Report 3Special r
BBJ
rance Retail banking/insu
SPECIAL REPORT: VOL. 22. NUMBER 21
d yea Banking on a goo private As assets grow, e bankers and alternativ are service providers to looking forward year. another strong GABRIELLA LOVAS
is banking sector Ample Hungary’s private strong year again. central gearing up for a by global level of liquidity supported with the low banks combined Hungary encouraged in than interest rates real portfolios ratherJános clients to build in bank deposits, told keep their funds of Private Bankingmore Dócs, CIB Head Journal. The the Budapest Business meant a lot of active money management private banks. at a latest banking fees for Portfolio.hu’s decisions for them private banking. rose us to make the he added. According to assets OTP leads in client Survey, risk level,” significantly weakened, Private Banking in the first are, in turn, and Geneva, have lured away by local or certain HUF 3 trillion be Independent providersis a Hungarian share of 6.9% to almost Erste their clients can had the biggest providers. Currently, from more flexible. Equilor present on the half of 2014. OTP market with HUF 931 other regional been net inflow of assetsof our provider that has the private banking management followed said Nagy. “In sees a massive for 25 years, offer the services to worry biggest billion assets under abroad. “We can for those, who do not market MKB Bank. The we do not haveprovisions, by Raiffeisen and Vienna practice Hungary,” addition, in terms of clients’ or making their assets to about bad loans alternative provider Securities. out loans. Thus, want to return do not give are are held assets was Concorde were as we said Kállay. trends from 2013 assets, which HUF 19 bln This year, the Kállay, are in safer Funds totaling Savings customers’ said András the Stability securities accounts,providers are Bank getting stronger, deposited on sked bank on Banking at Erste both Alternative no−questions−a of Head of Private Fund (BEVA) Accounts, the out of off− hands.” Customer assets money Protection Zrt. lure to arms Hungary in Investor at Equilor are accounts meant private banking Private bankers market and that were introduced commercial banks’providers have grown, the market members. shore accounts 2014. At first, the assets, continuously monitoring opportunities an increase in The gap and independent the first half of is considering gaining ground. is trend, CIB market required to open saw the inflow of big offshoredropped discussing investment with the latter as soon as the banking providers minimum amount The average average amount with their clients sure that between private As there is not enough the banking account. at around however, the said Kállay. The provides one. The staff makes potential further widening. the market, weaker a private in Hungary is in the third quarter, aware of the deposited is in up entry level clients are fully amount to be new money no chance of catching for HUF 70 million. already minimum risks and rewards. providers have 5 mln. in the market is “We have to fight Consolidation BayernLB HUF Kállay. with the top players. client,” stressed assets gathering pace. Germany’s state A NEW CONCEPT each and every the Hungarian introduction transfer of CHOOSING PROVIDERS MKB Bank to welcomed the to banks’ private The currently observed to others is being sold of customer assets, are pros and cons the services of The market of trust into Hungarian in July. In termsthird among Hungary’s There of the concept services and from certain providers the new Civil no is banking it Under ranked yields. Thus, at the MKB was in March 2014. driven by higher banking providers alternative providers. private banking law of low interest rates, a means of transferring most to top private 2014. As Citi is pulling period. Code, a trust is In an environment surprise that of June increasingly difficult accounts at more ownership of assets for a limited waiting common end it is getting still banking in Hungary, clients typically keep yields that were taking out of consumer participants, whilehave started Market considering provider. Bertalan obtain the 6−8% are one years, is than providers or three detailed rules, banking operations, The asked if Erste in the past two at Equilor many Unable to offer direct debit and for the own structures. Private Banking there is over its clients. Whenthe bank is open to includes preparing their Nagy, Head of accounts, Kállay said said. “However, providers can target group for such services gained cards, who Investment Zrt. The bank has in order to interested, deposits, alternative one area, business owners, the market, so private banking compete with banks in only have every opportunity. top managers and no free lunch in assets from yields, clients said Kállay. Private aim to separate their private experience in integrating the clients of generate substantial he added. Nagy believes business namely investments, after taking over risks,” their businesses. in Hungary in 2012, banking clients are mostly to accept higher can be based on the clients their those of take about 10−20 years to use BNP Paribas’ branch like to keep all it will Future growth owners and might at one provider. “At that as a form of managing a family’s portfolios, although that of ING in 2006. increase of the the current low−yield and banking activities have to show strong trusts as seen in other countries. in Other wealth, REVERSED time, banks this is limited on an agreement according to Dócs. assets CAPITAL OUTFLOW offshore private the same in the basic competences, A trust is based and the environment, portfolio a regrouping of the original owner The value of Hungarian HUF 2 tln performance we launched options include abroad and an deposits is estimated to reach ago,” he betweenand the trustee for the efficient this is why years two outflow deposited capital previously management services have time settlor bank’s share within following a significant the assets. the or three years. stressed. “Most clients do not they want management of increase of a private the past two also mentioned European finances and natural during the total. Dócs after traditional as Zürich to manage their customers as a bank’s premium generation of private However, centers, such banking base of the new Following the current private banking clients.
The pace of the consolidation in g market is beginnin to pick up.
RETAIL BANKS, INSURANCE NOVEMBER 14, 2014 – NOVEMBER 27, 2014
BUDAPEST
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Revenue might be light
NEWS
Photo: MTI / Attila Kovács
Economy Minister Mihály Varga looks on as Parliamentary Speaker László Kövér weighs a pen drive containing a digital version of the budget proposal. Analysts say the plan may be banking on more VAT than the government will actually receive. 3
SPECIAL REPORT
BUSINESS
Demonstrators call for tax chief to resign
Retail bankers expect another good year
Keeping in the competition
In the third Facebook-organized demo opposing government action in a month, protesters sought the resignation of the head of the tax authority after she admitted being branded “corrupt” by the U.S. 05
With assets increasing and low interest rates keeping portfolio management active, retail bankers and alternative providers predict a continuation of the good business they’ve been seeing. 13
At a BBJ-sponsored conference and seminar on staying competitive, there was a focus on the importance of IT as a vital local product that Hungary is in a good position to export. 10