Private banks say: "now is the time to grow"

By Lisa Jucca

GENEVA (Reuters) - As the ongoing market crisis reshapes the global financial landscape, private banks with cash to spare are eyeing up takeover targets at rock-bottom prices.

Banks and dedicated offices catering for the rich mushroomed in the years before the credit crisis, as bankers sought to capture the immense wealth generated in fast-growing markets such as Asia, Russia and the Middle East.

But the sector now appears to be over-fragmented, offering those who think they can manage the storm opportunities to expand, executives said.

"I think now we're coming to the moment of truth in the market and I'm sure we'll see fascinating things," Boris Collardi, chief operating officer of the Swiss bank Julius Baer (BAER.VX: Quote, Profile, Research, Stock Buzz) told the Reuters Wealth Management Summit.

The fast-moving banking consolidation wave that started off in the United States after the collapse of Lehman Brothers is thought to be approaching Europe.

"There will be consolidation opportunities," said Collardi, who said his bank sees itself as consolidator and has benefited from client net inflows in the current crisis. "I expect a lot more to happen over the next few weeks."

The merger wave has so far affected banks that have been hit by troubled investment banking operations. But takeover action specific to private banking is expected to follow shortly.

"There will be a redistribution of players, a concentration of players and a restructuring of players," said Pierre Baer, who heads Societe Generale's private bank in Singapore and South Asia. "We think we stand to benefit from that and we will be looking to make acquisitions. Now is the time for us to grow."

ING (ING.AS: Quote, Profile, Research, Stock Buzz), one of world's largest savings banks thanks to its profitable on-line business, did not rule out that it could get involved.

"Private banking is a very, very fragmented business," said ING Deputy CEO Bernard Coucke. "We look at all opportunities.

Smaller players that have not seen large write-downs on toxic assets were also gearing up for an acquisition frenzy that would downsize an over-populated bank segment.

"One or two years down the road, the business of some will be much less attractive. In the asset management industry as a whole there are too many offerings. You could easily cut in half these offerings," said Christophe Bernard, Managing Director at unlisted Union Bancaire Privee, adding that the likelihood his bank would be a consolidator was "pretty high."

(For summit blog: summitnotebook.reuters.com/)

(Editing by Jon Loades-Carter)