There is currently a debate about whether the Swiss banking center is losing its international appeal. A purely philosophical debate, it seems, because Swiss institutions are finding plenty of takeover targets abroad.
Union Bancaire Privée (UBP), one of Geneva's major private banking houses, has just acquired Tokyo-based asset manager Angel Japan Asset Management. A takeover which remained fairly unnoticed.
With only 1.2 billion dollars assets under management, it is small in size, yet the deal proves the buyer's growth ambitions in Asia.
UK Takeover
Above all, however, the transaction can be seen as part of a steadily growing trend where Swiss and Liechtenstein private banks buy up foreign companies. Here an independent asset manager, there a significant stake, and sometimes even a whole bank - it seems there is no shortage of targets.
Angel Japan is not the only takeover in 2023. Earlier this year, LGT, the bank owned by the Liechtenstein Princely Family, expanded its position in the British market significantly with the acquisition of the wealth management business of the local fund giant Abrdn.
A little further afield, Zurich-based rival Julius Baer took a stake in wealth manager Grow Investment in Shanghai, China last September. The takeover is the bank’s first move into China’s mainland market.
(Image: PWC)
Hong Kong, Luxembourg, Austria
LGT also acquired wealth advisor Crestone in Australia in late 2021, while the Brazilian-Swiss private bank J. Safra Sarasin acquired Bank of Montreal's (BMO) private banking operations in Hong Kong and Singapore.
Other takovers include, Zurich-based investment house Vontobel's acquisition of the remainder of British fund house Twentyfour Asset Management, and VZ Group's majority stake purchase in wealth advisor Lumin Wealth in the UK.
Liechtenstein-based LLB acquired Credit Suisse's private banking clients in Austria, and UBP bought Danske Bank's wealth business in Luxembourg.
A lot of interest
«We are seeing a lot of interest in growing abroad,» Martin Schilling (pictured above) commented on the acquisitions. As managing director of consulting firm Pricewaterhouse Coopers (PWC) Switzerland, Schilling assists local banks with mergers and acquisitions; according to his observations, institutions are taking both an organic approach, with the establishment of new locations and the acquisition of advisory teams, and an acquisitive approach.
«Many institutions have set themselves the goal of growing in core foreign markets. To that end, they are increasingly willing to make acquisitions of foreign firms and client advisor teams,» Schilling says.
Organic Growth
In fact, there has been plenty of organic movement in recent months as well. Liechtenstein-based LGT has announced its expansion plans for the German market in 2022 and has already opened individual locations there.
Zuercher Kantonalbank (ZKB) recently announced its expansion strategy for the German market without establishing locations there. J. Safra Sarasin opened a branch in Madrid last year.
PWC is helping local banks expand abroad by drawing on the consultancy's network in the respective market. «We know of other local banks that are looking at organically establishing locations abroad and would be happy to make appropriate acquisitions if the opportunity arises,» Schilling said.
Intact brand
All of this doesn't quite fit in with the image of an industry that seems to have fallen into the twilight zone because of Credit Suisse's bailout and the adoption of foreign sanctions.
«We don't see 2023 so negatively,» he said, adding that he does not expect it to be more difficult private banks than the previous year, «the inflow of new money is still there, and volumes could recover thanks to better stock market performance,»
It also said Swiss Private Banking brand was intact, adding that in times of crisis, Switzerland as a location is traditionally sought after as a safe haven for funds from abroad.
Outlandish Growth Plans?
Against this backdrop, the current growth plans of some private banks do not seem as outlandish as one might think. Julius Baer, wants to double its assets under management to 1,000 billion Swiss francs by 2030. And UBS is known to be aiming to manage around 5 trillion dollars in client assets with Credit Suisse's assets by 2025, making it the world's second-largest wealth manager.
