Quintet Private Bank on 28 March 2024 announced its annual results for 2023. Full-year net profit has increased to €46.9m (up from ) while total group income has risen to €602.4m (up 15% compared to €524m in 2022).
As of 31 December 2023, total client assets stood at €92bn (a 6% increase compared to €86.7bn at the end of 2022). Quintet’s expenses stood at €522.1m (compared to €493.2m in 2022), while its cost-to-income ratio was at 86.7% (compared to 94.1% the year before).
What’s responsible for these positive results?
For , group CEO of Quintet, it’s partly thanks to the “strategic refresh” that was launched at the beginning of 2023. That included “making ourselves more efficient” and aiming to drive better long-term outcomes, Allen explained to Delano during an interview on 27 March ahead of the bank’s announcement. Quintet in 2023 grew its client base and “saw a meaningful increase in the revenue line, also helped by a favourable interest rate environment.”
In addition, despite a “high-inflation environment, we managed our cost base extremely well,” Allen added. “We had sort of the positive ‘jaws’ of a growing revenue line and a heavily controlled cost line, which then obviously had a positive impact on the profitability.”
International presence
Established in Luxembourg in 1949, Quintet has a “history of being a banking group composed of local actors in the wealth management business that are very closely intertwined into local communities, the wealth communities in all the countries where we operate,” noted , group CFO. Besides the grand duchy, Quintet is present in the UK, the Netherlands, Germany, Belgium and Denmark. “That’s a strong point on which we build to grow.”
“But it’s also offering us the opportunity to integrate more behind the scenes--to do things in one place instead of five different places, do them in an integrated manner, so that we capture the benefit of the total size of Quintet. And that’s one of the levers we’re pulling in many, many areas to keep that cost flat whilst we grow.” This is an important part of their strategy, said Harvey.
Boosting efficiency with “process harmonisation”
“One of the key parts of our strategy refresh and transformation is centred around process harmonisation,” said Allen. Besides “starting to do the same thing, the same way, everywhere,” this also involves creating a “best-in-class practice for each process.”
Not only do we standardise, but we also rationalise and improve
“Not only do we standardise, but we also rationalise and improve. It’s an ongoing exercise that I think will be with us continually, will evolve as technology changes and as we find new ways to bring automation and technology into some or all of the parts of key processes,” said Allen. There are some 1,650 employees across Quintet, and getting them to think about “one organisation” is a “critical part of our future success.”
And “once we harmonise, we’re then able to do things once instead of five, slightly different ways, which means that we get that benefit of scale in each of those processes as we link them up across the entities,” Harvey emphasised.
What sets Quintet apart
Quintet is “deeply embedded” into each of its different markets, said Allen. “With our office network, we have a proximity to the clients.” And “compared to some of our competitors, we’re quite a small organisation,” which “allows us to operate slightly differently from some of the bigger banks.”
One of the most valuable offerings is the “time” that teams can spend with their clients, he argued. We’ll see the “single largest transfer of wealth between generations across Europe over the next 10 to 20 years,” said Allen. “And one of the biggest questions we get asked from clients is: can you help me with the generational transfer of wealth?” When talking about educating the next generation, it’s not just young children--these can be children in their 30s, 40s, 50s and even 60s.
Time, therefore, is valuable and “a unique service proposition,” said Allen. “We devote time to our clients when they need us most.” Creating the opportunities for client-facing teams to spend time with their clients, as well as providing partnerships with firms like Blackrock and Moonfare, are key contributors to Quintet’s market proposition.
More tools
The private bank in July 2023 announced that it had entered into a , which aims to give Quintet access to a wider range of tools and products. This partnership “allows us as Quintet to retain all of the investment decisions--which is critical from a client’s perspective--but to utilise the might, if you like, those huge resources that Blackrock has to undertake certain activities within the investment process,” explained Allen.
Blackrock, for instance, has the capability to purchase and manage investment units--stocks or funds, for example--more efficiently. “So we will use Blackrock to execute some of those underlying portfolio tasks,” he said. And “as a result of the partnership, we get access to all of their intellectual property, their analysis, their portfolio management and risk management tools that we feed into our asset allocation decisions.”
Increasing access to private markets
And in October, Quintet announced a separate . Private markets and private equity are an important part of private client portfolios and private client thinking, said Allen, and the partnership with Moonfare gives their clients access to private market funds, as well as a platform that clients can be onboarded onto.
This platform “gives the ability to host our own content, and also report on it--directly or digitally--to our clients,” he added. “It’s a unique combination for high-net worth individuals.”
Looking ahead to 2024
Quintet is celebrating its 75th anniversary in the grand duchy this year. Is there anything in particular that Allen is excited about?
“For me, the culmination of a lot of the strategic refresh work--we’re starting to really see some of the benefits come through,” said Allen. And during the second half of 2024, “we’ll really start to see the full benefits of our Blackrock and Moonfare partnerships.”
“I think it’s an exciting time to be an employee of Quintet; I think it’s an exciting time to be a client of Quintet as well. I think our clients are only just starting to see the future of what we can offer them,” concluded Allen. “That’s what makes me come into the office every day.”