An economic rebound fills the coffers of Europe’s winners.
Many private banks across Western Europe have bounced back from the Covid-19 financial crisis that hit in March 2020. Rising markets helped swell assets under management and attracted clients in record numbers back into risk asset strategies. Most European private banks reported bumper profits on the back of strong net inflows and new lending opportunities.
However, the near-existential crisis that hit one of the continent’s largest wealth managers, Credit Suisse, due to deficient risk management, has served as a warning to other private banks with exposures to extremely wealthy but highly leveraged individuals and family offices. Some banks have made a strategic withdrawal, while others have sought to fill the gap with supposedly better risk controls and more-carefully structured products.
Client desire for diverse investment strategies led to the growing popularity of vehicles that provide exposure to private equity and alternative assets. And as concerns over climate change rise, Europe’s private banks have responded with commitments to reduce their carbon footprint and the launching of an array of funds and investment strategies focused on environmental, social and governance (ESG) concerns.
The shift toward distance banking accelerated sharply due to the pandemic, and that has been true even in the private banking industry, where personal relationships are so important. The trend has ushered in a new wave of bespoke platforms, video links and user-friendly apps that enable the client and the relationship manager to monitor and manage complex asset portfolios and commitments.
BEST PRIVATE BANK IN WESTERN EUROPE
It is in digitalization that our Best Private Bank in Western Europe, BNP Paribas, outstrips the competition. Its private banking and wealth management divisions have benefited from the parent bank’s long-term investment in digital transformation, but it is precisely in the way these tools have been adapted to facilitate digital engagement between the client and the relationship manager that BNP Paribas excels—whether that be in real-time portfolio monitoring, advising on the evolution of investment strategies or identifying new products aligned closely with the client’s specific needs.
Nonetheless, effective digital capacity is only part of the equation. The French lender established a wealth management university in 2017 to train private bankers how best to reach out and service its high-net-worth clients, making for a winning combination of personal and technological expertise.
BNP Paribas is Global Finance’s country winner for both France and Belgium, and it is a leading player on the Iberian Peninsula and in some Eastern European markets. It has seen strong net asset inflows over the past year and a sharp rise in profitability.
BEST PRIVATE BANK FOR SUSTAINABLE INVESTING
Global Finance’s Best Private Bank for Sustainable Investing is Liechtenstein-based LGT, whose majority owners are the principality’s ruling family. LGT has been a pioneer in sustainable impact investing and has an 18-year track record of embedding ESG priorities in its investment programs. In 2008, the bank aligned itself with the UN’s Principles for Responsible Investment. In 2009, it launched sustainable equity and bond funds.
More recently, the bank has integrated direct impact investing activities into Lightrock. This global private equity partnership aims to combine financial with societal and environmental opportunities for private banking clients. The launch of its Lightrock Evergreen Fund raised more than $900 million from investors seeking to achieve market-oriented returns while having sustainable social and environmental impacts over the long term.
Already a member of the UN Net-Zero Banking Alliance, LGT has committed to an even more ambitious policy of reducing emissions from its investments and operations to net-zero by 2030.
MOST INNOVATIVE PRIVATE BANK
Spain’s largest retail lender, CaixaBank, is renowned for developing one of the world’s most digitally proficient operations across the board. This year, Global Finance’s award for Most Innovative Private Bank in Western Europe goes to CaixaBank. The basis for this is the success of the bank’s digital transformation strategy, which has been as much a cultural as a technological achievement.
The practical result is an omnichannel customer service model, which the bank calls “human technology,” since it brings together the skills and experience of some 600 specialist advisers spread around 56 centers of excellence through a resilient and user-friendly network.
The bank also provides purely online services such as its Smart Money robo-adviser and Ocean fund-management platform. At the same time and at the other end of the spectrum, it has become a global leader in artificial intelligence and big data analysis.