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Private Banking Beyond the "Perfect Storm"

Publish Date: March 26, 2009
Author(s): Various Authors
Abstract: The Wealth Management industry is in the midst of a "perfect storm": Markets have devaluated, several of the largest wealth managers have vanished, and most have seen their market capitalization shrinking to a fraction of their valuation only 12 months ago. So far Switzerland's private banks have weathered the storm relatively well, and most traditional private banks and also the "Kantonalbanks" & "Regionalbanks" have benefited from "windfall" Net New Assets (NNAs), as clients have left the big banks in great numbers. However, the massive devaluation of the Assets under Management (AuM) base, paired with a significant reduction in profit margins, means that full 2008 results are still overstating the real situation, driven by a strong 1st half year 2008. The private banks must expect to lose an additional 25-30% of their FY'09 revenue pools if the market remains fragile. Furthermore, the regulators have only just started to reshape the rules of the game. In January and February 2009, Booz & Company interviewed more than 20 opinion leaders in Switzerland's private banking industry, to understand the scale of the pressure the industry is currently facing and to form a (still early) perspective on the industry beyond the "perfect storm".
Related Industries: Financial Services
Related Capabilities: Strategy & Leadership