Piraeus Bank turns to wealth management

Piraeus Bank is aiming at doubling its private banking activity within the next 18 months, said Vangelis Dounias, the head of the bank’s relevant department, this week in a press conference. The bank may have expanded its market share in loans issued from 0.3 percent in 1991 to 12 percent in 2005, but its private banking activities have not enjoyed similar growth. However, Dounias’s recent transfer from Citigroup Private Bank signals an upgrading of the firm’s private banking, with the department now renamed «wealth management department» and expanded to 28 employees. The bank’s deputy general director, Yiannis Kyriakopoulos, said the change is associated with the change in the bank’s provision of other services, too, such as tax advice, inheritance management, and advice on investment on art. Today the assets managed by Piraeus’s private banking department reach 500 million euros, but its ambitious target is for it to exceed 1 billion euros in the next year and a half. Contrary to the practices of other Greek banks, these figures do not include deposits by clients in private banking. The overall deposits by the bank’s clients reach 19 billion euros. The growth of private banking will take place both with its existing clientele of retail and corporate banking and through direct marketing to new clients, Dounias explained. He added that the bank has solved the problem of «to whom the client belongs,» among branches and the central wealth management department, a problem that in other cases can create major internal grievances. The potential clientele of the private banking market in Greece is estimated at 25,000 to 30,000 families according to other sources, an estimate that Piraeus Bank officials seemed to agree with, although they avoid any reference to specific figures. The bank’s wealth management clients are split into two main categories: those with 300,000 to 800,000 euros to invest and those with more than 800,000 euros. Piraeus Bank provides the former with active portfolio management through mutual funds, and the latter with management that is «tailor-made» for their personal investment profile. Market prospects The bank’s officials have also analyzed international market trends for 2006, which is what private banking clients want. Chief Investment Officer Alexis Soultoyiannis explained the generally optimistic scenario of satisfactory growth without inflation. In the eurozone, interest rates are not expected to exceed 2.75 percent, from 2.25 percent today. «This scenario favors exposure to stock risk against bonds,» he noted, adding that Japan, the rest of Asia and other emerging markets are showing better prospects for a rise, particularly Brazil, Singapore and Taiwan. In the domestic market, Piraeus Bank believes the impact from the high earnings of banks is now over, so high returns could now come at banks that become acquisition or merger targets. It recommends a portfolio of six stocks consisting of the National Bank of Greece, Alpha Bank, OTE, OPAP, PPC and Coca-Cola HBC. From the European sectors, it prefers the stocks of industry, energy and telecoms, while being neutral on banks, health, raw materials, technology and utilities and is negative on consumer products.

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