Private banking in Latin America: Brazil reverts to type
The private banking industry in Latin America had a difficult 12 months as wealth creation slowed throughout the region. The picture for the year ahead looks brighter for some countries, but Brazil remains the dominant market and its prospects are still murky.
The wealth management industry in Latin America is far from homogenous, but a rare common thread was apparent throughout all last year: 2014 was tough in the private banking industry.
Wealth creation slowed around the region, even in Mexico, which is still considered the best bet to produce new high net-worth individuals and expand the portfolios of the already rich. This theme looks set to continue, too.
“If you look at the wealth pool in Latin America in general, we will see a slower growth rate in the near future,” says Alex van Tienhoven, CEO of Citi Wealth and Investment Management in Latin America and Mexico. “We have been seeing close to double-digit wealth creation in recent years – in line with GDP – and now regional growth is expected to decelerate to 4% or 5%, so wealth creation will continue growing at a lower pace.”
Despite this commonality there will be differentiation within this slowdown, according to Felipe Godard, head of wealth management in Latin America at Deutsche Asset & Wealth Management. “Our view on LatAm is very positive, but not all countries represent the same opportunities.