Erste Bank, one of the largest providers of private banking in Austria
14 Nov 2006
With more than EUR 20 billion in managed assets and more than 30 sales staff, Erste Private Banking is one of the largest and most important providers of private banking services in Austria, said the bank in a press release.
As one of the market leaders, we offer personal banking services to high net worth clients wishing to invest EUR 300,000 or more. We manage the assets of private and institutional investors from Austria and abroad. Our customers include wealthy individuals, private trusts, companies, professionals, public and charitable institutions.
• The team focuses in particular on the following services:
o Risk/return analysis of the client’s portfolio
o Portfolio structuring and portfolio management
o Maximisation of earnings and tax efficiency by means of a selective range of products developed especially for our private banking clientele
o Individual asset management
o Full range of services for private trusts
o Advisory service for the investment of business assets
o Setting up special and large investor funds and individually structured products
o Family Office
o Network of experts comprising tax consultants, lawyers, trust experts etc.
o All the services of an international universal bank
• Eligibility threshold for Erste Private Banking: EUR 300,000 upwards (in liquid funds); from EUR 2.5 million upwards special Wealth Management - Services
• Employees: more than 30 employees in direct customer business/sales
• Assets under Management: more than EUR 20 billion
• Average assets under management: Private customer approx. EUR 1.5 million, large institutional customer approx. EUR 50 million
• Share of foreign customer assets : approx. 5% of the assets under management
Private Banking at Erste Bank
Erste Bank was founded as Die Erste österreichische Spar-Casse on 4 October 1819. In 1997 Erste Bank der oesterreichischen Sparkassen AG was established following the merger with GiroCredit. Erste had always been engaged in high-end investment advisory services and in 1993 this led to the establishment of a separate private banking department.
We are a private bank which offers the safety and other advantages of a large bank. In the private banking and asset management segment, Erste Bank is organised like a private bank, offering comprehensive customer service with all additional private banking services as well as asset management and fund management from a single source. Furthermore, we also offer our clients the full range of general banking services (e.g. current account, credit cards, financing). Moreover, we also provide real estate services, insurance and leasing services through our subsidiaries. Our scope of services is therefore broader than that of a classic private bank.
Our private banking department serves high net worth private clients and institutional investors with minimum investable assets of EUR 300,000. Wealth Management is available to clients with assets of EUR 2.5 million or more.
Range of Erste Private Banking Services
Flexible Customer Service
The private bankers are available to clients outside normal banking hours and above all at the customer's location by appointment.
Our specially trained personal bankers are available to clients with minimum investable assets of EUR 300,000. The main focus is upon a risk/return analysis of the customer portfolio and upon maximising earnings and tax efficiency by means of a selective range of products developed especially for our private banking clientele.
Customer Relationship Models
Erste Private Banking offers its clients personalised services. Depending on the client’s risk tolerance and desired service intensity, we offer the relationship models Classic, Benchmark and Active. In all three relationship models Erste Bank uses open product architecture, and innovative products are regularly offered. For example, we are able to offer our clients a special bond fund tailored especially to the needs of private banking customers with which they can achieve an unusually high after-tax return. These relationship models also make use of alternative investment products such as hedge funds, which follow an absolute return strategy.
Erste Bank private banking also offers its clients the option of an "all-in fee", i.e. an annual flat rate fee, which covers all fees in a clear and transparent manner for the customer. The all-in fee is scaled according to the size of the investment, the type of portfolio and whether the customer wishes a single security account or not.
For capital assets of EUR 500,000 or more, we offer our clients structured asset management. Besides the services of Erste Bank, clients may also decide to use the asset management services of one of our international partners. For assets of EUR 2.5 million upward, we offer solutions with greater possibilities for structuring investments (e.g. with specific securities)
Our expertise in the area of Private Trusts benefits clients as do specialised offers of tax optimised product solutions, such as those offered in the bond sector for clients who are subject to withholding tax or specialised solutions for our clients with limited tax liability (such as public bodies or religious institutions). Leading trust experts support the private banking advisors, thus making a valuable contribution on behalf of our trust clients.
