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A strong, well-articulated strategic case can help the buyer focus his mind, build consensus among his lieutenants, lay the groundwork for seeking regulatory blessings, and make synergies happen as soon as possible.

«A private bank has an element of a Premier League football club»

Secondly, full due diligence, assisted by proven external experts. The due diligence on a private bank is arguably more complex than on a commercial bank. Financials, loan book, governance, processes, regulatory records, and IT platform are all important. But the human aspects should be carefully assessed, validated, and planned for.

Why?

A private bank is a bank, for sure, but it also has an element of a Premier League football club, if we can put it that way. How to retain the star strikers, the talented coach, the medics and the nutritionists, and also keep the goodwill and loyalty of thousands of fans – weighty questions to be addressed.

Getting regulatory approvals, needless to say, could be an assiduous process too. The new investor and the incumbent owner family should demonstrate credibly how the bank after the transaction will uphold standards, ensure continuity, treat all stakeholders fairly, and generate commercial successes.

«A private bank is probably the most 'human' organization in the financial services world»

And finally, branding could be tricky. The new owner should diligently safeguard the perception of the brand in the market so that the heritage and the «halo» shall stay intact. But at the same time, the new owner should subtly inject a new dimension – be it growth, Asia, or tech – into the old brand, and gradually align it with the overall proposition of the new owner’s other businesses.

Everything sounds a bit daunting, doesn’t it?

Naturally…a private bank is probably the most «human» organization in the financial services world. To manage one is tough enough, to buy and transition one is harder still. But – the owner-families of European private banks tend to be people whose vision, wisdom, humility, and integrity have stood them in good stead over decades, if not centuries.

«One never actually owns a Swiss private bank. One merely looks after it for the next generation»

For any challenge faced by the private bank, probably the owner-family already has a good answer, if not the resources required.

Perhaps any buyer’s best strategy is to be a true listener, a committed partner, and a genuine friend of the owner family. To misquote a famous tagline, one never actually owns a Swiss private bank, one merely looks after it for the next generation – therefore, the incumbent family and the new shareholder have all the reason to work very hard, together.

Nick Xiao is an academic specialized in China's financial markets and managing partner of a family office in Hong Kong. He was born in China but spent several years in Europe. Xiao published a pioneering book in 2003 on China's nascent over-the-counter derivatives market and contributed award-winning theses to journals of People's Bank of China and the Chinese Academy of Social Sciences. He is also a seasoned practitioner in China's wealth management industry. He started his career at a U.S. management consultancy and moved to establish and manage the China onshore private banking businesses of Standard Chartered and later of Credit Suisse.