Belgium debate: Belgium proves a bright spot for private banking

Belgium debate: Learn more about the participants 

Euromoney Let’s start by talking about how the private banking and wealth management industry stands right now in Belgium. Competition seems to be growing here in Belgium. Why is that?

PPDS, Bank Degroof The latest McKinsey figures show that year on year since 2005 Belgium has been growing a little bit faster than the rest of Europe. We are a poor country, but we have a very rich population. There has been a lot of wealth creation in Belgium during the past 20 to 25 years and we are seeing a generation of baby-boomers coming to retirement, so there is a lot of demand for advice. Every year we see new industry competitors entering the Belgium market. When I started there were six or seven in the market, now we have at least 15 competitors.

EDC, Bank Degroof I think the increased competition is two-fold. Yes, the Belgian economy has been doing rather well over the past few years, which is good in terms of revenue generation. But the second feature is that our financial system has been hit harder than the average financial system in Europe during the crisis. Next to Iceland and Ireland, our big financial institutions have been hit the hardest I would say. That’s led to greater mobility of clients. This may be one of the reasons why competitors are looking at Belgium – the economy is doing rather well and there is room created by the loss of confidence some people may have vis-à-vis some of the traditional big institutions.

RH, Bank Delen The increased complexity of the market now is also leading clients to move money. Twenty-five years ago clients managed their own money. Not many clients these days want to do it on their own and a greater proportion of them are giving their asset management to a private banker.

MD, UBS Belgium The crisis boosted the need for people to diversify banks. The Belgian market is definitely more crowded than it was but the market potential is significant. True, private banking penetration is relatively low; the economy, however, is quite healthy. This provides assets in the long run that are bankable, or private bankable.

Euromoney Belgium’s economy might be in better shape than other countries, but do you think there is room for new competitors?

EDC, Bank Degroof From past experience, I would say that while we are welcoming new players in, they may well walk away within a couple of years. You need to reach a given level of assets under management to be profitable, even if you are just a subsidiary of a foreign player. It doesn’t make sense to lose money year after year. We may be a small country with wealthy people, but it is not easy to be profitable.

Euromoney Are these US banks that are coming in or are they European banks?

EDC, Bank Degroof European banks.

PPDS, Bank Degroof No US banks are coming in, and there are no Anglo Saxon banks. The main players in Belgium are Belgian, Swiss and French. JPMorgan was the last that was active here but it left. It is all European banks.

RH, Bank Delen It is important to have close contact with all the families and that takes time. Wherever you are from, it takes time to form those relationships.

MD, UBS Belgium Commitment is key. We entered the market in 2002 and it was definitely difficult in the early stages because you have to be introduced into the various networks, knowing that people are extremely loyal to their banks in Belgium. Wealth management is our core business, so we are prepared to commit and as one of the best-capitalized banks in the world, we can afford to do so. For new or smaller players entering Belgium, it will require heavy long-term investment and will represent a big challenge to make it work.

PDM, Cadelam AM What do you regard as "small"?

MD, UBS Belgium Size matters but in this case it is more principle. There are a lot of financial intermediaries in Belgium and if regulation and requirements continue to increase further, it will become more and more difficult for less structured organizations to operate.

RH, Bank Delen It is a question of efficiency. When we were two or three times smaller than we are today we were still very profitable. Big banks are not always very efficient and efficiency is well linked to the cost of the asset management, and the cost of the asset management is today very important because the interest return can halt inflow. Clients are paying this cost, so the efficiency is really fundamental in all these debates.

EDC, Bank Degroof But regulations were different then...

RH, Bank Delen It is true that there has been an evolution.

Euromoney So are these new entrants a threat to your businesses?

PPDS, Bank Degroof It depends. These new entrants take many forms. On the advisory side I see a lot more boutiques being created and new types of advisers coming in. Some call themselves family offices and advise five to 10 families. Or even real estate agents and insurance brokers that start with a product and then convince clients to follow them. It is so easy to advise a family for a fee and let them invest in a number of funds you have chosen without being in breach of any regulations. Then there are some new entrants in asset management. They each can take a percent or half a percent of your business away, so that poses questions about the future of our business. I wonder on what type of business we will concentrate ourselves within 10 years. I am not sure we will be the same.

