Private banks face shrinking margins amid consolidation

Private banks face falling margins and weaker client loyalty as wealthy clients diversify across firms, while access to crypto and private markets remains limited, according to Anglo-Suisse Capital.

The report, Too Rich, Too Thin? Richer Clients, Thinner Margins, sets out an uncomfortable contradiction at the heart of wealth management. High-net-worth wealth reached a record $98.3 trillion in 2025 while the European private banking revenue margin fell from 76 basis points in 2024 to 73 in 2025.

At the same time, wealthy clients are spreading their money across more firms. Only 19% of high net worth clients used a single wealth firm in 2025 against 39% in 2019.

Drawing on industry research, regulators' data, company filings and its own census of 270 private banks in nine booking centres, Anglo-Suisse Capital sets out ten things every board of a private bank or wealth manager should know: five findings, each with a prediction, and five challenges for 2026.

Five findings

Hong Kong has overtaken Switzerland in cross-border wealth. Hong Kong's cross-border wealth passed Switzerland's in 2025: $2.95 trillion against $2.94 trillion. Anglo-Suisse Capital predicts that Hong Kong's lead widens in 2026.

Clients are spreading their money across more firms. The share of clients using a single firm has fallen from 39% to 19%. The report predicts that the share stays below one in five and that firms will buy clients rather than win them.

Clients want crypto but it remains largely absent from private banking. Of the 270 private banks, public information shows 19 offering clients direct crypto and 10 of those use a partner. The United States is outside the census but Morgan Stanley, Charles Schwab and PNC now let clients buy and hold tokens. The report predicts that partnering stays the main route and that more crypto firms buy licensed banks than banks buy crypto firms. It also predicts at least one more large private bank offering direct tokens by the end of 2027.

Fewer, bigger private banks. KPMG counted 79 Swiss private banks in 2026 against 156 in 2010. The report predicts fewer than 75 by the end of 2027. KPMG found 32 banks with cost-income ratios of 80% or more, 18 of them above 90%.

Each billion of assets earns less. The European private banking revenue margin fell from 76 basis points in 2024 to 73 in 2025. The report predicts that margins keep falling and that the winners will cut costs and free advisers' time with AI.

Five challenges for 2026

The report also sets out the five challenges that recur in industry studies for 2026: margins and productivity; clients, heirs and private markets; technology, data and AI; regulation, compliance and sanctions; scale, consolidation and talent.

On private markets, public information shows 50 of the 270 private banks offering clients direct deals or co-investments and a further 122 offering funds only. On AI, Bank of Singapore cut the time to write a source-of-wealth report from 10 days to one hour yet 76% of Swiss private banks expect AI to bring no or minor cost savings in the next year.

An industry at a strategic crossroads

Charles Hancock, Chief Executive of Anglo-Suisse Capital, said: "Private clients have never been richer. Yet they spread their money across more firms; banks earn less on it.

"Banks have made progress in private markets: 172 of the 270 private banks we reviewed offer some access but only 50 offer direct deals. There is a long way to go.

"Crypto is becoming crucial, not only to win new clients but to stop existing ones leaving. Yet only 19 of those 270 offer it directly. Most banks are not prepared.

"The economics are hardest for smaller institutions. Switzerland has lost almost half its private banks since 2010 and we expect consolidation to continue.

"Every board faces the same question: are we going to be a buyer, a seller or a partner?"

Five predictions to be tested in 2027

Anglo-Suisse Capital makes five predictions concerning Asian wealth, client loyalty, crypto, consolidation and revenue margins. It will mark them in its 2027 edition, right or wrong.

The 39-page report also includes two decision tools for boards: a decision template for crypto (rent, buy or build) and a checklist for deciding whether to buy, sell or stay independent.

 Re-disseminated by Wealth and Society