Private banking confidence levels defy credit crunch and remain high
by Richard Kilner
KPMG International has conducted research which reveals that general levels of confidence in the financial sector remains strong across the globe, defying the market turbulence caused by the global credit crunch.
Asia and the Middle East are particularly confident, and the prospects for growth appear strongest in China, Russia, India and Eastern Europe.
Of those who participated in the survey, 93% said that they believed the financial sector would see increasing growth over the next three years.
A fifth of participants indicated they would invest over $1bn in acquisitions over the next three years, and almost half said they were actively looking for acquisitions.
Competition has decreased for smaller banks compared to recent years, lessening the need to search for partners.
The largest obstacle to M&A is seen as regulation.
Phil Knowles of the KPMG in the UAE has said that the need for private banking is being driven up in areas such as the Middle East by the changing distribution of wealth.
Knowles described private banking as a sector that the credit crunch seemingly forgot about, but added that a sustained fall in share prices would eventually have a knock-on effect, causing the private banking sector to suffer.
For the time being private banking has evaded the worst damage of the credit crunch.
Another interesting result of the survey is that the most important factor in one private bank’s success over another was seen as human resources. As established banks seek to expand into the Middle East the skills shortage of top class professionals has also risen.
Knowles has said that the success or failure of private banking is dependent almost entirely upon the quality of the staff they manage to recruit and retain.
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