The private banking market - France (2025)

1.2 Global private banking market

The global private banking market has been on the rise for several years and is expected to grow at a rate of almost **.*% between **** and **** , as shown in the graph below.

Global private banking market size World, ****-****, in $ billions Source: ****

Private banking customers are high net worth individuals, also known as HNWIs.

Moreover, despite heavier regulation, volume is growing, and the number of high net worth (***) customers is on the rise, as the graph below shows, with almost ** million HNWIs worldwide in ****.

HNWI health population (***) World, ****-****, in thousands of people Source: ****

The value of HNWI assets is also rising steadily, reaching nearly $** trillion by ****.

HNWI wealth World, ****-****, in US$ bn Source: ****

We can also analyze the asset mix of the world's wealthy population, noting that most assets are cash, cash equivalents orequity.

Asset mix of the rich population worldwide World, ****, in Source: ****

Let's now analyze the different dynamics at regional level.

on a global scale, HNWIs are mainly concentrated in North America and Asia, which makes North America, as we shall see below, one of the world's most important markets for HNWIs, one of the world's most important markets for wealth management, and for Asia, a market with ...

1.3 National private banking market

To get an idea of the size of the French private banking market, we can analyze the figures for the assets under management of France's leading private banks.

Assets under management by major private banks France, ****, in billions of euros Source: ****

2.1 A structurally buoyant market

Recent developments in the financial environment represent a real boon for the private banking market. Indeed, the latter is structurally buoyant.

Inflationary pressures and the resulting erosion of capital are prompting savers - both large and small - to turn to financial infrastructures such as banks for advice on new ways of investing to preserve their wealth.

inflation rate trends in France France, ****-****, in Source: ****

In addition, successive rises in interest rates have led banks to be increasingly cautious in their financing policies. This situation has led to the emergence of alternative players, raising capital from private individuals to invest in projects considered too risky by the banking world.

ECB key interest rate trend France, ****-****, in Source: ****

Borrowing rates from banks also play a real role in the savings capacity of French high net worth individuals.

Let's now take a look at how rising interest rates and inflation haveinfluenced the savings behavior of private bank customers.

Influence on savings behavior of private bank customers France, ****, in Source: ****

Otherrecent events have also had an impact on savings behavior.

elements influencing French savings behavior France, ****, in Source: ****

The current economic climate has undeniably made wealthier French people, such as private bank ...

2.2 helped by a growing pool of affluent savers

The world of private banking is also benefiting from a growing pool of affluent savers, particularly with the rise of the start-up nation.

With *.** million millionaires in France, the country ranks third in the world in terms of the number of millionaires. And this number is set to continue rising.

number of millionaires in France France, ****-****, in numbers Source: ****

Similarly, the number of households subject to the real estate wealth tax (***) rose by *% between **** and ****.

Growth in the number of households subject to the real estate wealth tax (***) France, ****-****, in number of households Source: ****

The wealth of affluent householdshas also increased, favoring the use of private banks. Thus, in ****, the **% most affluent households owned almost **.*% of total household wealth .

According to theINSEE publication Revenus et patrimoine des ménages édition ****, based on **** data, total French net wealth amounted to**,*** billion euros. Net wealth is the total amount of assets held by a household (***) from which is deducted the amount of capital it still owes in respect of its contracted loans.

In the graph below, we can see the differences in the distribution of net wealth between different groups of households in France decile has almost **.*% of total net ...

2.3 The habits of private bank customers

Let's take a look at the consumption, savings and investment habits of private bank customers.

Below, we analyze the priority criteria that influence the investment choices of affluent customers.

Criteria influencing investment choices for the French France, ****, in Source: ****

Let's now look at the five types of investment perceived as most relevant by the wealthiest French. They are polarized between real estate, equities and euro funds.

Types of investment most relevant to private bank customers France, ****, in Source: ****

Other types of investment are also in demand, as the chart below shows.

Most relevant types of investment for private bank customers France, ****, in Source: ****

2.4 The expectations of private bank customers

In private banking, the role of the advisor is paramount, and has become increasingly important, particularly in terms of information transmission, as shown in the graph below.

Criteria for private bank customers' wishes France, ****, in Source: ****

Moreover, the current context has also made private banking customers more aware of the real impact and CSR dimension of their investments, as shown in the graph below.

Expectations of private bank customers regarding the CSR context France, ****, in Source: ****

3.1 Private banking services

Private banks offer many advantages and exclusive services to their customers, as shown in the chart below.

Private bank services France, ****, in Source: ****

private banks offer basic banking services (***) and a range of wealth management services such as [***]:

Traditional investment envelopes: securities account, life insurance, PEA, PER... The rule is open architecture, giving access to all funds on the market and not just those managed by the company as in retail banking. High-performance financial investments, including offerings not accessible to the general public: private equity, structured products, hedge funds, etc. General advice on wealth management from the bank's wealth engineers, who can help, for example, with succession planning or business transfers. Access to private markets: art, aircraft, yachts, used collector's cars, etc. Financing, even in situations that network banks cannot handle (***) Expertise in insurance, provident schemes, social protection, etc. The feeling of being "part of a club" (***)

3.2 An increasingly competitive market

The private banking market is characterized by strong competition between major banking groups, independent players and digital start-ups. The major groups, such as Crédit Agricole and Société Générale, use their financial strength and international network to attract and serve a diversified customer base .

