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December 2, 2009

Private banks: threats and opportunities abound

by Gill Montia

Story link: Private banks: threats and opportunities abound

Booz & Company has issued a report on the private banking sector which claims that London faces both significant threats and important opportunities as a global banking centre.

According to the management consultancy, income for UK private banks dropped by between 30% and 40% from 2007 to 2009, and changing tax regulations plus future tax uncertainty is unsettling high net worth individuals, some of whom are reconsidering London as their domicile.

At the same time, private clients are “demanding more from their private banks: particularly increased transparency and alignment of interests”.

However, the G20 scrutiny on offshore banking, combined with tax amnesties may lead UK high net worth individuals to actually repatriate funds to the UK.

In addition, London “remains a major centre for investment management talent”, the report states.

Booz & Company senior vice president, Alan Gemes, comments:
“Fundamental changes in the environment, both negative and positive, present an important opportunity for UK private banks to enhance their position.”

He adds: “Private banks that are able to align their value proposition to the changing needs of private clients, structurally change their cost base and address the onshore / declared offshore issue stand to gain the most.”

The findings of the report, entitled “Private Banking Beyond the Perfect Storm” are based on over 20 in-depth interviews with top managers from leading private banks in the UK including Credit Suisse, Deutsche Bank, Barclays Wealth, Coutts, Private Banking Lloyds, HSBC, SandAire, Pi Capital Group, Weatherbys Bank, Butterfield Private Bank and C. Hoare & Co.

The study was completed between February and June 2009.

 

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