 7,100 4,400 62.0 10,000 19,500 21,601 47.9 -46.2 -51.4 -11.33 ity of the service, adding value and 14 13 13 Banca Sella 10,300 na - 10,023 na - 9,334 7,294 6,518 2.8 41.2 58.0 7.92 15 14 16 Banca Esperia 9,400 3,800 40.4 9,000 4,000 44.4 7,100 8,580 8,500 4.4 9.6 10.6 1.69 investing in order to make the fees 16 18 17 Cariparma 7,600 2,800 36.8 6,785 na - 7,069 6,654 12.0 14.2 - - more substantial. The vast major- 17 15 19 Banca Euromobiliare 7,450 4,507 60.5 7,900 4,900 62.0 5,100 7,100 6,650 -5.7 4.9 12.0 1.91 18 17 14 Ersel 6,900 4,400 63.8 6,900 4,800 69.6 7,300 6,000 7,100 0.0 15.0 -2.8 -0.48 19 19 28 Mediolanum 5,345 na - 5,500 3,900 70.9 2,435 2,508 1,520 -2.8 113.1 251.6 23.32 The results of 20 20 15 Popolare di Vicenza 5,034 1,232 24.5 4,719 1,090 23.1 7,140 5,970 6,080 6.7 -15.7 -17.2 -3.10 21 27 24 BP Emilia Romagna 4,729 na - 2,500 1,479 59.2 2,850 na na 89.2 - - - private banks 23 23 22 Banca Leonardo 4,600 2,400 52.2 3,275 1,750 53.4 3,800 3,500 1,925 40.5 31.4 139.0 15.63 24 21 - BP Milano 4,200 na - 4,500 - - na 4,443 4,153 -6.7 -5.5 1.1 0.19 vary enormously. 24 24 29 Banca Profilo 3,442 1,235 35.9 3,195 1,277 40.0 2,183 927 2,300 7.7 271.3 49.7 6.95 25 - 18 Azimut 2,800 na - na - - 5,600 na na - - - - Approximately 10% 26 25 27 Albertini Syz 2,496 1,494 59.9 2,695 1,679 62.3 2,586 1,995 1,768 -7.4 25.1 41.2 5.92 27 26 25 Banca Akros 2,247 772 34.4 2,668 815 30.5 2,800 2,270 2,218 -15.8 -1.0 1.3 0.22 have suffered losses 28 30 26 Kairos 2,182 2,182 100.0 2,111 2,111 100.0 2,800 2,025 2,372 3.4 7.8 -8.0 -1.38 29 29 30 Banca Cesare Ponti 2,126 702 33.0 2,200 - - 1,600 na 970 -3.4 na 119.2 13.97 and there have - 22 23 Cassa Lombarda na - - 3,339 - - 3,373 2,850 2,200 - - 28 21 Banca Finnat Euramerica na - - 2,430 500 20.6 4,468 4,186 2,702 - been outflows at 31 31 CF Rothschild Italia na - - 1,100 - - 750 na na - Total 444,920 442,487 171,816 49.6 429,242 385,143 337,652 32% of them Source Lombard analysis on companie's data other words, there is huge scope suffering from interest rates the big five has remained steady medium organizations in the field The structural decrease in reve- ity of the CEOs working in Italy for expansion in the Italian private bordering on zero and investment over the years, despite ongoing come in the form of boutiques and nues is partly down to regulatory say they want to invest in growth banking market for anyone that banking has been made more issues with the transformation the private services of smaller action that seeks to introduce by implementing a distribution wants to stake a claim.