The renowned consulting firm McKinsey recently surveyed all Belgian players in the private banking sector. For this study both the specialized invest banks as well as the specialized departments of large banks were questioned. In Belgium, these institutions combined manage 240 billion euro, which is roughly similar to the Belgian saving accounts. Compared with the crisis of a few years ago, this represents an increase of 100 billion euro.
Best investment through capital banks
We have reached a point where a generation of entrepreneurs seeking for the best investment decides to sell the company. Because of this, in the past year a constant and steady growth of new money has been stated. These ex-entrepreneurs keep their money at private players. A second reason found for growth – in the search for the best investment - is the fact that money is shifted from retail banks to private banks. Thus in 2015, 11 billion fresh money reached capital banks, which is 3 billion more compared to 2014. This is still much less than before the financial crisis, when yearly an average of 15 billion euros was raised through various tax amnesty schemes where dirty money was laundered.
Composition of portfolios
Seventy percent of the total assets transferred to private banks, comprised of portfolios between 500.000 and 10 million euro. This is a remarkable difference compared to other European countries, where such magnitude portfolios make half of the total. In other European markets, portfolios of more than 30 million euro are a quarter of the total assets.
This case study seems to confirm that families are rich and that the state is poor. With all the assets managed by the Belgian private banking sector, one could redeem at one time 60 percent of the Belgian state debt. Whether this would be the best investment is open for discussion.
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