With a unique reach into the small and medium-sized enterprise, and mass affluent segments in central and eastern Europe, as well as a long tradition of wealth management in its Austrian home market, Raiffeisen Bank International (RBI) is ideally positioned to play a leading role in private banking in the region.
The group, which boasts the most extensive commercial banking network in CEE, last summer added Serbia to the list of markets with dedicated private banking operations. RBI already has a market-leading position in the segment in Czech Republic, Slovakia, Hungary, Croatia, Romania and Russia.
Andras Kallay, RBI’s private banking executive director and retail chief investment officer, describes the operations in central and southeastern Europe as “classical onshore domestic private banking.”
Additionally, clients can choose to bank with the group’s local Friedrich Wilhelm Raiffeisen operation or with its Vienna-based subsidiary Kathrein Privatbank, one of the traditional boutique private banks in Austria.
In Russia RBI’s offering is even broader. Clients can combine the two, opting for a local relationship manager but with international settlement in Vienna. “This is a very flexible option and unique in CEE,” says Kallay.
RBI hopes to use this model to target higher net-worth individuals across CEE in future, but for the moment the group’s core market is clients with between €750,000 and €2 million to €3 million in liquid assets.
Many of these graduate to private banking from RBI’s popular mass affluent offering, while its SME business has also proved a fertile recruiting ground.
“Our entry threshold is typically between €250,000 and €500,000, which is more the comfort zone for our mainly SME-owner clientele,” says Kallay. “We have also a really strong position in that segment, so it’s a very good referring base.”
Wealth management is a key part of RBI’s private banking offering. Traditional investment advisory services are the most in demand in CEE, but the group has also seen increasing appetite from clients for its execution-only trading service and for portfolio management, a relatively new concept in the region.
RBI is also rapidly marking itself out as one of the leaders in the move towards responsible investing in CEE, an emerging trend that has gained traction over the past 18 months. A survey undertaken by the group last year in six markets found that retail clients were more open to incorporating sustainability in their investment decisions but needed help to navigate the market.
“For this reason, we are proactively approaching clients and focusing on managed fund solutions, discretionary mandates and structured products,” says Kallay. “We are lucky because Austria is a frontrunner in sustainability so we can leverage our product lines from our home market offering.”
The success of this strategy is already showing in the numbers. This year, 20% of RBI’s overall investment sales in CEE involved a sustainability component, with private banking accounting for a large majority of the total.
Another strength of RBI’s private banking and wealth management offering is its technological prowess. This is largely driven by Tatra Banka in Slovakia, which has positioned itself as a digital frontrunner in every banking segment.
This expertise proved particularly valuable when the pandemic hit last year. By the beginning of May, RBI had transitioned all its private banking operations to remote and by the summer Tatra Banka was able to seamlessly combine phone-based advisory services with mobile functionality, including electronic signatures.
