Clients in the “affluent” category, with less liquidity, will be served by the bank’s retail division.
The wealth management department is part of the medium-sized companies division, as clients on this segment are often owners of local companies, which makes it easier to cross-sell.
“For the new wealth management offer we are working with our colleagues at ING Luxembourg, a company with more than 50 years’ experience in the field. (…) It is also from there that we took a technical platform which is already functional, with further products to be developed in the future,” says Octavia Cutus, who has for over a year run the private banking business of ING – the first bank on the Romanian market to come up with an offer dedicated to top clients.
Structured notes have been launched as part of the new offer of structured notes. They can be built on any underlying asset, from gold and exchange rates to share baskets, stock exchange indexes and prices of raw materials.
“For amounts larger than EUR1 million we can create a structure desired by the client. Unlike other products, structured notes are more liquid and there is a secondary market which allows an exit if the client needs liquidity at a certain point. They offer protection for the principal, but only if kept until maturity,” explains Octavia Cutus, specifying that maturities go from 3 months to 5 or 7 years, but that Romanian clients tend to favor short maturities.
Cutus says the most valuable private banking portfolio managed by ING amounts to several tens of millions of euros.
Cutus doesn’t note very aggressive competition on this market segment, although most large banks, as well as smaller ones, say they have offers for their top clients.
“Clients in this category often work with two or three banks. There is room for everyone to prove their standards.”
Client portfolios are dominated by deposits, while government securities and bonds account for an average of around 30%, while amounts placed in investment funds and stock exchange shares make up about 7-8%.
Cutus says the wealth management division of ING has in the past few years had significant new amounts coming in as clients turned away from real estate investments, which had risen significantly before the crisis.
Deposits increased although the bank doesn’t have a policy of attracting resources through price.
“In general ING is not aggressive in its liability pricing and its stock of deposits is very stable.”
Clients are very diverse professionally, but geographically they are concentrated in capital Bucharest.
Around 75-80% of ING’s private banking clients are men, with the youngest being 18 – members of families that are part of the top-ranging clientele, and the oldest are over 80 years old.
Cutus says this is still the first generation of clients for the Romanian private banking segment, so client trust remains limited. “Clients still find it difficult to leave control of their fortunes in the hands of bankers, as is the case on mature markets, and prefer to be involved step by step in every investment decision.”
In 2013, ING’s focus will be on financial and portfolio management consulting.
(English version by Daniela Stoican)