MD, UBS Belgium I would agree that these new types of players present a challenge in the Belgian markets in terms of potentially eating into assets under management. The question is, do they have the right tools? You might be very good at picking the right type of asset classes or solutions at large for some time, the question is when your economy is under pressure or when the markets are extremely volatile, as they are now, and you are a small team in an office, there is only so much you can do. We strongly believe that research is a distinguishing factor. That is why we spend more than $1 billion annually in better understanding the markets for the benefit of our clients. Institutions that build on research and make it a core part of their offering have an absolute competitive advantage in trying to get those half a percent or percentage points back.

PPDS, Bank Degroof Another thing I would point out is that there is some competition from the large Belgian banks for us at the moment. They have funding needs and so are prepared to pay private clients above market interest rates on short-term deposits.

Euromoney And is increasing competition having an impact on salaries or the ability to hire?

MD, UBS Belgium No. Private banking is much more than a salary discussion; it is a very long-term relationship with your clients, first of all. It is a competitive market. I am just not so sure that the new entrants are the ones who are the most dangerous. Belgian private bankers are very loyal. Most of the bankers stay with the firms they are with and if they do move would go between the leading local players. If a Chinese private bank, for example, entered the market at some point in time, it would take them a lot of convincing, beyond salary, to get the right people.

RH, Bank Delen Also, the private banker has worked with his clients for years. If he moves, he loses some of those contacts, and goes back to a lower level of assets to manage.

Euromoney So it’s not a case of winning talent by paying higher salaries than your competitor?

PPDS, Bank Degroof Private bankers are risk averse. To get them to move is very difficult. So we have looked at hiring younger talent with little or no experience to train them. What I found surprising was that some of them left. That is a new phenomenon for us as people usually come and work for Bank Degroof for many years – but that is not true with the younger people. The challenge is not necessarily because of new players coming in. It is demographic. Convincing younger people who are not familiar with the industry to join ours is tough. There are clients who are not very friendly, not everyone is happy with their returns. The past four years have not been particularly appealing to fresh, young talent.

Assets

Euromoney So let’s talk about your businesses. First, what are your projections for growing assets under management? Where will those assets come from?

RH, Bank Delen Annually we have a net increases in asset management of about 6% to 7% of the assets under management. This has been the case for more than 10 years and there is no reason to think that it is going to change in the next 12 months. That is without acquisitions of course. We bought an operation at the beginning of July with Finn & Co in London and that added about £7 billion [$10.8 billion].

PPDS, Bank Degroof We expect assets under management to grow between 2% and 5% a year. It is slow growth. We are benefiting from a growing number of baby-boomers taking their pension over the next 10 years, which will be a good provider of new funds for private banking in general. On the other hand, however, the financial crisis and the valuations on the stock market mean that fewer companies are being sold, so there is less creation of wealth or fewer events that create activities in this market than we had in the 1985 to 2005 period of growth.

MD, UBS Belgium Of course there are some regional differences in Belgium as to where the assets are coming from. We have the generational wealth, which is more in the Walloon part of Belgium/Brussels and then, in our case at least, the entrepreneurial wealth creation, which is net wealth, more on the Flanders side. Overall we see a sustainable growth pattern.

PDM, Cadelam AM One point of interest is that the generational wealth is actually using their money to help their children buy homes – as the deposit required has gone up. Those are outflows of assets and it is difficult to have increased inflows to compensate for that.

EDC, Bank Degroof To some extent, the repatriation of assets to Belgium has helped increase inflows. The Belgian dentist who had some of his assets in Switzerland and Luxembourg is coming home. We’ve had a de facto kind of amnesty where there has been rather generous treatment for people who are willing to come back home with their assets. This has been continuing, and beneficial for us. When clients move money back onshore it is an opportunity to break from their old provider without the guilt. So they can choose the best manager, and that has been positive for those of us who have been able to attract those clients based on the performance and the quality of the service.

Euromoney And Belgium is seen as a safe place to which to repatriate those assets?

PDM, Cadelam AM Well, clients want to move assets only when they can trust that the final destination is stable and they have certainty about how that money will be traded. The situation is still fragile.

PPDS, Bank Degroof A lot depends on political proposals for wealth tax. We have some debt as a nation and a new need to find tax revenues. Clients shiver a little when you talk to them about bringing money back to Belgium from Luxembourg in the same breath as talking about domestic wealth taxes. Also, clients are global. Belgians are very international in particular. Do they need to bring their money back here? Or could they send it to Asia or the US instead?

RH, Bank Delen Yes, this issue of wealth taxes is a concern. Other European countries have stopped those proposals. Money will not come back if people think these taxes will be imposed, and then even if the proposals are axed it might be too late.

