Quintet pumped a double-digit million sum into its German subsidiary Merck Finck to prevent another full-year loss, finews.com has learned.

Merck Finck deepened its pre-tax loss of 13.7 million euros ($16 million) last year from 10.2 million euros in 2018, according to a German regulatory filing seen by finews.com. The Munich-based wealth manager's Qatari-owned parent, Quintet, injected 26 million euros of what it termed «extra revenue» into Merck Finck to smooth the result, according to the filing.

The result is a dramatic worsening for Merck Finck, founded in 1870 and the most prestigious name in Quintet's stable. The Luxembourg-based wealth manager is comprised of nine private banks including in Britain, Belgium, and Switzerland. Thomas Rodermann, a former UBS banker, took over at Merck Finck earlier this year.

Bloated Base

The 150-year-old bank said the result was worse than expected due to a team of private bankers leaving early last year. «Business was not satisfactory and in particular worse than planned due to the exit of an advisory team,» it said in the filing. 

Merck Finck said it compensated the departures with other new hires and exceeded its target of 75 private bankers. Of its 276 staff, 76 are front-facing advisers. The hiring bloated its cost-income ratio to 129 percent from 120 percent in 2018.

Project In Disarray

Thirteen months into the Quintet (former KBL) project, little is as its backers planned last May. Its architect, Juerg Zeltner, died unexpectedly in March, leaving Quintet without a guiding spirit.

A close associate of Zeltner's, Jakob Stott, took the CEO job. The Danish ex-UBS banker oversaw a Swiss bank launch following an acquisition, the opening of a Nordics office, and the streamlining of its European operations in Spain, Germany, the Netherlands, Luxembourg, and Belgium as one, in the Duchy.

In Pictet Mold

Quintet swung to a net loss of 43.7 million euros last year, from break-even in 2018, it disclosed in May. The ruling al-Thani family of Qatar bought KBL from troubled Belgian bank KBC in 2011 for 1.05 billion euros.

The bank is attempting a revival of its fortunes by rebranding, fixing unprofitable boutiques like Merck Finck, digitizing, and hiring dozens of private bankers (many from UBS). Zeltner, Stott, and operating chief Colin Price had envisioned Quintet as a partner-led private bank in the mold of Pictet, though the al-Thanis own virtually 100 percent of the bank.