Consolidation in Europe’s private-banking industry is inevitable as pressure from clients and regulators increases costs, McKinsey & Co said in a study published yesterday.
Pressures on profit margins could force private banks to cut costs and review the number of booking centers they operate, the New York-based consultancy said.
The minimum volume of client assets under management required to make a booking location profitable is approaching 10 billion euros (US$11.3 billion), according to McKinsey.
Europe’s private banks are spending money on reshaping their businesses to comply with a raft of regulations such as MiFID II. New rules aimed at improving consumer protection include measures such as increased transparency on fees.
One in six of the private banks surveyed had a loss last year, McKinsey said.
While profit margins at the private-banking divisions of universal banks with a retail arm improved by 4 basis points to 36 basis points last year, the margin at independent onshore firms narrowed to 27 basis points from 32 basis points in 2010.
A group of private banks described by McKinsey as “foreign onshore players” struggled with an average profit margin of 9 basis points, according to the study.
A 1 percent increase in net client inflows at banks in offshore centers such as Switzerland, Luxembourg and Monaco lagged the 4 percent advance enjoyed by firms which focus on domestic clients, according to the survey.
The average profit margin at offshore private banks dropped to 25 basis points, meaning managers of cross-border wealth in Europe are no longer more profitable than those that prioritize their local market.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last