The private banking customer portfolio of HVB Tiriac doubled last year, reaching an asset volume worth 540 million RON (almost 160 million euros), according to the data published in Bucharest, which take into account a minimum asset threshold of 100,000 euros per customer. The threshold is applied by most domestic banks providing private banking services, but in the West, this is as high as several hundred thousand euros and even one million euros.
However, Bank Austria, supervising the Romanian operations of UniCredit group, took into account a minimum threshold of 500,000 euros for the private banking customer class, applying the UniCredit standard.
This is why the assets managed by the private banking department of HVB Tiriac are put at only 45 million euros in 2006 in the annual report published last week, against the 83 million euros included in the 2005 report. Yet, Bank Austria points to a 48% customer base increase.
The private banking department of HVB Tiriac was set up more than three years ago.
In late 2005, Liliana Damianov, who had launched these operations, left the bank to create a similar department within Bancpost, controlled by EFG Eurobank Greek group. This category of services develops on close banker-customer ties, with confidence being a vital element in the building of a long-term relationship. In fact, the banks' private banking offers are not that different from each other, especially in terms of investment alternatives, with the difference being made by elements related to services quality, such as confidentiality, accessibility, promptitude.
Amid the merger between HVB Tiriac and UniCredit Romania, in the wake of the process that is unfolding at a continental level, all the banks part of the group, including the Romanian ones, should take over the business model developed in Italy, which would drive down costs related to drawing in new customers.
As a rule, HVB's rivals do not publish any precise information on the value of portfolios they manage for top customers.
Last spring, HVB reported an asset peak of around 100 million euros on the private banking segment, with individual portfolios going beyond 5 million euros, but by yearend it saw a dramatic decline, according to published data.
The market seems to be witnessing ever fiercer competition as a rising number of domestic banks have announced their intention to include private banking services in their retail offer, for the management of some individual liquid assets worth above 75,000-100,000 euros.
The phenomenon is linked to the personal income growth trend, allowing for the accumulation of significant resources, as well as to the higher level of financial knowledge and the stronger demand for personalised services, adjusted to a category of top customers.
Private banking services
The market will see ever tighter competition as a rising number of domestic banks stated they planned to include such services in their retail offer
Market growth is related to the personal income growth trend, as well as to the higher level of financial knowledge and rising demand for personalised services
According to market information, the value of private banking portfolios managed by domestic banks was close to 1bn euros last year
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