Royal Bank of Scotland agreed to sell its Couts International private bank to Switzerland's Union Bancaire Privee, becoming the latest foreign bank to retreat from the Swiss wealth market.
Neither RBS, the biggest UK state-owned bank, nor UBP disclosed the deal’s terms, which may depend on how many client assets are transferred.
The sale includes business managed from Switzerland, Monaco, the Middle East, Singapore and Hong Kong and assets under management of about 32 billion Swiss francs (€30.5 billion), RBS said on Friday.
RBS joins lenders such as Bank of America, Morgan Stanley and Lloyds Banking Group in exiting Switzerland, the world's biggest offshore financial centre, over the past three years.
Banks are selling their businesses amid low profitability and international scrutiny of the industry.
“Following an extensive review, it was clear that the bank we are building would not be the most appropriate owner of the business being sold,” Alison Rose, chief executive officer of RBS’s commercial and private banking business, said in the statement.
“We believe that in UBP we have found a good long- term owner for this business.” Chief executive officer Ross McEwan is selling units to focus RBS on serving wealthy UK individuals.
RBS last year announced plans to split Coutts in two and is keeping the UK business, which includes Queen Elizabeth II among its clients.
RBS said it will take a £200 million (€273 million) charge as a result of the sale, primarily relating to a goodwill write off. Initial closing of the transaction is expected in the fourth quarter.
Capital benefits from the transaction will be “modest,” it said.
UBP, founded by chairman Edgar de Picciotto in 1969 and run by his son, chief executive officer Guy de Picciotto, has been growing rapidly.
It had almost 100 billion francs of client assets at the end of last year. It acquired the Swiss unit of Lloyds in 2013 and ABN Amro’s business in the country two years earlier.
Bloomberg
