Banque Syz – a Takeover Target?

A spokesperson for Syz told finews.com that the company isn’t for sale. Eric Syz’ wife Suzanne Syz was appointed to the board of directors in May, giving the family an even stronger voice. Their sons Marc and Nicolas also were given important roles recently: Marc Syz is head of Syz Capital, a vehicle of private market investments. Nicolas Syz is the new head of private banking. And in Zurich, the firm has attracted new bankers to help it boost its business on Switzerland’s largest banking hub.

But unlike other companies mentioned as potential takeover targets, Syz has seen its profit decline over the years. From 9 million Swiss francs ($9.2 million) in 2016, profit dropped to 3.5 million in 2017 and 2.5 million a year later. Even if one-off items contributed to the decline, the development is an irritant because assets under management also shrunk from almost 40 billion francs to about 30 billion over the same period.

The Perfect Candidate?

Still, with the amount of assets it manages and the sound level of capitalization, Syz would be the perfect size to help another bank reach a new level. Juerg Zeltner, the previous UBS executive and now partner and chief executive of KBL Group in Luxembourg recently announced the intention of his bank to buy in Switzerland. KBL in fact is in preliminary talks with Bank am Bellevue as was revealed by finews.com on Tuesday.

Another to be openly interested in further acquisitions is Vontobel Chairman Herbert Scheidt – he spoke at length about his company’s strategy in an interview with finews.com earlier this week.

BIL Group, a Luxembourg-based firm, is also keen to reach out to Switzerland. It belongs to China’s Legend Holdings. BIL plans to grow in Europe and in Switzerland particularly.

Integration a Mere Formality

From a business point of view, it would make most sense to add Syz to Lombard Odier. The Geneva-based private bank could use Syz to increase assets under management and move closer to its bigger rival Pictet. Also, after the problem with the Avaloq platform, Syz fell for the tried and tested G2 platform – which is a Lombard Odier product. The migration would pose no difficulties.

On the other hand, Lombard Odier never in its 222 years of existence bought another bank. But it has the experience of merging businesses – with Lombard, Odier, Darier and Hentsch being the perfect proof. Patrick Odier, the senior partner has not excluded the option of buying a rival as he repeatedly made apparent in interviews with finews.com.

In reality, a sale of Banque Syz may not yet be on the cards. One of the reasons being that a role would have to be found for Eric Syz.

Challenging Times for Private Banking

It is more likely that the bank will divest further units, for instance the Bahamas business, and that it will reconsider its presence in Miami. The first half of 2019 seems to have been challenging for private banks in general as clients pulled out some of their assets after the recovery of the markets in the first months of the year.

In the end, private banking is still beset by shrinking margins, high regulatory costs and technological progress that makes the classic business appear less enticing. Taking together, these are factors that will contribute to further change within Swiss banking in coming months.