BANKPRIVAT, a leading Austrian private bank which is part of the German HVB Group, is 'uniquely' placed in the healthily growing private banking market in Austria for onshore and offshore investors, according to Gordian Gudenus, a board member. A central tenet of the bank's philosophy is to service clients following the principle of best advice and best selection, Gudenus pointed out. "We are well positioned in the market because we combine the best of two worlds. BANKPRIVAT is the only private bank combining the advantage of a small independent private bank and the security and branch network of a major European bank," he added. Furthermore, BANKPRIVAT, unlike many of its domestic competitors, focuses exclusively on catering for wealthy private clients and not the mass-wealth market. Unusually for an Austrian bank, it also focuses on the international market, which accounts for an important part of its client base. "Unlike many of our competitors, we are completely independent," Gudenus stressed. BANKPRIVAT came into existence in May 2000 by merging the private banking units of Bank Austria and Creditanstalt. Today, BANKPRIVAT is a wholly-owned subsidiary of Bank Austria Creditanstalt, and reports to its parent but is 'autonomous' and develops its own strategy, Gudenus noted. The merger of the two Austrian banks presented the opportunity to create a new private bank named BANKPRIVAT, with its own distinct philosophy and identity. Moreover, its creation avoided a number of the sticky problems that arise when two different private banks, each with their own culture and management team, are merged. The corporate philosophy of BANKPRIVAT, which owns no products, rests on four pillars. First, on the relationship management side, a client consults with one person — his or her personal relationship manager — who serves only a handful of clients and is responsible for the client's investment portfolio. Second, a personal investment strategy is developed and tailored to meet the client's individual needs. Third, the bank operates on the principle of independence, within which it offers best advice and best selection. It maintains it has no preferences whatsoever in the selection of investment products. Quality and performance are the only factors that count, in accordance with a client's individual objectives. Fourth, the bank takes the view that it offers international clients the unique advantages of using Austria as the basis for offshore and onshore investment. Moreover, clients benefit from the group's international network of more than 1,000 outlets worldwide. Clients resident in Austria usually need a minimum of €1m of investable assets; non-residents need a minimum €500,000 of investable assets. Its total assets under management amount to more than €4bn. It claims to be the largest player in its field in the Austrian market. Interestingly, the asset management company within the Bank Austria Creditanstalt group provides the investment management input for clients on a discretionary basis. The group though, in accordance with the best advice and best selection principle, only provides a small portion of products clients use, pointed out Helene Pusswald, marketing director at BANKPRIVAT. The bank's head office is in Vienna, where it employs around 70 people. At the start of this year it began to spread its operations into different regions and now has nine offices. Previously, relationship managers travelled to these regions to see their clients. The strategy to develop a strong regional presence reflects increasing competition from both Austrian private banks and foreigners to win new clients. "Everyone is fighting much harder to win new business. The foreign banks are also trying to get more business from the regions, especially in the Salzburg region," Pusswald said. Competitive pressure is also rising because more banks are claiming to be private banks — even if strictly speaking they are not — in order to target the top end of the wealth market, Pusswald added. This year Sal. Oppenheim, the German private bank, was a new entrant in the Austrian market. Merrill Lynch exited the market this year. BANKPRIVAT's target market in Austria is around 30,000 people. In recent years this top end of the market's total wealth has been expanding by around ten to 15 per cent per annum, Pusswald estimated. The legal and accounting professions are a major source of business. It also gets a lot of new business by targeting the more affluent end of the group's customer base of around two million people in Austria. "We do not do any classic advertising," Pusswald said. "But we do produce and send a magazine to people in our target market, three to four times a year. The magazine, which covers topics such as art and wine, is an important marketing tool," she added. An enhanced internet service for clients will be launched at the end of this year. The internet service is going to become more important for non-resident clients, Pusswald noted. Offshore clients who want personal service are catered for by a number of specialist relationship managers who travel abroad to see them on a regular basis. The group's worldwide branch network can be used by the consultants as a service centre. Austria has similar private banking laws to Switzerland, Gudenus pointed out. "We do not expect any changes with regards to our banking secrecy laws in the near future, but the tax harmonisation process in the EU might bring changes in the medium term," he said. The group is one of the largest players in the Central and Eastern European banking market. BANKPRIVAT does have clients in this region, although at present it has no office there. "There is a growing amount of business from the CEE, also as a result of the liberalisation of investment restrictions in a number of CEE countries," Gudenus said.