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Opportunities in Emerging EU Wealth Markets

Timetric
Published Date » 2012-10-05
No. Of Pages » 72
Synopsis

This report analyses and defines the private banking/wealth management industry in Europe and provides important basic definitions for this industry
It provides market analysis of the key client segments and their future potential, key issues of differentiation, client selection criteria and an overview of the current competitive environment in mature European markets

Summary

Wealth management in the European Union (EU) market is in the middle of a number of changes as banks have been looking to restructure business models in the last couple of years. The European private banking and wealth management industry is among the most important in the European financial services sector. The current potential for the core private banking client segments HNWIs and UHNWIs is already significant enough to be regarded as attractive by the industry; and it is expected to increase significantly during the next few years.

The high net worth individual (HNWI) population in Europe grew by 1.1% and reached 3.2 million individuals in 2011 from 2.6 million in 2008 and is estimated to increase at a faster rate in the next couple of years. The long-term potential and expected growth rates for key countries are promising. The origin of client wealth in the emerging EU markets is more a matter of income flows than of past accumulation; according to research findings, wealth is mainly produced by new entrepreneurs, professionals and business owners.

Scope

  • This report focuses on the European private banking and wealth management industry 
  • It provides a business-orientated view of important elements for strategic management and discusses possible sources of differentiation
  • It discusses the main market development and diversification-related issues for emerging EU markets, such as client profile, current wealth allocation portfolio, and possible differentiation criteria
  • It provides the description, analysis and comparison of market structures, potential, competitive environment, further market development and regulatory framework both for mature and emerging EU markets

Reasons To Buy

  • The report looks at core market development and diversification strategy issues concerning the emerging EU markets such as their market potentials, market structures or the competitive environment
  • It evaluates the growth opportunities of a product development approach for new products, such as property funds, on the basis of an emerging EU market
  • It tests a number of desk research hypotheses concerning strategic management of growth opportunities in an EU enhancement environment by an expert management survey of the industry
  • The report provides detailed research on core product development topics for mature markets, such as major investment constraints, expected further development and possible sources of differentiation

Key Highlights

  • The typical client segments of the European private banking and wealth management industry represent only about 9% of the total population in Europe, but represent around 60% of the total wealth held by private individuals.
  • Around 4.2 million core millionaires, who have between US$1 million and US$10 million to invest, accounted for 27% of a typical private banks assets in 2011.
  • The industrys profit margins have increased from 20bp in 2009 to 24bp in 2010, while cost/income reached 71% in 2010.
Table of Content

1 Executive Summary

2 Introduction
2.1 Background: European Financial Services and EU Expansion
2.2 The Higher-Value Segment
2.3 Differentiation

3 Private Banking and Wealth Management: Clients and Products
3.1 Definitions for a Client Segment-Focused Business
3.2 Strategic Evolution of Private Banking and Wealth Management in Mature Europe
3.3 Growth the Main Challenge in Onshore European Private Banking
3.4 European Offshore Private Banking Under Pressure
3.5 Main Business Approaches
3.5.1 Historical and Regional
3.5.2 Client segmentation
3.5.3 Core and non-core businesses
3.6 Market Analysis and Outlook for Mature EU Markets
3.6.1 The global context
3.6.2 The HNWI/UHNWI market segment
3.6.3 EU markets overall
3.6.4 European competitive landscape
3.6.5 Differentiation criteria for mature European markets

4 Growth in an Enhanced EU Environment
4.1 Growth in Both Mature and New Europe
4.1.1 Advantages of the EUs common regulation
4.1.2 Monetary union and the euro
4.2 The Product/Market Matrix Approach
4.2.1 Output
4.2.2 Drawbacks
4.3 Core Directions for a Growth Strategy Model

5 Growth Opportunities: A Market Development Strategy
5.1 Market Size by Gross Population Analysis
5.1.1 Per capita GDP and average financial wealth of population
5.1.2 Regional concentration of wealthier parts of the population
5.1.3 The HNWI/UHNWI segment
5.1.4 The EU markets overall
5.2 Client Behavior and Profile in Emerging EU Markets
5.3 Typical Wealth Portfolio Breakdown in the New EU
5.3.1 Differences between mature and emerging EU countries
5.3.2 Origins of client wealth
5.3.3 Wealth portfolio summary
5.4 Current Competitive Landscape in the Emerging EU Markets
5.4.1 Core business models and generic strategies for market development
5.4.2 Emerging private banking services
5.4.3 The retail trade-up strategy
5.4.4 The traditional wealth management providers: the offshore and offshore plus strategy
5.4.5 The Vienna hub approach
5.4.6 Conclusions for the competitive environment
5.4.7 Non-core business models
5.5 Case Study: Slovakia a Booming Economy in the Heart of Europe
5.5.1 A first-class example of a market development strategy: UniBanka
5.6 Market Development Strategy Summary for the Emerging EU Markets

