Unicredito’s acquisition of German bank HVB Group two days ago will obviously have major consequences for retail banking services in Central...

Unicredito’s acquisition of German bank HVB Group two days ago will obviously have major consequences for retail banking services in Central and Eastern Europe, but what has been less talked about is the private banking franchise the two groups will have, particularly in the emerging wealth management area of Eastern Europe. Unicredito is Italy’s largest bank by market capitalisation and it also controls the biggest private bank in the country, Unicredito Private Banking. UPB has approximately €50 billion ($60.4 billion) of assets under management and around 100,000 clients and around 580 relationship managers. It is headquartered in Turin. UPB has established a big presence in the burgeoning onshore private banking business in Italy, which has been fueled by two recent tax amenities. The bank has a number of offshore private banking subsidiaries, including Banque Monégasque de Gestion, based in Monaco, and Unicredit Suisse Bank, which is based in Lugano. Unicredito considers private banking a core business, so much so that in 2003/2004 the bank attempted to takeover Banca del Gottardo, the biggest private bank in terms of assets managed in Lugano. The deal failed at the last possible moment after Unicredito decided there were unresolved issues centred on the bank’s books. The Italian bank also has a stake in a wealth manager in Poland, which will fit well into the newly merged entity’s Eastern Europe ambitions. Xelion, which is owned by Bank Pekao and Unicredito, is currently in an expansionary phase throughout Poland. Unicredito said after the acquisition of HVB that it would relocate all its private banking business to Milan, which will include the various private banking businesses of the Munich-based HVB. HVB has built up a premium banking franchise in Southern Germany and recently it has targeted growth among ultra-high net worth individuals in Germany. But possibly the German bank’s most important private banking franchise is BANKPRIVAT, an Austrian private bank based in Vienna. BANKPRIVAT came into existence in May 2000 by merging the private banking units of Bank Austria and Creditanstalt. The bank has around 20,000 clients (most with €500,000 and above in investable assets). Last year was a good one for private banking in Austria, fueled by a 57 per cent rise in the local stock market, the ATX. BANKPRIVAT is busily trying to expand its business in the major Eastern Europe economies of the Czech Republic, Slovakia and Slovenia. Indeed, it will be in Central and Eastern Europe where the newly merged bank will provide the biggest growth potential for its private banking business.