PPDS, Bank Degroof From a historical perspective, a lot of Belgians are used to not paying a lot of taxes. Not only will money not come back but people will leave. Already I am hearing from some families that Switzerland is somewhere they may move to if a wealth tax comes in.

RH, Bank Delen Yes. They will go onshore in Switzerland and Luxembourg instead.

PDM, Cadelam AM If you have a wealth tax in Belgium and not in other countries then certainly some people will move.

MD, UBS Belgium There are tax increases that make sense, that make a society more efficient, and there are those that are just there to finance deficits. The latter is more controversial. Finding the adequate balance is key.

RH, Bank Delen So you see we don’t just have to have a financial conversation with our clients – it’s also political. It can be difficult.

Segmentation

Euromoney Let’s talk a little about different client segments. Is Belgium a large enough market to segment clients by wealth for example, and is segmentation relevant these days?

PPDS, Bank Degroof It would be extremely difficult in Belgium just to focus on one sector of wealth. You have at the lower end those Belgians who have been in good management jobs and now will have €1 million to €3 million as a pension. Then there are family business owners, and we had an economy that created a lot of medium-sized firms that sold for €10 million, €50 million. Then there are the ultra-high-net-worth clients – we say those with more than €25 million.

MD, UBS Belgium The market usually classifies ultra-high-net-worth clients as those with more than €30 million. One could, however, say it is a rather old-fashioned approach as we prefer to segment our clients by their needs. It makes more sense to segment them by needs.

RH, Bank Delen The requirements of the different wealth categories are not so different. What do they want at the moment? Stability and security.

Euromoney And what about how you manage generational wealth versus business owners? It seems a lot of wealth has been generated specifically from business owners?

RH, Bank Delen There is both old money and new money in Belgium and it can be regional. When we look at our activity, historically we have worked more with old money, but it is changing. We work with our sister bank, Banc Van Breda, which is more in contact with companies and it is an important source of new money for us. One-third of the new money is coming from our sister bank. In recent years, more people have become aware of the value of companies.

PPDS, Bank Degroof There are a number of baby-boomers who own businesses who are waiting for good valuations on the market. There is appetite for non-quoted companies and if you have a good company you can sell it at quite good multiples today although not as in the crazy days of 2005 and 2007. There is talk of introducing capital gains tax too, but if you sell your company now it is tax-free. That could lead to some liquidity events. But the new generation is lacking entrepreneurship in Belgium. We want to create along with the industry some sort of foundation to stimulate entrepreneurship in Belgium. We feel that we have to create our own clients for the next 10 years, because if nobody starts new business in Belgium the future is not bright for us either.

MD, UBS Belgium It is a cultural issue in Belgium. In the US you would be applauded for having failed because you will stand up more easily and better on the second occasion. In Belgium, however, failure tends to close a lot of doors, whether it is in your interaction with a financial institution but also the eyes of society. That makes for a risk-averse society. But I think the mental shift in the younger generation is coming, and it creates a huge opportunity for us as private bankers in the very long run. Once that plays out there is a big win/win both for Belgium as an entrepreneurial society or more entrepreneurial society and us as being potential private bankers.

Euromoney Let’s talk about investing. To put it mildly, markets are challenging. How are you managing portfolios for clients?

RH, Bank Delen Clients want to understand what the different issues are – so for us we just have to explain what is going on and gauge whether we have the right level of risk exposure for our clients. The markets’ instability is an opportunity to organize the portfolios and to be sure that we are not wrong.

PDM, Cadelam AM I agree that if the clients are in the right risk portfolio for them then there is less reason for them to be nervous. If clients in a low-risk defensive portfolio calls with concerns because the market is down 2%, then you know you have put your client in the right basket as they cannot deal with stress. But if a high-risk profile client calls with concerns – then I would start to worry that a mistake has been made.

PPDS, Bank Degroof We have the role of reassuring people and not making them panic, because if they panic they take bad decisions on their wealth management and their wealth structuring. Reassuring people is today the most important thing. You also have to do that by choosing the right assets.

MD, UBS Belgium The dynamic approach to portfolio management has become an absolute requirement whatever the profile is. You can’t anymore say: "I will go into this stock, and as it is a very defensive, conservative investment, I will stay there for 10 to 15 years". At UBS Belgium every portfolio is different, so it requires a lot of attention and handcraft. There is a high maintenance cost of doing that but it delivers better performance than the plain-vanilla approach.

