The market for private banking and wealth management in Russia is to soar by up to 50 per cent per year over the next few years, according t...

The market for private banking and wealth management in Russia is to soar by up to 50 per cent per year over the next few years, according to a report by PriceWaterhouseCoopers. Some $10 billion to $12 billion in personal wealth is currently being managed by private banks onshore and that number will grow by 30 per cent to 50 per cent per year, said the report. The survey involved interviews with 18 players in the private banking industry. Of those, thirteen currently offer wealth management services in Russia and count among the major participants that make up 70 per cent of the market. Only four participants in the PwC survey said they had a wealth management portfolio of over $1 billion. Four more have portfolios worth between $500 million and $999 million and five have between $100 million and $499 million in wealthy clients' funds. The minimum wealth requirement for private banking services at five of the surveyed banks is $100,000; it's $500,000 at another five banks; and around $1 million at two banks covered by the survey. Many respondents noted a trend of increasingly higher minimum thresholds for private wealth management services, soon expected to range between $250,000 and $300,000. PwC said the market does not exceed 10,000 client accounts and only two banks have portfolios with over 1,000 accounts. The majority of wealth managers reported a growth in the level of funds under management in 2005 from between 60 per cent to 100 per cent. The report said competition for staff is fierce with not enough qualified candidates to fill the glut of job openings. Ekaterina Lazorina, a partner at PwC in Russia, said: "The stable economy and general rise in Russians' personal wealth cannot fail to attract the attention of the private banking/wealth management industry. You can see it in both the increasing number of Russian banks offering wealth management services and greater investments by the international private banking giants in their Russian operations." The leading players in Russian private banking are Raiffisen, Uralsbib, Citigroup and Deutsche Bank, which has close to $1 billion in clients assets. UBS is set to enter the onshore market in January next year following the recent launch of services by rival Credit Suisse.