The merger between Caixabank and Bankia has boosted the private banking division of the newly created entity, which has led it to climb a position in the managed wealth ranking of private banking entities operating in Spain, ranking first, by in front of Banco Santander.
Thus, and according to data from the entities collected by finanzas.com, Caixabank leads the assets managed in private banking by reaching 123,000 million euros, from the 88,190 with which it closed 2020, 80,810 million from Caixabank and 7,380 million from Bankia.
For its part, the latest figures provided by Banco Santander indicate that its managed assets are 110,000 million euros, which leads it to occupy the second position, ahead of BBVA, with 77,000 million.
Both entities will disclose their total assets managed during 2021 at the beginning of next year, so the positions in the ranking could change again.
“The new demands of the directive of markets propitiate the concentration of the sector”
José María Alcañiz, professor at the Center for Financial Studies
The comeback continues
Caixabank’s rise to one position this year comes after the entity surpassed BBVA in 2020, going from third to second, managing a capital of 88,190 million euros. For its part, Bankia closed last year in thirteenth place, with 7,380 million.
After the three large banks, the fourth place in the 2020 ranking was held by Bankinter Banca Privada, with a net worth of more than 42,800 million, followed by Sabadell Urquijo Banca Privada with 27,910 million.
The sixth place went to UBS, which had a managed capital of 21,740 million euros.
This position has changed this year following the purchase of Singular Bank from UBS of its private banking business in Spain to create the largest independent private banking entity in the Spanish market with a managed assets of close to 20,000 million euros.
A highly coveted market
This purchase shows the interest of large banks and independent entities in private banking in Spain and their commitment to gain muscle in a business that closed 2020 with a wealth under management of 553,000 million euros and that has more than 520,000 clients .
The reasons behind this ‘readjustment’ process derive from the need for institutions to gain critical mass in order to meet their capital and technology requirements and be profitable in the long term.
“The current development of private banking is scarce in Spain compared to other markets”
Jesús Reglero, teacher at OBS School
The entry into force of MIFID II has also prompted them to go shopping. “The demands of the directive of markets propitiate the concentration of the sector”, maintains José María Alcañiz, professor of the Center of Financial Studies.
It considers that, mainly, “small entities are going to have difficulties in complying with the whole range of regulatory requirements because a high volume of managed assets is required to cover costs”.
A bank with a lot of potential
The enormous potential of private banking in Spain is another reason that drives large banks to strengthen this division.
This is recognized by Jesús Reglero, a professor at OBS School, for whom “its current level of development is low compared to other markets.”
All these causes will make the process of concentration of private banking continue in Spain in the short and medium term. “The consolidation trend of private banking is going to increase,” acknowledges Jorge Coca.
In his opinion, “it is very difficult to maintain high quality standards in the provision of advisory services in private banking without a minimum size. This makes size matter in private banking.”