RH, Bank Delen I agree. The buy-and-hold strategy in Belgium was done with the Fortis case. Everybody understood that you have to look continuously at your portfolio. That is perhaps sometimes an advantage for professional asset managers.

Broader approach

Euromoney Has how you are allocating assets for clients changed?

MD, UBS Belgium We do not believe in the old-fashioned view that you have a little bit of cash, a little bit of bonds and a little bit of equity, at least in the advisory side of our business. Diversification is key, and among a greater number of asset classes such as commodities, hedge funds, private equity or even art for example. The approach to portfolio construction is broader and more diverse than it used to be.

PDM, Cadelam AM I agree completely. You need to be diversified on multiple levels: sector level, country level and currency level, but our approach for the past 20 years has been very conservative. You can diversify in two ways: you can diversify to minimize your risk and make sure you are in the safest assets, or you can say "I am going to look for return somewhere else and optimize my return". About two years ago I think 70% was invested in OLOs, the Belgian Government bonds. Now it is 10%, so we have been diversifying first to other countries and then we have been moving away from the less safe countries to the safe countries.

Euromoney And the fact that people are concerned about the eurozone. How are you advising your Belgian clients there?

GC, UBS Belgium Clients go to currencies against which the euro is weakening. For us currencies is now an asset class, not just a diversifier through buying bonds in foreign currencies. We can make currency bets for our clients and have been doing so since the start of the year – the appreciation of emerging market currencies, the appreciation of the Norwegian krone, the Swedish krona; in a nutshell, investments in currencies of countries whose balance sheets look a little bit healthier than those of most developed countries. We at UBS construct this for each client individually – and from levels as low as €50,000.

PDM, Cadelam AM What we see as safe in terms of government finances, government debt, structural growth, are Norway, Canada and Australia. Then you have to look at the level of the currency. If we look at Norway and Canada it hasn’t risen that much. If you look at the Swiss franc, it grew tremendously at the start of this year and now it has fallen back a little bit, but those are really strong currencies and if they are at a reasonable level then we would increase positions in those currencies.

Euromoney And what are the biggest macroeconomic issues that Belgian clients are worried about at the moment?

RH, Bank Delen Banks, finance, the future of the euro, debt...

EDC, Bank Degroof Sovereign debt and financial stability.

Macro uncertainty

Euromoney Menno pointed out earlier that research is becoming increasingly important in light of macroeconomic uncertainty. Etienne, you are an economist, what are your thoughts?

EDC, Bank Degroof I would agree that you need to offer added value and the added value comes largely from your research report. It is incredible the number of questions we get from clients regarding macroeconomic developments. Big corporations used to have economists on the payroll until the 1980s; some of them until the 1990s. They all disappeared. Now they are concerned by what could happen in China and are looking at things from a macroeconomic point of view.

Euromoney Paul, René? What do you do in terms of research?

PDM, Cadelam AM It is a bit different for us. About 75% of our private clients have a discretionary mandate with us. They don’t want research. They want us to handle their affairs for them, so we are swamped with research from other brokers, we have to get the information, make the good decisions, but our final clients, they come to us because they don’t want to look at that research, they don’t want to analyse it. We have to do it for them.

RH, Bank Delen Yes, our clients are looking more for the asset allocation, the complete solution and the feeling they are in the right place with regards to stability, security.

EDC, Bank Degroof Don’t they ask questions about what is going on in Spain or in Italy right now? Or do they trust you to take care of those issues for them?

RH, Bank Delen Well, results are important. The first question clients ask is about the return on their portfolio, and as part of that discussion we would explain what is going on from a macroeconomic standpoint. But analysts are often very young people and not always the most experienced. The analysts are not taking the decision of what we are going to do with the portfolio; they give information, but the people with a little bit of white hair are going to decide what to do on behalf of the clients.

Euromoney Let’s talk about some specific asset classes. So, in equities, what are you looking at?

PPDS, Bank Degroof Stock markets have quite a negative image now but the companies behind the stock markets are not as negatively perceived. People are still convinced of investing in good companies that pay high dividends. It is stability they are looking for. Stock markets, however, are too volatile.

GC, UBS Belgium Stock-picking has always been part of the job. At this stage it is true that probably in the private banking environment you are going to shift a little bit of the exposure to hedge yourself against headline risk – where every time there is negative news about consumer confidence, industrial production, etc, the market is going to take a hit. We try to shift the portfolios from a sectoral perspective with a more pronounced overweight towards defensive companies – consumer staples, telecom companies, healthcare. Those companies that would be boring in a more normal environment are now the sexier stocks to have in portfolios.

