Spain used to be one of the PIGS. Along with Portugal, Italy and Greece it was among the southern European economies with high public debt and unemployment, and lousy prospects. But things change.
In 2020 Spain was home to 5,428 UHNWs (those worth $30 million or more), according to Knight Frank’s Wealth Report. That’s a net gain of nine per cent between 2015 and 2020. (The UK saw an eight per cent decline over the same period.) What’s more, the firm expects the number of UHNWs in Spain to have risen by 39 per cent by 2025.
In the same report, it was noted that the 180m superyacht Azzam, belonging to UAE president Sheikh Khalifa bin Zayed Al Nahyan, spent a period moored in Spain during the pandemic. Barcelona is a popular stopover for superyachts travelling between the Mediterranean and the Caribbean. And wherever the wealthy gather, it is only natural for service providers to follow suit.
This may be part of the reason, at least, that Barclays established a private banking arm in Spain for the first time in December 2021, setting up shop in Madrid’s upmarket Almagro neighbourhood. This is despite the fact that Spain still has Patrimonio – a wealth tax targeted at individual assets which the government introduced in response to Spain’s financial crisis in 2011.
‘Spain, I’d like to think about it as a hidden gem,’ says Juan Vilarrasa, the Spaniard at the helm of Barclays’ new private banking operation in the country. Vilarrasa has significant equity markets and corporate finance experience, but is now tasked with serving Barclays’ UHNW private clients.
The bank’s move ‘makes a lot of sense’, says Vilarrasa. Having migrated from Barclays’ London offices to Spain between 2010 and 2016 to start his own business – a wellness app which ‘had nothing to do with banking’ – he understands the environment that local entrepreneurs find themselves in. When his former employers approached him with an offer to return and help build on its existing corporate and investment capabilities in Madrid, he couldn’t say no.
The bank hopes to connect clients of its existing corporate and investment arms in Spain with Vilarrasa’s private banking offering and vice versa. Both, naturally, tend to attract UHNWs and entrepreneurial families and family offices. Barclays’ Spanish exploits are part of a wider plan to increase its private banking presence worldwide. In 2021, it also launched private banking teams in Italy, France and Singapore.
Barclays hasn’t always been this optimistic about Spain. In 2014 it sold off its retail business in Madrid to Barcelona-based CaixaBank. And it hasn’t been the only one to face headwinds in the region. In October 2021, UBS decided to sell its Madrid business to the Spanish Singular Bank.
However, such developments may lead to increased competition. Julius Baer is expanding in Madrid, hiring a number of former UBS bankers in the process. Banco Santander recently picked up an award for being among the top global private banking providers for clients worth up to $250 million.
‘This is a future source of wealth,’ Vilarrasa concludes, noting that there are currently nine private companies with $1 billion dollar valuations in Spain. He is confident that there are 20 more unicorns in the making in the next couple of years.
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