Research conducted by accounting firm KPMG has found that one third of private banking institutions are planning acquisitions in the next three years, with the Asia Pacific region identified as a particular hot spot.
According to KPMG, the Asia-Pacific region accounted for 41% of all private banking acquisitions in 2003 (by volume). This compares with a figure of 23% in 2000 and is a trend the firm forecasts is set to continue, with the research suggesting that private banks around the world see Asia-Pacific as being the most noteworthy market in terms of growth potential.
The study also identifies the continued predominance of domestic acquisition activity in the private banking and wealth management sector, the proportion of which has increased from 63% of all private banking transactions in 2000 to 85% in 2003.
The study also observed that most deals are likely to be made with either North American or Swiss institutions and at the larger end of the market. The banks least likely to be involved are smaller banks, and the least active market is Germany.
Commenting on the findings, Rupert Chamberlain, Director, KPMG Transaction Services, noted: "When asked to identify the most noteworthy markets in terms of growth potential, private bankers pointed clearly towards Asia-Pacific, citing a combination of regulatory requirements in Europe and North America, the changing European tax and legal environment, and growth in wealth in the Asia-Pacific region as being contributory factors to this shift in focus."
"When one looks at the increasing number of high net worth individuals and the sheer pace of wealth creation in the Far East in particular, it is not surprising that so many organizations view that market as having great potential,” he added.
A recent Economist Intelligence Unit/KPMG report stated that more than US $1 trillion in bank savings were lying idle in China alone.