6 Growth Opportunities: A Product Development Strategy
6.1 Behavior of Clients Towards Investments in Emerging EU Markets
6.2 Investments in the Securities Market
6.2.1 Bond markets: the convergence story has nearly come to an end
6.2.2 Stock markets: the outlook remains positive
6.2.3 Main investment constraints and risks indications for product development
6.2.4 Emerging product development trends
6.2.5 New benchmark indices and the index-orientated approach
6.2.6 Conclusions for securities-related products
6.3 Property Investments
6.3.1 Favorable investment rationale
6.3.2 Main investment constraints and risks for product development
6.3.3 Emerging product development trends
6.4 The Development of New Products Based on Emerging EU Markets

7 Conclusions
7.1 Management Summary for Business Practice
7.1.1 Market development/diversification strategies for the emerging EU markets
7.2 Recommendations for Market Development and Diversification Strategies
7.3 Universal and Retail Expanded Providers in Private Banking and Wealth Management
7.4 Traditional Providers in Private Banking and Wealth Management
7.5 Overview of Suggested Imperatives for the Strategic Management of Market Development
7.6 Development Strategies in Mature Markets for Products Based on an Emerging EU Market
7.7 Recommendations for Product Development Strategies
7.7.1 B2C provider types
7.7.2 B2B provider types
7.8 Overview of Suggested Imperatives for Strategic Management of Product Development
7.9 Main Implications for Future Research

8 Appendix
8.1 Methodology
8.2 Contact Us
8.3 About Timetric
8.4 Disclaimer

List of Tables


Table 1: The State of the Art Products and Services in Private Banking and Wealth Management
Table 2: Client Wealth band Definitions in Private Banking and Wealth Management
Table 3: Historical and Regional Business Models
Table 4: Core Client Segment-Orientated Business Models
Table 5: Non-Core Client Segment-Orientated Business Models
Table 6: Population and Assets, EU 27 Markets
Table 7: Population Structure Within the Enhanced EU 27
Table 8: Per Capita GDP and World Market Share
Table 9: Per Capita GDP Based on Purchasing-Power Parity (PPP) across European Countries (US$)
Table 10: Top Five International Banks in CEE, by Business Volume and Number of Branches
Table 11: Generic Strategies for Market Development in Emerging EU Markets
Table 12: CEE Bond Markets Convergence Spread
Table 13: Market Capitalization of Some European Countries (EUR Millions)
Table 14: CECE Composite index Composition as of 30 August 2012
Table 15: Composition of the Dow Jones Stoxx EU Enlarged 15 Index as of 31 July, 2012
Table 16: Composition of New Europe Blue-Chip Index (EUR) NTX as of 30 August, 2012
Table 17: Main General Imperatives for Market Development Strategies
Table 18: Main General Imperatives for Product Development Strategies on an Emerging EU Market Basis

List of Figures

Figure 1: Breakdown of Profit Pool Western European Average
Figure 2: Key Challenges for the Private Banking Industry
Figure 3: Extensive Use of Customer Data
Figure 4: Challenges of Client Segmentation in Private Banking
Figure 5: Growing Regulation as a Driver of Client Segmentation Changes
Figure 6: HNWI Wealth, 20072011
Figure 7: HNWI Population Across Countries, 20102011
Figure 8: HNWI Population, 20072011
Figure 9: Product/Market Matrix
Figure 10: Core Directions of the Growth Strategy Model
Figure 11: Per Capita Nominal GDP
Figure 12: Breakdown of HNWI Financial Assets
Figure 13: Private Financial Wealth (US$ Trillion) and Share of Wealth by Regions in Europe
Figure 14: Presence of Foreign-Owned Banks (% of Total Assets)
Figure 15: Deutsche Banks Vienna Hub Strategy
Figure 16: Asset Growths Across European Regions
Figure 17: Asset Growths of Some Central European Countries (Euro Based) in 2011
Figure 18: Domestic and Foreign Investors Across Countries
Figure 19: Share Ownership Structure of the European Listed Companies
Figure 20: Top 20 E-REGI Rankings
Figure 21: Forecasts for European Office Markets
Figure 22: Real Estate Transparency 2012 Composite Index by Region
Figure 23: Worlds Most Transparent Markets
Figure 24: Real Estate Transparency 2012 Composite Index of European Countries

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