Exclusive outtakes from industry leaders
While wealthy clients remain ultra-cautious about real estate, some are being tempted to snap up trophy properties that promise to throw off a healthy amount of cash.
On the fringes of the Reuters Global Private Banking Summit, Banco Santander executives said they had been involved in six to eight large real estate transactions including the sale of a Miami marina in this year.
In another deal, a Mexican client snapped up a chunk of distressed commercial real estate in Spain from a seller seeking to cut leverage. The properties were returning more than 6 percent in cash flows, a healthy spread over the buyer’s 4 percent borrowing costs.
More recently Santander private banking unit Banif assisted a client in the sale of the Valderrama golf course in Spain to Australian golfing legend Greg Norman.
Private bankers remain in demand in some key European markets, but they will have to live with lower salaries if they want to continue to be part of this business.
Top wealth managers told the Reuters Global Private Banking summit that they have stopped offering the huge packages seen in the run up to the financial crisis of 2008-2009.
“We are not offering packages that are outlandish. And I do not see the other banks doing that either,” said Samir Raslan, General Manager of Citibank (Switzerland).
Raslan said the structure of banker’s salaries had also changed. Relationship managers who form the backbone of a private bank’s workforce were getting higher fixed salaries than before, but no more huge bonuses.
“We see more rational hiring, rather than aggressive, open cheque-book hiring,” said Raslan.