Independent private banksemphasize personalized management and greater responsiveness thanks to dedicated advisors.

The private banking market is undergoing a transformation in its competitive landscape. Traditionally, independent private banks have worked alongside wealth management advisors.

However, major banking groups have also entered the market. Examples include Crédit Agricole with its Indosuez subsidiary, Crédit Mutuel with Banque Transatlantique, and HSBC and Bred (***) with their Private Banking divisions.

Insurance companies such as Axa and Swiss Life are also present in the market.

Investment players are also seeking to position themselves.Debt funds such as Apollo, Blackstone and Caryle are diversifying their sources of financing.

The world of private banking is also seeing the emergence of start-ups with a strong focus on digital technology (***).

The arrival of all these new players stems from a desire to take advantage of a growing market and shake up the positions of the incumbent players.

Focus on the generalist model ...

3.3 Private banking and external growth

The private banking market is subject to a number of external growth operations, enabling players already present in the market to strengthen their position within the industry.

Some recent transactions are listed below :

3.4 Private banking value chain

Below, you can see the value chain of private banking in France, with the different actions carried out by private bankers on a daily basis:

4.1 Types of private banking offer

There are two types of establishment:

private banks affiliated to a generalist network banks ***% specialized in this sector and/or family office (***).

Private banks affiliated to a generalist network are more accessible than specialized structures.the entry ticket starts at around *** to ***,*** euros, and for this price, customers have access to private banking and wealth management advisors recruited at the right level.

Some insurance companies (***) are also active in this niche.

Specialized private banks

Specialized banks (***). at this level of wealth, customers benefit from the advice of private bankers and wealth engineering specialists.

4.2 Trends in private banking offerings

Two different strategic approaches are driving the private banking market in France: differentiation and democratization.

Standardizing and democratizing the private banking offering

Entrusting the management of one's wealth to a private bank is usually perceived as a matter for the wealthy. Service levels, availability and confidentiality are all arguments in favor of a premium service. The minimum entry ticket is several hundred thousand euros, if not several million.

However, there have been several moves in the opposite direction.

Some players have moved away from customized management towards a more standardized offering, facilitating management processes and economies of scale.

A desire to reach out to a wider clientele has also led to a lowering of the minimum asset requirement, a move away from the exclusivity typical of wealth management.

In the United States, Blackstone has opened its offer to individuals with assets and annual income of around $**,***, with an entry fee of $*,***.

The blege Delen private bank also followed this strategy. By the end of ****, it had ** billion in assets under management, including ** billion in Belgium. Delen has doubled in size in ten years. This development is based on targeting a broader customer base than most traditional players in the sector. Half ...

4.3 The impact of digital technology on private banking

Digitization is transforming the private banking sector, with hybrid or fully digital offerings that meet the expectations of a younger, tech-savvy clientele.

Examples include

Société Générale's Private Banking branch has developed digital tools to facilitate exchanges. For example, Kwipper, a software package dedicated to wealth management, is used by advisors to help analyze assets and simplify transmission to their customers via graphics, visuals and a more pedagogical approach. LCL implements a hybridization strategy between digital and face-to-face exchanges. Belgian bank CBC offers the Digital Private Banking solution, which provides completely remote management with appointments with advisors via videoconferencing.

At the same time, new players in the private banking sector, such as start-ups, are seeking to position themselves among younger customers who are comfortable with digital technology and have somewhat smaller assets than the usual private bank clients.

Start-up Colbr, for example, targets high-income tech entrepreneurs and employees. It sets its entry ticket at around ***,*** euros. Its wealth management solution connects all customer accounts and, on this basis, carries out analyses to provide personalized recommendations.

What's more, some of these are used to help wealth management advisors, like start-up Libertify, founded in ****. It targets private banks and wealth management ...

5.1 Current economic policies

In addition to tax measures on development capital from ****, a policy favorable to private banking activity was pursued, particularly following the referendum on the United Kingdom's exit from the European Union (***).

Indeed, France sought to take advantage of the Brexit to strengthen the Paris financial center. Efforts were made to attract foreign financial institutions, such as the Choose Paris initiative, which made it easier for companies to set up in Paris, while financial players based in London could no longer obtain the "European passport" required for financial activities on the continent.

This policy was continued in **** with the Financial Attractiveness Act, which introduced a number of measures to boost business in this area. Share splits enable investors to commit smaller amounts, improving market liquidity.

The authorization of shares with multiple voting rights should encourage some entrepreneurs to list their company in Paris, to avoid excessive dilution of their equity stake.

Private equity funds will also be able to invest in companies valued at up to *** million euros, compared with *** million euros previously.

The digitization of trade finance activities is also a measure to make this market segment more fluid.

Passed in ****, the Pacte law introduced measures to diversify investments relating to ...