Wealth management consolidation stalls

By Thomas Atkins

GENEVA (Reuters) - Consolidation may have taken off in European banking but will likely leave the specialized world of wealth management -- exclusive banking for the rich -- standing still, bankers and industry experts say.

High prices and poor-quality assets have kept buyers on the sidelines and bankers now predict, in sharp contrast to previous years, that wealth management may prove immune to the pressures that have driven consolidation elsewhere in financial services.

Even Citigroup (C.N: Quote, Profile, Research, Stock Buzz), whose private bank ranks number two worldwide by assets, has abandoned its bullish takeover rhetoric and will focus now on organic expansion, according to Samir Raslan, head of private banking in various key emerging markets.

"We will always be open for any opportunities but we will continue to focus on organic growth and building our business in a very serious and controlled environment," Raslan said at the Reuters Wealth Management Summit.

Prices for wealth management assets are at a five- to six-year cyclical peak, experts say, the ideal time to sell from the seller's point of view but a bit off-putting for buyers.

Once you add the peculiarities of the rich -- some bankers refuse to abandon ship, even if their client base is shrinking -- and concerns about transparency, then the overall picture of consolidation in wealth management looks fairly bleak.

Only two years ago, experts thought consolidation would sweep the hundreds of privately owned specialist banks that dot Switzerland's mountainsides and the back streets of London's City financial district, as regulatory costs rose and global scale became more important.

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