The cost-income ratio of Société Générale Private Banking could fall below what is already below a global average according to some measures if efficiency moves and market rises bear fruit, the head of the business says.

“We have a 75 per cent cost/income ratio, which is probably not the lowest but it is much better than the average [in the industry] and improving, especially if the market will help in the second half of the year,” Daniel Truchi told this publication in a telephone call.

He spoke after the Paris-listed bank issued figures showing that net new assets rose over the first half of 2011 by €3.8 billion, with a gain of €2.1 billion over the second quarter, translating into a 10 per cent annualised rate.

“Compared to our peers, it [the growth rate] is probably the strongest,” Truchi said. "The business is still running at a pretty good pace.”

According to a recent survey by Scorpio Partnership, the consultants, the average cost-income ratio for wealth managers around the world has risen to almost 80 per cent, with regulatory burdens playing a key factor in driving up the cost side of the equation.

Squaring the circle of achieving lower costs and also meeting higher regulatory and customer demands is always a difficult challenge for the industry, Truchi said. That is why Société Générale Private Banking has launched projects to improve operational efficiency and to enhance quality of products and service the client relationship managers offer to clients, he said.

The firm has targeted ultra high net worth clients as a key market segment. There has been debate in the industry of how best to serve what can be a demanding client group able to insist upon institutional pricing of products and services.

“In a way that is true unless you provide them with a global range of services and products. Indeed, aside of our investment capabilities, one of our competitive edges is financial engineering and trust services. In this particular high-end [structuring] area, when it comes to this high level of services and advice, there are not more than two or three competitors in private banking and wealth management business and that are really competitive,” Truchi continued.

“Our penetration of the ultra high net worth market has been pretty successful. We are gaining market share and our share of wallet. The positioning of SGPB towards ultra high net worth business has shown very good results in the first half of the year,” he said.

As for regional focus, Truchi said that the Asia-Pacific region was clearly very important but at present, the private bank was broadly based in terms of where it operates: Middle East, Asia, Western and Eastern Europe, Latin America.

“Our AuM growth is coming from all these regions - it is spread around all over the world. That is probably also another strength of SGPB,” he added.