World’s Best Private Banks 2024—The Year Ahead

Global Finance recognizes this year’s best private banks.

Catering to the needs of wealthy clients has seldom been as challenging as in the last couple of years.

On the one hand, headwinds such as elevated interest rates, narrower corporate margins, and a historic selloff in fixed-income markets have compelled private banks to adopt a more conservative approach to portfolio management, producing in steadier results. Says Ida Liu, head of Citi Private Bank, “Amid rising geopolitical tension and in the wake of last year’s market volatility, our message to clients continues to stress building globally diversified portfolios and keeping them fully invested for the long term.” 

On the other hand, the ongoing generational shift in client composition and evolving technology breakthroughs keep accelerating demand for new, better-yielding investment products.

To reconcile these seemingly conflicting demands, the private banking sector is undertaking a structural transformation that prioritizes innovation, service, and holistic planning. “The industry has been challenged to grow and design products in this high interest rate, deposit-focused world we’re in,” argues Wally Okby, strategic adviser at Datos Insights Wealth Management. 

After an explosion in new offerings and fat ROI in 2021 on the back of net-zero interest rates and a supportive macroeconomic environment, last year brought the flip side of the coin: Tighter corporate margins and the largest conflict on European soil since World War II hiked volatility and brought inflation pressures back.

This year, the failures of such institutions as Credit Suisse and Silicon Valley Bank raised flags concerning the the global banking industry in the face of high interest rates and lower-yielding investment portfolios. But private banks stayed surprisingly resilient despite this backdrop. According to PwC Global, the wealth management market enjoyed a CAGR of 8.6% from 2022 to 2023 and is projected to keep growing at a 7.8% rate through 2027.

Top-line global behemoths including JP Morgan, UBS, Citibank, Bank of America, and Morgan Stanley have posted double-digit year-over-year growth both in profitability and assets under management (AUM) for their private wealth management divisions. These numbers were buoyed by the takeover of clients and assets from failing institutions. But also driving the improved results was improved financial management, ensuring the resilience of some of the world’s largest fortunes in both prosperous and challenging periods. This resilience has become an industry cornerstone in the last few years.

“Most private banks across the globe have become much more conservative in their lending policies over the past year and have curtailed lending against illiquid portfolios,” says Okby.

Top-tier private banks have refocused on their customers’ fundamental long-term needs, despite the faster moving economic environment, says Alfonso Castillo, global head of Santander Private Bank. “Our HNW and UHNW customers’ requirements have not changed as they continue to be focused on wealth planning, access to best-in-class personalized solutions, and excellent service,” he notes.

Conservative lending and investment practices do not mean the industry is clinging to its old ways; behind the above-average results lies an intricate mixture of long-term multigenerational wealth planning and new product offerings.

According to Boston-based data provider Cerulli, the market expects approximately $72.6 trillion in assets to be transferred from one generation to the next over the coming two decades, with another $11.9 trillion earmarked for charitable donations. “Wealth planning is inherently multigenerational,” says Katy Knox, president of Bank of America Private Bank. “An increased awareness of how philanthropy addresses complex social issues will also uphold resiliency and drive growth in the philanthropic sector.”

Private banks have been racing to adapt their business models to their customers’ evolving needs, without putting off their long-term customers. “With the largest wealth transfer happening this decade, we are catering to the needs of the next generation of wealth: providing education, networking, and opportunities for them to sustain and build upon their wealth,” says Citi’s Liu.  An overwhelming majority of young investors—75%—believe that achieving above-average returns with traditional stocks and bonds alone is impossible, according to recent research by BofA Private Bank. As a result, many firms are expanding product offerings with high-quality alternative investments such as hedge funds or private equity, Okby says.

Private banks also need to improve their positioning and product offerings in developing markets. According to PwC, Asia-Pacific, Africa, and the Middle East are set to lead global AUM growth over the next five years, and by 2027, growth rates in the Asia-Pacific region will be approximately 50% higher than those in North America.

Likewise, according to Henley & Partners’ Private Wealth Migration Report, Australia is at the forefront of attracting emerging millionaires, with an influx of 5,200 HNW individuals expected during full-year 2023. The United Arab Emirates and Singapore closely follow as beneficiaries of this trend.

Against this backdrop, banks are introducing greater geographic diversification into their clients’ portfolios.

“Despite the uncertainty across the globe,” says Don Heberle, head of PNC Private Bank, “investors remain open to allocating beyond the traditional US-Europe axis when the opportunity set is well-defined and aligns to the goals and objectives they are trying to achieve.” PNC sees “greater interest in conjunction with well-defined potential risk, reward, and diversification parameters along with education regarding the opportunities.”

At Citi, “our community is increasingly favoring global allocations, in line with the long-term investment plans we customize for them,” says Liu. “We believe the current forces will further encourage investors to build global portfolios.”

ESG, too, is a trending topic. “A growing number of clients are interested in impact investing and sustainable finance, so we are expanding our value proposition,” says Santander’s Castillo.

To succeed in increasingly volatile financial markets, private banks are placing services and more holistic planning at the core of their offering, seeing them as the best way to maintain customer loyalty. “Holistic practices breed healthier and stickier client relationships and avoid getting caught up in unprofitable and unsustainable price wars,” says Okby. This new focus is driving deeper change in private banks’ internal business model. “Advisers are increasingly being guided by product specialists and/or technology platforms when it comes to selecting the right mix of products and services for the client,” Okby adds.

Meanwhile, technology has grown into a full-out arms race for private banks. The institutions that are able to maintain above-average liquidity are likely to come out on top in the long run. Moreover, the arrival of new technologies—particularly AI—is likely to have a significant impact on the industry over the next decade. According to PwC, over 90% of asset managers already employ disruptive technologies such as AI, big data, and blockchain. PwC predicts robo-advisers will be managing $5.9 trillion in assets by 2027, more than twice last year’s total of $2.5 trillion.

“Our millennial customers want a seamless digital experience from the moment they sign up with us to when they place trades,” says Liu. “The advancements of artificial intelligence may create interesting possibilities here.”

Private bankers expect these tools will help them tailor solutions even more individually than in the past, deepening the holistic planning model. “It will be like having a private bank per each individual,” says Lou Steinberg, founder and managing partner at CTM Insights. “This will likely create even closer adviser-to-customer relationships.”

Regardless of evolving market conditions, the victorious will be those that can cater most closely to the long-term needs of their top-tier clients, Liu predicts: “Our mission is to serve ultrahigh net worth individuals and their families to preserve and grow their wealth for generations to come.

That, of course, is private banking’s traditional goal.

Global Finance staff select winners for these awards based on entries submitted by banks, company documents and public filings. We consider local market knowledge, global footprint and investment breadth and sophistication. Because metrics are rarely public in this sensitive corner of finance, we incorporate perspective from analysts and consultants. Performance data are also drawn from industry sources such as Scorpio Partnership’s annual Global Private Banking Benchmark. Size and growth are a factor, but Global Finance also considers creativity, uniqueness of offering and dedication to private banking as a core business either globally or regionally.