PPDS, Bank Degroof Those types of stocks are also perceived as the easiest to understand. Clients feel that stock markets have become mysterious, with speculators playing the market and computers buying and selling. These stocks they can understand. We can explain in a simple way that people are still drinking Coca-Cola even in this financial environment. Clients feel a similar way about real estate. It is a sector they can physically see, as well as understand.

MD, UBS Belgium Real estate, if looking at it from a local investor’s perspective, is expensive. The savings capability for local people working on a local salary basis is close to zero, which means their spendable income is fully spent. If you are from Paris and comparing a 200 square metre apartment with a 35 or 50 square metre one in Paris then the Belgian real estate market is obviously extremely cheap but there is a relativity from a local perspective.

Euromoney Are we expecting the appetite for real estate to continue to increase?

PPDS, Bank Degroof Yes, I believe so. Clients have taken out around 2% of assets held with us over the past 12 months to buy real estate. As such, we’ve had to become more active in real estate in paper and now in bricks too. There will certainly be a need for good real estate advice as we believe it will become increasingly difficult to make money in Belgian real estate. Over the past 10 years, it has been easy to make money in Belgian real estate. Clients are going to go through a tougher period and we feel that there is room for new players to do it a bit differently and to do it really honestly. Real estate is a big part of the Belgium wealth management business for the moment and will be so for a few years more.

RH, Bank Delen I agree that real estate is one of our biggest competitors for assets. And I am not sure that the next 10 years will be as good as the last 10 years too.

PDM, Cadelam AM Compared with bonds, real estate is giving such a better yield even with the extra risk. Once interest rates go up, then there might be some issues around real estate. We believe that there will be more need for hand-holding in the real estate business not to lose money.

RH, Bank Delen It’s an interesting market that is not driven entirely rationally. Sometimes I have to explain the figures. "Because of the taxes involved, the day you sign you are losing 15%," I say to a client. That is quite a surprise to them.

PPDS, Bank Degroof Yes, real estate investment is not driven by returns necessarily. The assets that left us to buy real estate went into buying homes for leisure. A little something on the coast or in the south of France. It seems as if clients are understanding that life may be more difficult in the future and are thinking about how to improve their quality of life. They also think – my money over the last 10 years earned me 1% to 2% a year if that, so I would prefer to buy myself a little place to live.

Euromoney Are there any other asset classes that are interesting to clients right now?

GC, UBS Belgium At UBS we are seeing a decent appetite for private equity. Right now private equity players have access to a lot of money. The corporate appetite, the M&A activity, is a little bit at a crossroads for the moment while you see that companies are, from a balance sheet perspective, healthier than they have been in the past 15 years. Recession fears are causing some hesitation but sharp private equity players can put their money to work. I wouldn’t be surprised if this year and next prove 10 years down the line to have been good vintages.

Private equity

Euromoney And your clients are investing through private equity funds?

GC, UBS Belgium Yes. There are some themes – emerging market private equity; distressed is still seeing some attractive valuations. We release two to three programmes a year, or even more depending on client interest. Some programmes are diversified in terms of vintage and stage, and some are purely focused on a single manager in order to tap into a specific market opportunity. The key interest here is to offer, for a relatively small amount (usually $250,000 minimum only), access to a manager that would only accept subscriptions of $5 million or $10 million if he were to be directly approached by the investor. Despite the fact that, intrinsically, private equity remains a higher-risk investment, usually in difficult stock market years you release the best yield over the course of the investment cycle for a private equity programme.

PPDS, Bank Degroof Our clients, and certainly the ones that recently sold their businesses, also want to invest in private equity and non-quoted companies, but they have a tendency to require a direct investment. They want to meet the management, they want to know the company, so we have an activity of finding targets of quoted companies in France and in the neighbouring countries. Belgium is always preferred, of course, so we have an active market on small, unquoted companies. Very recently we had a company that had been sold for €80 million in the food sector and we had 10 to 12 potential investors in that company. Those investors had all sold businesses, were disappointed by stock market returns, and in spite of increased risk wanted to reinvest in unquoted companies.

Euromoney And clients are not concerned about tying up their assets for a long period, such as 10 years?

PPDS, Bank Degroof You will always have the tension between the short-term and the long-term investments. If you don’t take risk, however, you will be eaten up by inflation in the long term. I don’t think that has changed.

RH, Bank Delen There is concern, but to protect capital you sometimes have to take risks. Clients might not think about inflation, but inflation risk is a long-term risk.

