Private banks successfully navigated regulatory and political upheaval last year with assets under management (AUM) up by almost 4% on average, according to Scorpio Partnership.
In its Global Private Banking Benchmark report, Scorpio Partnership said 2016 was a tale of two halves for the global wealth industry, as cost-to-income ratios also fell below 80% for the first time since 2012, reflecting wealth managers' efforts to cut costs despite continued compliance pressures.
But strong profitability masked an underlying struggle to improve revenue, with operating income rising just 0.04% on average.
‘The challenge going forward will be managing the revenue side of the profits equation’, said Caroline Burkart, director at Scorpio Partnership.
‘These firms are experiencing pricing pressure, driven by regulations, the trend for passive investing and the wave of lower-fee competitor models entering the market.
‘Solving the equation will require increased focus on enhancing the proposition with advisory capabilities and improvements to the client experience.’
We highlight the top 25 private banks by assets under management in the benchmark.