The closure of J. Safra Sarasin’s German unit entails tough consequences for the bank's local customers. The treatment doesn’t really correspond with the treatment that Swiss private banking prides itself with.

J. Safra Sarasin in March 2017 finally decided to pull the plug in Germany. It lacked the size required to become profitable on a sustainable basis.

The bank had about 1.5 billion euros in assets under management and about 80 employees. The two figures didn’t compare favorably.

Assets Will Be Sold at Customers' Expense

The clients have now been asked to follow suit and take their assets along – and in no uncertain terms, German newspaper «Die Welt» reported. The report cited a letter sent to the wealthy clients of the Swiss-Brazilian bank in Germany.

J. Safra Sarasin in the letter told its clients that shares of those customers, who didn’t get in touch with the bank by mid-May and told the relationship managers where to move their assets, would be sold without further notice or deposited with a German court.

Extra Fee to Cover the Costs

The bank continued to warn that it wasn’t the company’s problem if clients suffered a loss through the sale of assets. Furthermore, clients who did not contact the bank by the outset date would become liable to pay a fee of 5,000 euros in addition to the normal transaction costs.

The bank didn’t comment its letter, according to the report in «Die Zeit».

Unusual for Private Banking

The rather abrupt ending of banking relations would seem ill-fitting for an industry that prides itself for going the proverbial extra mile to serve its customers. It also seems unusual that the bank doesn’t offer its clients a solution for where to shift their assets.

J. Safra Sarasin’s former head of Germany, Andreas Brandt, recently founded Lunis, an asset management company. He will likely not only hire a number of ex-Sarasin bankers, but also welcome the clientele of his former employer.

Mueller Lawsuit Remains Heachache

It isn’t known what will happen to the rest of J. Safra Sarasin’s staff. Insiders said that claims and even lawsuits against J. Safra Sarasin may follow as a consequence of the closure.

The bank is already party of a lawsuit in Europe’s largest economy. The court case brought by Erwin Mueller, the drug store chain founder, was launched earlier this month and may yet cost the bank dearly.