LGT announced that it has reached an agreement with HSBC Private Bank (Suisse) to acquire a sizeable private banking franchise. The scope of the transaction includes over CHF 10 billion in Assets under Management (AuM) and around 70 staff.
Upon closing, the acquired business will be integrated into LGT Bank (Switzerland) which had AuM of CHF 21.0 billion as per year-end 2013. The acquisition is an excellent fit with LGT’s strategy and will further strengthen the group’s market position in its core and growth markets.
The portfolio that LGT has agreed to acquire from HSBC Private Bank (Suisse) is a profitable business evenly distributed amongst various teams, each focusing on HNW and UHNW clients from a specific geographic region that is key to LGT’s growth strategy, notably 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 opportunity to acquire this portfolio has arisen following a strategic business review by HSBC to concentrate its growth on a focused group of markets. The assets to be acquired have undergone rigorous tax and general compliance procedures.
The teams who are currently looking after the respective clients and will transfer to LGT include around 70 employees (the majority of which are client relationship managers) across Switzerland. LGT intends to keep all transferring employees and to hire additional staff in Switzerland in order to accommodate the expected growth.
The purchase price will be fully paid in cash from LGT’s equity capital. Completion of the transaction is envisaged to take place in the fourth quarter of 2014.
Strong addition to LGT’s strategy
Upon closing, the acquired teams and the respective businesses will be fully integrated into LGT Bank (Switzerland). With assets under management rising to over CHF 30 billion, LGT Bank (Switzerland) will significantly strengthen its market position as a result of the transaction. LGT Group is expected to increase its assets under management to around CHF 120 billion and staff to almost 2,000.
H.S.H. Prince Max von und zu Liechtenstein, CEO of LGT Group: "We welcome the new clients and employees who fit well with our growth strategy, and in particular with our goal of improving our footprint in growth markets. In turn, I am convinced that our long term-oriented ownership and governance, our strong capitalization, our track record of financial stability and stable growth, as well as our leadership in alternative investment products, will represent an attractive proposition to clients and staff transferring to LGT."
Heinrich Henckel, CEO LGT Bank (Switzerland): "This is an excellent addition to our existing business and will significantly strengthen our market position. We very much look forward to welcoming our new colleagues and clients to our bank."