ABN Amro has agreed to sell its Swiss private banking operation to Union Bancaire Privée . The deal marks the first stage of long-expected consolidation in the Swiss private banking industry that had been prompted by the financial crisis but stalled by regulatory uncertainties.
Geneva-based UBP, one of Switzerland’s most dynamic private banks, and Netherlands-based ABN Amro declined to reveal a price. The subsidiary had assets of about €11bn ($15bn) at the end of the first quarter and 350 employees.
Close observers of the private banking industry believe that the bank changed hands for 1-2 per cent of assets under management – or €110m-€220m. The total price would have been higher, as it would include capital.
The ABN Amro group was bought by Royal Bank of Scotland, Banco Santander and Fortis just before the financial crisis in 2008 and has been largely split up. But some of it, including the Swiss private bank, continues to trade independently under Dutch government ownership.
ABN Amro said the Swiss private bank had clients from about 100 countries and offices in four Swiss cities.
The deal will add about 20 per cent to UBP’s total assets under management and expand the core Swiss private banking operation. Controlled by the founding de Picciotto family, UBP had about 1,200 employees and SFr60.7bn ($77bn) in assets under management at end of June.
The transaction marks a significant comeback for UBP, a pioneer in the fund of hedge funds business, which saw massive client withdrawals after the Madoff affair.
“We are very pleased with this transaction which adds scale to our domestic platform”, said Guy de Picciotto, chief executive.
ABN Amro said it remained committed to private banking, but would concentrate on the eurozone and Asia.
“We concluded that in the fast changing and consolidating Swiss private banking market the transfer of our activities to a leading Swiss private bank would be in the best interest of our clients as well as staff”, said Jeroen Rijpkema, ABN Amro’s chief executive of international private banking.
The operation is believed to have been up for sale for some months, with the auction intensifying in the past week.
Further consolidation is widely expected in Swiss private banking, given greater clarity about the future of bank secrecy. Last week, Bern reached a landmark tax deal with Berlin – an agreement expected to be replicated with London shortly.
Attention will switch to Sarasin, the Swiss private bank owned by Rabobank, the Netherlands-based co-operative banking group. Preliminary sale talks have taken place, but a deal has stalled and may no longer be likely in the short term.
ABN Amro was advised by JPMorgan. Banca Leonardo and Caurus Partner, a French research and advisory boutique, advised UBP.
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