Union Bancaire Privee (UBP) is buying Lloyds Banking Group's international private banking arm as the British bank sheds assets to shore up capital and the Swiss wealth manager presses on with a recent buying spree.
Privately-owned Geneva-based UBP has made several deals in the last two years as it seeks to rebuild an asset base which almost halved through the financial crisis from a 2007 peak of 135 billion Swiss francs ($138 billion).
The deal, subject to regulatory approvals, will lift UBP's assets under management, which stood at 83.2 billion francs at the end of April, by more than 10 billion francs, the bank said. Terms of the transaction were not disclosed.
Recent acquisitions by UBP include ABN Amro's private banking arm, Paris-based asset manager Nexar and a portfolio of assets from Spanish bank Santander's Swiss asset management arm.
"The acquisition adds more assets in Zurich and Geneva, and allows us to open a booking centre in Monaco, which is a growing centre for tax compliant money, family offices and very high net worth individuals and families," UBP Chief Executive Guy de Picciotto told Reuters.
UBP, which currently has some 1,300 employees, will take over Lloyds' Swiss, Monaco and Gibraltar operations, adding 250 to 500 staff and increasing its asset bases in Zurich and Geneva, as well as in South America and the Middle East.
UBP said it would adapt its workforce to global activities, though it was too early to discuss possible job cuts.
The purchase comes at a time when Switzerland's private banks sweat over the effects of potential deals between Switzerland and governments in the United States and Europe to root out untaxed money from Swiss banks.
"It is true everyone is waiting to see what happens, but meantime there are clients to be served, and I don't see why we shouldn't continue to do manage their assets," said de Picciotto. "Switzerland is a stable country with a solid currency and no debt, so it is still attracting tax-compliant money."
Lloyds has been looking to sell assets to boost capital, and last week raised 450 million pounds from the sale of a 15 percent stake in wealth manager St. James Place.
"When Lloyds decided to concentrate on their local market they contacted a few possible bidders including us. We saw a nice client book and good managers, so for us it was a no-brainer," said de Picciotto.
The British government holds a 38.8 percent stake in Lloyds which it has held since stumping up 20.5 billion pounds ($31 billion) to rescue the bank in 2008. After a prolonged slump, shares in the bank recently hit a price that would allow the government to break even on its investment.