During 2015, Otkritie Financial Corporation Banking Group focused its Private Banking strategy on preserving clients’ investments with the aim of distributing assets across financial instruments to match individual client profiles. Special attention was given to currency and country diversification of the clients’ portfolios. This approach helped to keep the clients’ investments safe despite the turbulent macroeconomic environment.
In 2015, the Group launched two strategically important projects: the boutique M&A Private Banking initiative, and a range of socially-oriented investment products.
M&A Private Banking
M&A Private Banking is a boutique which provides the Private Banking clients with access to direct investment opportunities in the real segments of the economy.
Socially-Oriented Investment Products
Socially responsible investing offers a vehicle for investing in income-generating instruments, while contributing to social advancement and making the world a better place. Such products involves investments in improving the environment and promoting pharmaceutical research. In selecting the investment tools, attention was paid not only to conventional economic ratios, such as risk to income, but also to ethical considerations. The socially-oriented investment products line of Otkritie Financial Corporation Banking Group includes mutual investment funds, structured strategies, and life insurance solutions. In terms of industry, the socially-oriented investment portfolio is dominated by biotech and medicine.
In 2015, the efforts in the Private Banking segment were focused on building strategies denominated in foreign currencies, primarily in U.S. dollars. The priority was to put together diversified investment portfolios with a focus on capital protection. Average return on client portfolios developed with the support of Private Banking investment advisors was between 8% and 12% per annum in U.S. dollars. The Group partnered with new issuers, adding their instruments to the proposal, thus managing the exposure and reducing overall portfolio risk.
Another priority was building relations with reputable international partners. The clients have access to investment strategies from major global banks with at least an “A” rating by Fitch Agency. In 2015, the Group launched 29 strategies, and most of these generated return in line with original expectations.
Legal and Tax Advice
Given rapid developments in the Russian legislation, especially in terms of taxation, the Private Banking division regularly holds round tables and arranges one-on-one consultations for its clients with the best market experts. The Group focused on taxation of transactions involving foreign accounts, capital amnesty, de-offshorisation, and foreign companies.
To handle M&A projects, the Group builds an M&A investment boutique. This boutique gives the Private Banking clients access to M&A opportunities offered by Otkritie Financial Corporation Bank’s clientele. This initiative will help the customers to find investment targets or investors without turning to the market.
Otkritie Private Banking offers its clients preferred access to exclusive offers from more than 200 companies operating in the premium service market such as investment in real estate, both in Russia and abroad, immigration and citizenship planning, art investing, education abroad, etc.
Private Banking offices provide a space for displaying paintings and artworks, and hosting exhibitions. Over the year, the Group arranged 15 exhibitions of famous artists, such as Ekaterina Vorona, Aron Buch, Viktor Dynnikov, the Totibadze brothers, and others.
In 2016, Otkritie Private Banking was among the top 10 in Euromoney’s Private Banking Russia Survey for the second year in a row, significantly improving its position. Global Banking & Finance Review named Otkritie Private Banking the best in Russia for the second consecutive year.
The key objectives of Private Banking for 2016 include:
- to streamline business process in order to improve customer experience;
- to extend client base;
- to launch Private Banking areas in Rostov, Tyumen, Khanty-Mansiysk, Volgograd, Perm, Irkutsk, and Kaliningrad;
- to open a Private Banking flagship office in Moscow.