Berlin’s Fintech Wealth Is Attracting at Least One Private Bank
Berlin’s vibrant startup scene is creating a new generation of wealthy entrepreneurs who are increasingly looking for advice on how to manage their money.
One bank that’s trying to capitalize on that demand is locally based Weberbank. While some of Germany’s biggest private banks are forgoing the capital, the 70-year-old company aims to grow its asset under management by 10% a year by tapping into this relatively new source of business.
“The number of wealthy people is rising here. We see plenty of potential,” Chief Executive Officer Klaus Siegers said in an interview. The company has no need to look beyond the city for private-banking clients, he said.
Siegers acknowledged that Berlin has a relatively small number of the kind of small and mid-sized companies that have thrived in other parts of the country, enriching their owners. “However, this gap is increasingly being filled by the startup scene in the city,” Siegers said.
Berlin’s fintech boom has in recent months attracted big-name investors including Goldman Sachs Group Inc. According to a study by EY, startups based in the city received a total of 2.1 billion euros ($2.3 billion) in financing in the first six months of this year alone. Salaries in the fintech industry are rising sharply, the head of Berlin-based investor Finleap said earlier this month.
The city’s newly rich aren’t the only reason why Siegers sees his potential customer base growing. “There are also established wealthy people who are attracted to Berlin’s art and culture and who want to relocate here. And of course, they also need a private bank in Berlin,” he said.
The heads of Frankfurter Bankgesellschaft and Bankhaus Metzler recently declared Berlin unfit to house private banking locations, citing a lack of potential clients. Other companies in the industry, such as Fosun International Ltd.’s Hauck & Aufhaeuser, don’t have a presence in the city either.
Since 2009, Weberbank has been owned by Mittelbrandenburgische Sparkasse. The public-sector lender bought the business from failing WestLB. Weberbank’s private-banking customers have, on average, around 2 million euros of assets, Siegers said, even though there is no set minimum to become a client. The company, which also caters to some institutional investors, has assets under management of about 6.2 billion euros and is profitable.
©2019 Bloomberg L.P.