Banking, Hong Kong, Private Banking, Regional Asia, Research & Consultancy, Singapore - Thursday, January 1, 2009 14:35 - 0 Comments

Private banks come to terms with vastly changed status

Cerulli Associates, Asia Pacific Edge, January 2009

As the world’s private banks struggle to come to terms with their vastly changed status after 12 months of market turmoil, so too are they adapting to changing needs and expectations from their clients. The market for private banking services in Asia, and the models of those banks who seek to provide them, are in a great state of flux.

It starts at the very top. Consider the field of the world’s leading private banking groups. UBS remains intact, but with confidence in the bank and its model shattered and $4.4 billion of write-downs in the third quarter alone; it has committed to paying back $8.3 billion of auction-rate securities held by its private clients, securities it clearly now believes should not have been sold to them in the first place. Credit Suisse wrote down SFr2.4 billion in the same quarter. Merrill Lynch lost so much that it has been taken over by Bank of America. Citi’s losses were so big, in terms of money and confidence, that it had to be bailed out by the US government. Of the bigger names, JP Morgan and HSBC have come out looking best – and one would hardly call them unscathed. Continue…

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