Comment: SG Private Banking will be hoping for better times ahead
SG Private Banking new money flows in the first quarter of the year were always going to be hurt by the financial turmoil and its own serious fraud incident in January, but the slowdown was worse than some had expected.
A fall of €1.6bn in net new money flows, compared with the same period a year ago, shows the rich are beginning to ask some questions of SG's wealth unit.
Total assets under management were also down sharply, by more than €5bn, which suggests the wealth manager has had a torrid time in managing the money it has, let alone attracting new money.
The private bank looks to have suffered partly from rising concern among the wealthy about links between wealth managers and investment banks hurt seriously by the credit crunch -- UBS, Merrill Lynch and Citigroup are obvious examples.
Some might argue the wealth unit has also opened up in some unusual locations in recent months, including buying a wealth manager in Calgary, Canada and opening a branch in Osaka, Japan.
Nevertheless, SG Private Bank is also expanding in wealth growth areas like Russia through its acquisition of Rosbank.
Daniel Truchi, the bank’s chief executive, told Wealth-Bulletin recently the acquisition in Canada is likely to be a prelude to a bigger strategic move into the North American market, particularly in the ultra-high net worth space.
Truchi added that India and the Middle East were also priority areas for the private bank.
SG Private Banking is also growing at home, with new offices planned in Bordeaux and other regional centres in France.
Truchi and his managers will be hoping all these efforts jump star the bank’s new money flows over the rest of the year, or reaching even half of the €8.8bn of inflows achieved in 2007 will be an impossible task.
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