Some bankers see rich pickings in Latam

GENEVA (Reuters) - While many of the world's wealth managers chase a growth bonanza in Asia and the Middle East, Spanish private bankers believe the richest pickings are to be had in Latin America.

"Over the last few years what we have seen is a substantial change in the macroeconomic stability of the major countries," said Daniel de Fernando, head of asset management and private banking for BBVA (BBVA.MC) at the Reuters Wealth Summit in Geneva.

"Mexico, Brazil, Chile, Peru and even Colombia are undergoing extremely positive, substantial change. That is starting to create a middle class and an affluent market," de Fernando said.

Demand for onshore private banking services in Latin America was starting to grow, despite a traditional penchant among wealthy Latin Americans for keeping much of their money in offshore financial centers, he said.

De Fernando said BBVA was hoping to reap rich benefits in Latin America while many other European banks were more preoccupied with winning clients in Asia and the Middle East, or pursuing traditional offshore business in Latin American.

"I think the region is up for a brilliant future which I think is good for the future of a bank like us," he said. "I think everybody is very focused now, at least in Europe, on Asia and the Middle East. It's another example of how cyclical this business is.

"The Middle East in the 1970s and 1980s was the hotspot where everybody wanted to be ... now everybody is back in the Middle East," he added.

HIGH NET WORTH

Although Spanish banks such as BBVA and its chief domestic rival Santander (SAN.MC) have built up large retail banking networks across the regions, other European banks are starting to show interest.

The number of high net worth individuals -- defined as people with more than $1 million in liquid assets -- in Brazil, the largest country in the region, rose by 10.1 percent to 120,000 between 2005 and 2006, said the annual CapGemini Merrill Lynch wealth report.

That is a higher rate of growth than the United States, Britain, Germany or even China, which saw a 7.8 percent rise in high net worth individuals (HNWI) last year.

"Latin America continued to add to its HNWI population, with Argentina, Brazil, Peru and Chile leading the way," said the report.

Dutch lender ING (ING.AS), which is fast expanding its private banking interests, has sold its business in Argentina and is concentrating its efforts on the region's two biggest economies - Brazil and Mexico.

"We focus now on those two countries ... and I think it's paying off," said Bernard Coucke, head of Europe and deputy global CEO of ING's private banking business.

But much of ING'S Latin American business is still being booked offshore in Switzerland, said Coucke, even though ING has opened an office in Miami.

"Latin American clients understand perhaps the U.S. is not the best base to book for them," he said. "I have the impression those clients want to go away further from the region."