An Italian financial institute wants to build a European private banking empire from Switzerland.
The news may have slipped by, but there was a larger meaning behind it. Last week Geneva's Bank Reyl disclosed that it had taken a 40 percent stake in 1875 Finance, an independent asset manager based in the same city, as finews.com previously reported.
What it did do is confirm that plans are afoot by an Italian financial institution to play a more significant part in the consolidation of Swiss finance.
But, first, let's go back to the start. Exactly ten years ago Paolo Molesini (pictured above) told finews.ch (German only) that Italy's Intesa Sanpaolo Group was looking for a Swiss private bank. At the time, Molesini was chief executive of Intesa's private banking division, Fideuram Intesa Sanpaolo Private Banking (ISPB). Today he is its chairman. In the meantime, he appears to have more than fulfilled what he originally set out to do.
In 2017, Fideuram ISPB took over Geneva private bank Morval, merging it with the division's activities in Switzerland. And last year the Italians assumed 69 percent ownership of Reyl. The announcement last week that Reyl would take a stake in 1875 Finance is actually a further step towards driving consolidation in the Swiss private banking sector, as Paul Kohler (pictured below), CEO of 1874 Finance said in an interview with Swiss French daily «Le Temps» (behind paywall, in French) last week.
Focal Point for Independent Wealth Managers
Intesa is Italy's second largest financial institution behind Unicredit and the leader in private banking. It has set itself the target of becoming one of the five most important wealth managers in Europe over the next few years. Bank Reyl will serve as the central point for international private banking and it already has assumed Fidueuram ISBC activities in Lugano, Luxembourg and London under it, with further takeovers planned.
1875 Finance, which manages about $12 billion in client assets, is going to be the main conduit for future acquisitions of independent asset managers, as Kohler said in the interview with «Le Temps».
Keeping Their Own Names
Originally, Fideuram ISPB wanted to completely take over 1875 Finance through Reyl. But the four founding partners managed to convince the Italians that they would have better acquisition opportunities in future if they remained on board. Now, according to Kohler, the institution is targeting independent asset managers that have slightly more than $1 billion in assets under management, with the ideal figure hovering around $3 billion.
Given all this, Reyl and 1875 won't merge. Both institutes will continue to use their own names and make takeovers that help Fideuram ISPB become one of the top five wealth/asset managers in Europe.
Comparable with UBS
The plans sounds ambitious but Intesa has the capacity to make it happen. The Turin-based bank, whose private banking headquarters are in Milan, mastered the 2008/09 financial crisis extraordinarily well and has been able to implement an ambitious growth plan since then, as its recent 2021 earnings show.
It is listed on the Italian stock exchange and is a component of the EuroStoxx 50. With a balance sheet of roughly $1 trillion, it is similar in size to UBS which means it has the means to play a role in commercial and investment banking and make further takeovers.
Detour to Zurich
In spring, it had been apparently on the lookout for staff in Zurich, as research by finews.com then indicated. A spokesperson denied the plans but also said that one should never say never. The plan has probably been dropped in the meantime given the bank now has a strong presence, as far as Zurich, through Bank Reyl.
