The pressures of consolidation in the Swiss private bank sector are high. A number of transactions suggest a fresh wave of takeovers is imminent. A prominent dealmaker explains to finews.com why.
Dealmakers like Jean-François Lagassé (pictured below) are the oil that lubricates the current consolidation in the Swiss private banking sector. There’s hardly been a takeover in recent years that Lagasse hasn’t been involved in or aware of. In 2008 he joined Deloitte in Switzerland as a partner, and for the past four years has led the corporate finance team.
And while his colleagues are on holiday, he’s had his hands full at Deloitte with a burgeoning pipeline of potential deals. He identifies three trends which are driving transactions in the sector, in an interview with finews.com.
A fair representative for these trends are the deals involving the Geneva private bank Gonet and UBP, as well as banking giant UBS. These trends are:
1. Gonet and Mourgue d’Algue: Search for Scale
The two old-guard Genevan banks merged in early July, although the deal was more a takeover by Gonet. The merger has brought a combined 5 billion Swiss francs ($5 billion) in assets onto the scale, thus better equipping it for the upcoming challenges.
Further such deals are likely in the coming 18 months, according to Lagassé. «We are seeing smaller private banks looking at strategic options which would entail a sale or fusion», the Deloitte expert said.
Such moves are increasingly attractive given the implementation of the automatic exchange of information rules which make higher sale prices possible.
Lagassé however remains tight-lipped on details of upcoming deals. According to another private bank source however institutes like Banque Cramer in Geneva, and die Basler Sallfort Private Bank are weighing such options. The two banks didn’t reply to finews.com questions.
2. UBS and Nordea: the European View
Last year UBS took over the private banking business of Nordea Bank in Luxembourg, involving client assets of around 15.6 billion Swiss francs.
The deal could prompt similar moves. According to Lagassé several global institutions are weighing a withdrawal from the European private banking market. «This could offer abuying opportunity for Swiss players», he said.
This could also work in the opposite direction. «Private banks here have realized that access to the EU market won’t get any easier in the future», said Lagassé. So now they are trying to go «onshore» in the EU. This prompted renewed activity in Luxembuurg. in recent months. Further deals could follow in France and Germany.
Simultaneously the change in global bank strategies could trigger a further exodus from Swiss private banking. «We expect a handful of foreign banks to withdraw in the coming six to 12 months», said Lagassé.
3. UBP and ACPI: Brexit Headwinds
It was reported today that Union Bancaire Privée in London plans to take over the investment boutique ACPI. According to the Geneva private bank, the sale is tied to the upcoming Brexit, UBS’s stated aim is to expand its offshore base in London.
The deal could however also work in the opposite direction, Lagassé explained. «Swiss private banks which serve the European market through a British subsidiary are mulling a U.K. exit because of Brexit.»