For clients with assets in excess of EUR 10 million our Private Banking & Wealth Management offers a Family Office which offers the following services:
o Complete financial and assets analysis and planning: This includes the development of a long-term financial plan and the day-to-day administration of the family’s assets, taking into account the personal, fiscal and legal objectives of the family.
o Investment Advice and Management
Consolidated financial reporting on any number of accounts, especially customer’s securities deposits
Real estate and insurance solutions
Large investor and specialist fund solutions
Art banking with the assistance of external arts experts
o Business succession planning and private inheritance planning
o Private trust advice in consultation with external legal advisors and tax experts
We are also able to offer our clients assistance in fiscal and other relevant legal matters as we have an extensive network of experts such as lawyers, asset managers, trust and tax experts which we place at the disposal of our private banking customers.
At the same time our clients receive the kind of exclusive services they are entitled to expect as wealthy investors: In addition to bespoke services such as thorough reporting and non-banking services, we also invite our customers – according to their interests - to exclusive events. Within the scope of Art Banking we also arrange – in co-operation with renowned auction houses and galleries – for the bringing in of art objects into a private trust, art advice, estimates and the purchase or sale of works of art etc.
One-Stop Financial Services from a Major Austrian Bank
Another advantage over small private banks which our clients also appreciate are those special features that only a large international provider of universal financial services such as Erste Bank can offer: The client receives all financial products from a single source.
Financial reports are drawn up for clients at intervals defined by the client and besides an overview of assets and performance development, include overviews of asset values, portfolio breakdown including details of positions and securities account movements as well as a market commentary and outlook. Furthermore, we also offer electronic reporting via the internet, where the client can even access the comprehensive financial report on a weekly basis.
Our Relationship Models in Detail
Erste Private Banking offers clients from each risk group personalised relationship management models:
Relationship Model CLASSIC
The Classic client is looking for a stable, regular return from his investment, irrespective of stock market trends and other market developments. He invests in low-risk, traditional securities but also appreciates innovative accents in implementation: The following standard portfolios are available:
• Bond portfolio with 100% bonds for stability, preservation of assets and a regular return
• Classic 20 with a dynamically managed share of stocks of between 0% and 20% for a regular, tax efficient return by means of traditional investment with innovative accents, such as the optional inclusion of hedge funds or real estate products
• Classic 40 with a dynamically managed share of stocks of between 0% and 40% for a regular, tax efficient return by means of an equity-weighted investment with innovative accents, such as the optional inclusion of hedge funds or real estate products.
Relationship Model BENCHMARK
The Benchmark client invests within a framework of precisely defined limits. Our asset managers invest on behalf of these clients in a highly transparent manner and performance is precisely measured against an agreed benchmark, such as a specific bond and/or share index. The following portfolios are available for this customer.
• Conservative Portfolio with a 20% share of stocks for asset growth in line with the market and with a preference for regular returns
• Dynamic Portfolio with a 35% share of stocks for a regular return in line with the market and with a preference for capital accumulation
• Risk-Bearing Portfolio with a 50% share of stocks for a regular return with a strong preference for capital accumulation
• Aggressive Portfolio with a 70% share of stocks for a focus on asset growth
• Equity Portfolio with 100% shares for strong asset growth
Relationship Model ACTIVE
Active Clients choose a portfolio structured and managed according to their individual wishes and requirements. In addition to classic investment instruments such as a specific security account or fund solutions with shares or bonds, we offer all conceivable structured products, especially in the bond segment, such as corridor bonds, inflation-linked bonds, or in the equity segment, various structures based on share baskets or diverse certificates based on share indices, and finally, in the hedge fund segment, in guaranteed products on hedge funds and – with a correspondingly high volume – highly personalised structures.
The Austrian Private Banking Market
The private banking market in Austria and worldwide is characterised by a multitude of competitors. Bankers maintain an extremely low profile in this discreet business, and also serve many large institutional investors – both factors which make an exact assessment of the market very difficult. On the basis of an internal analysis, we estimate that the Austrian private banking market has an investment capital of approximately EUR 104 billion and an anticipated annual growth rate of approximately 5 to 10%.
In specific terms, the estimated market share of Erste Private Banking (including the private banking units of a number of affiliated savings banks) is approximately 19.5%, putting us among the market leaders in Austria.
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