HVB Tiriac has so far found almost 1,000 individual customers owning liquid assets of over 100,000 euros, who thus benefit from top services of the private banking category. The average value of an individual portfolio even goes as far as 200,000 euros.
"We also have a group of customers whose portfolios go beyond 5 million euros," Monica Ionescu, head of private banking with HVB-Tiriac, told ZF. She says that over 70% of these customers are from Bucharest.
HVB Tiriac's private banking unit has managed to outstrip major rivals such as ING and Raiffeisen in terms of the number of customers, with the former two reporting 500 customers each. In terms of assets managed, ING did not reveal their volume, while Raiffeisen speaks of around 200m euros.
At the end of last year, HVB Tiriac was managing private banking customer assets worth around 160 million euros, up 60% against 2005. Monica Ionescu says the increase was brought about both by the fact that the bank got new customers from Banca Tiriac, in the wake of the merger closed in September 2006, and by the significant increase of the already existing customers. To benefit from the special private banking services, a customer must hold liquid assets worth at least 100,000 euros. Ionescu says that depending on market expansion conditions, this market will also witness segmentation in terms of customers and provided services.
Ionescu has already identified some individual customers of UniCredit Romania holding over 100,000 euros in their accounts and who can become private banking clients as UniCredit does not offer such services. Thus, she estimates that after the merger between HVB Tiriac and UniCredit is concluded in June, the private banking department of the future bank will have more than 1,000 customers.
Bankers specialised in this field are reluctant to publicly talk about the yields portfolios of above 100,000 euros generate, citing differences given by the types of portfolios, which are built depending on each customer's risk profile. At any rate, the basic principles of managing a private banking portfolio are the same, irrespective of the value, with personal bankers being mindful of several issues that can determine investment returns and implicitly customers' satisfaction.
Ionescu says that customers' risk tolerance tends to increase as the relationship with the bank tightens, though the conservatory profile dominates at the beginning.
Thus, the volume of foreign placements HVB Tiriac operates for its private banking clients tripled last year, but their weight is still low compared with placements on the domestic market, which can generate bigger yields.
The bank plans to strengthen its presence outside Bucharest amid the expansion of the Private Banking department.
HVB Tiriac private banking
So far has lured almost 1,000 individual customers with liquid assets topping 100,000 euros
Has managed to outrun major rivals such as ING and Raiffeisen in terms of the number of clients
At the end of 2006 was managing private banking customer assets worth some 160m euros, up 60% against 2005
Foreign placements tripled in 2006, but still weigh less than domestic ones
Plans to strengthen its presence outside Bucharest
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