THE NUMBER OF high-net-worth individuals on the Iberian peninsula is increasing fast, so financial institutions are trying to establish themselves as the top choice for private-banking services. The domestic commercial banks and savings banks are developing private banking units, consultants are establishing new boutiques, foreign banks are re-focusing on private banking, and the specialist private banks are hiring. "Just about everyone is trying to get a piece of the market. I wouldn't be surprised if restaurants were next to open up their own private-banking units," says a Spanish banker.
In the past five years, the commercial and private-banking sector in Spain has grown 34% by assets and 14% by clients, helped by solid growth in GDP, a strong national savings rate, and low allocations to equities. Indeed, in 2003, Spain boasted the fastest growth rate in high-net-worth individuals in Europe. "Given that specialized private banking is increasing its market share, financial institutions are now having to develop private-banking units as part of a defensive strategy," says Jaime Hap, commercial manager at Beta Capital MeesPierson.
"Three years ago private banking was not considered a viable business in Spain, and some banks pulled out," says Luis Moreno, head of marketing for private bank Banif.