Euromoney Is anyone seeing a demand for more capital-guaranteed products?

GC, UBS Belgium Yes we are, but obviously you also have to explain to clients how a capital-guaranteed product works – that it leaves you currently with little return.

PDM, Cadelam AM They don’t give you a real guarantee. Inflation is not included in general.

GC, UBS Belgium Absolutely. It really depends what you do with the capital-guaranteed products. It can be interesting to look at capital-guaranteed products with peripheral assets, for example, baskets of emerging market currencies. There you can have a three-year capital-guaranteed product that will look at potentially having zero return, but potentially having the upside of emerging market currencies. If your case on emerging market currencies holds because you think that indeed their balance sheet as countries is stronger than the balance sheet of developed countries, you can have a capital-guaranteed note while retaining a nice upside potential.

Euromoney Are you seeing more interest from Belgian clients in emerging markets and what do you think about emerging markets?

RH, Bank Delen We feel that we have to look at it because the world is changing. Today we have about 20% to 25% of the equities of funds in emerging markets.

PDM, Cadelam AM And with indirect investments that is more like 35%. If you look at companies that are active in emerging markets, their operations are growing; their margins are good in general; they are well managed, and some are underperforming at the moment. There are exceptions, but in general companies that are active in emerging markets and well managed will be successful over the coming five to 10 years. Companies with low debt and a good dividend yield we view as an alternative to corporate bonds and to government bonds.

PPDS, Bank Degroof Ultra-high-net-worth clients who can take a little more risk are much more active in the emerging markets, and they are going to different asset classes there. A large number of Belgians are interested in real estate in emerging markets and a number of Belgians are investing in agricultural land in Latin America and in other countries. India has always had important links with Belgium because you know that we have a very important diamond industry in Belgium, and India is active in the diamond industry – a big love relationship, so a large number of Belgians are investing in India.

Euromoney How are you making sure you are abreast of what is happening in emerging markets?

PPDS, Bank Degroof It is challenging. In front of Belgians you need Belgians to be private bankers and you have to have people who think like Belgians to do private banking in Belgium. Hiring an Indian, a Brazilian or even someone from the UK therefore is not the solution. We are making our people travel more.

GC, UBS Belgium For us it is a bit different as we are there in those markets. I think as an investment case every private client understands the importance of emerging markets. When it comes to innovative investments, that is more of a challenge. We invest a lot of resources in research. As we have said earlier, the group invests globally about $1 billion a year in research. A big part of that is going to be devoted to emerging markets. Locally we do invite specialists from UBS over here to talk with bankers and clients about opportunities and the economies in emerging markets. These live interventions are highly appreciated and usually trigger lots of questions by our clients.

RH, Bank Delen For us, Jacques Delen and Paul de Winter visit the emerging markets yearly, and have done for years as it is they who make the decisions on investments, not the analysts. It is true that you only learn when you are on the ground.

Euromoney And from investments to the softer services around private banking. Have you seen philanthropy, for example, decline as markets have?

MD, UBS Belgium No, and I would say in fact that philanthropy is an asset class of its own. It is quite an important business for us. We have been into the philanthropic and sustainable business for more than 10 years and there is a lot of demand – either on the side of restructuring current philanthropic approaches from existing clients, or creating new ones. You feel that socially responsible investing and socially responsible investments tend to become part of the second nature of people; they feel the need to have it as a part of their wealth creation and as a part of their portfolio management. I would say that from what we see in Belgium philanthropy is strong.

PPDS, Bank Degroof We see the same. We are the only real Belgian bank that created its own philanthropy department. It is lot more donation-based still. Although slowly people are starting to understand that you can have double or triple return investments on social investing. In Belgium it is difficult to find social entrepreneurs and for-profit social businesses, so we tend still to go to international microfinance and international social entrepreneurships and social private equity funds for investments. Earning money and having impact. That is the dream.

RH, Bank Delen There is an influence coming from the US of this idea that you can help society while making returns. Europe has been more about donations in the past. I hear people say they understand this difference now and that they are reassessing their philanthropic endeavours, but I’m not sure that is entirely the case yet.

Euromoney Any thoughts on the future of the Belgian private banking industry we could conclude with?

MD, UBS Belgium Challenging and healthy.

PPDS, Bank Degroof I think it’s the best business to be in right now, and we are needed more today than we were yesterday.

RH, Bank Delen Give us good markets and we will give you good asset managers.