BBVA dreams up ideas for private bank clients

GENEVA (Reuters) - Private banking tends to have an aura of safe but dull, so BBVA (BBVA.MC) is offering young, newly rich Spanish entrepreneurs something different, from Mexican property to solar power.

BBVA has beefed up its private banking service to cater to hundreds of Spaniards who have shot into the multimillionaire ranks as the country's economy burgeoned over the past decade.

Because many of them are entrepreneurs who have made their own millions rather than inherited family treasures, investors are looking for more interesting opportunities than the portfolios private banks have traditionally offered, said Daniel de Fernando of BBVA.

"Spain has gone through a dramatic change in investment appetite," de Fernando, BBVA's head of asset management and private banking, told the Reuters Wealth Management Summit.

"Investors are looking for innovative products. They're a bit bored with the financial markets or they became active in markets before 2000 and got hit twice and scared off," he said.

BBVA, Spain's second-largest bank, has used its increasing global reach to link up clients and contacts to create new projects.

For example, on a trip to Mexico, where BBVA owns the largest bank, Bancomer, De Fernando was intrigued by the story of how the real estate market was developing.

A trip with clients out to a building site led to a meeting with some private banking clients who guided BBVA in tailoring a product to suit their investment requirements, complete with currency hedging and diversification across the property spectrum.

Within two weeks, 60 people had bought into the fund at a minimum investment of 2.5 million euros each.

REAL ECONOMY PRODUCTS

"People are asking us for more ideas on that front," De Fernando said. "We call them structured entrepreneurial products, real economy products packaged for private clients."

BBVA has also offered private investors "club deals" like buying into photovoltaic plants in Spain and is considering setting up a hotel development and management project.

The bank has 12 billion euros of assets under management in Spain, where local consultancy Tatum reckons the overall private banking market is worth 223 billion euros.

BBVA is also boosting its wealth management business in Latin America, where it has banks from Colombia to Chile and where economic growth and the commodities boom has created a new group of super rich.

De Fernando said the strength of BBVA's brand and network meant it was well placed to serve clients with $5 million to $10 million. Clients with more than that tended to opt for big international private banking names.

BBVA has also bought banks in the United States and a stake in Chinese bank CITIC.

De Fernando said BBVA was in talks with CITIC and another group about setting up a private banking venture in Asia while it would wait until the U.S. acquisitions were integrated before thinking of starting a wealth management offering there.

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