HSBC Private Bank (Suisse) SA, an indirect wholly-owned subsidiary of HSBC Holdings plc, has entered into an agreement to sell a portfolio of its private banking assets in Switzerland (with assets under management of US$12.5bn as at 31 December 2013) to LGT Bank (Switzerland) Ltd, a wholly-owned subsidiary of the LGT Group Foundation.
The transaction, which is subject to regulatory and other approvals, is expected to complete in the last quarter of 2014 and it represents further progress in the execution of HSBC’s strategy.
HSBC remains fully committed to Switzerland as a key international centre for its Global Private Banking business and a priority market for the Group.
The number of customers served by the private bank in Switzerland would be reduced from around 150 countries to about 70. The sale follows a strategic business review by HSBC which has seen it shed a number of businesses globally as it seeks to concentrate its growth on a focused group of markets.
Upon closing, the acquired business will be integrated into LGT Bank (Switzerland), which had assets under management of SFr21.0 billion ($23.5 billion) at the end of 2013.
HSBC and LGT said that around 70 HSBC employees will transfer as part of the deal. The deal includes assets from a number of regions, including Central and Eastern Europe, Latin America and Western Europe. A smaller part of the portfolio relates to clients advised by Swiss-based external asset managers.
The move is also a sign of continued busy M&A activity in the European wealth management arena, including Switzerland, as firms look to sell businesses that have become unprofitable. Barclays and Morgan Stanley have made similar movements in the last months.