DZ Privatbank will shutter its branch in Singapore, research by finews.ch revealed. The business in Zurich is also up for scrutiny.

«The cooperation agreement envisaged with Bank of Singapore (BoS) has been concluded in the meantime. DZ Privatbank Singapore (PBSG) thus will stop doing business on December 31, 2016,» the bank told finews.ch in a statement.

The relationship managers at PBSG will switch to BoS and continue to be available for their clients, the company also said.

The bank had decided half a year ago to find a local partner for a cooperation agreement in a bid to meet the quickly rising demands posed by the financial market of Singapore, DZ Privatbank explained.

The Perfect Storm

Private banking in Singapore increasingly is becoming a tough business for foreign companies. Rising regulatory demands, cost-sensitive clients, difficult market conditions and tough competition are weighing on margins.

«The perfect storm» is how Urs Brutsch, founder of Singapore-based HP Wealth Management called it recently.

PBSG will be the second takeover of a foreign bank by BoS this year, having recently concluded the acquisition of Barclays Wealth. Two years ago, Singapore's DBS, Southeast Asia's biggest bank, bought the Asia business of Société Générale.

DZ Privatbank is majority-owned by Deutsche Zentral-Genossenschaftsbank (DZ Bank), based in Frankfurt. Outside Germany, it also has a branch in Zurich and a few other financial centers.

Cooperation in Switzerland?

The bank is in talks with Notenstein Privatbank regarding a cooperation agreement in Switzerland. Notenstein is a unit of Raiffeisen, which has its roots in cooperative banking as well.

Despite the agreement with BoS, DZ Privatbank will stick to its strategy of «local.national.international» and continue developing private banking in Luxembourg and Zurich, the bank told finews.ch.