Oct. 30 (Bloomberg) -- EFG International AG, the Swiss private bank controlled by billionaire Spiro Latsis and his family, plans to make a “transformational acquisition” once it has rebuilt client assets, said Chairman Jean-Pierre Cuoni.

The bank would be interested in buying a firm with about 50 billion Swiss francs ($49 billion) in assets, Cuoni said in an interview at EFG’s Zurich headquarters. Such a deal would give the firm about 130 billion francs of client assets and vault it into the top six Swiss money managers.

“When the time is right, EFG would be interested in a transformative acquisition,” said Cuoni, 72. EFG would “certainly” like to buy RBS Coutts Bank AG, Cuoni said, adding that the private banking unit of Royal Bank of Scotland Group Plc isn’t currently for sale.

Swiss banks, including Julius Baer Group Ltd. and Credit Suisse Group AG, are looking for acquisitions as bailed-out foreign institutions sell units to raise capital and avoid any stigma tied to bank secrecy. After completing more than a dozen wealth management takeovers since going public in 2005, EFG’s next purchase will be a “big transaction,” Cuoni said.

Coutts had 45.8 billion francs under management at the end of 2008. The bank would complement EFG’s strengths by providing greater access to markets such as the U.K., Germany and Austria, said Cuoni, who was chief executive officer at Coutts & Co. International Private Banking from 1990 to 1994.

RBS spokesman Neil Moorhouse declined to comment.

Gaining on Baer

Buying a bank the size of Coutts would make EFG the sixth- biggest Swiss private bank behind Julius Baer, which has 160 billion francs of assets. Baer, whose offices are a two-minute walk from EFG’s on Zurich’s Bahnhofstrasse, trails UBS AG, Credit Suisse, Pictet & Cie. and HSBC Private Bank (Suisse) SA.

EFG has “stopped making smaller acquisitions, certainly for the time being,” said Cuoni, who co-founded EFG in 1995 with Chief Executive Officer Lawrence Howell, a colleague at Coutts, using his “pension money” and backing from Latsis.

Baer bought the Swiss unit of ING Groep NV, bailed out by the Netherlands, this month for 520 million francs. Zurich-based Vontobel Holding AG and LGT Group, the bank owned by the family of Liechtenstein’s prince, acquired Swiss units from Commerzbank AG, which received aid from the German government, in July. The prices weren’t disclosed.

‘Big Political Noise’

Other Swiss-based private banks whose parents received state assistance include Lloyds TSB Bank Plc (Suisse), with 25.9 billion francs under management at the end of 2008, and Citibank (Suisse), with 20.9 billion francs. The U.K. government owns 70 percent of RBS and 43 percent of London-based Lloyds Banking Group Plc. The U.S. holds a 33.6 percent stake in New York-based Citigroup Inc.

“How can you save a bank with taxpayers’ money and make a big political noise about all these depositors in Switzerland who’re hiding from taxes, and at the same time your quasi- nationalized bank does exactly the same thing,” Cuoni said. “It just doesn’t fit.”

Switzerland, home to an estimated 27 percent of the world’s privately held offshore wealth, began renegotiating more than 70 double-taxation treaties in March to avoid being blacklisted as a tax haven after attacks on bank secrecy by the U.S., U.K., France and Germany. It agreed in August to provide details on as many as 4,450 UBS AG accounts to the U.S.

Baer paid the equivalent of 3.5 percent of assets under management for ING’s Swiss unit. Historically, wealth managers were priced at 2 percent to 3 percent of assets, Cuoni said.

High Prices

“We looked at some of the opportunities that arose, but did not progress because we felt that prices needed to come down,” Cuoni said. “It’s riskier today, when 1 percent is probably more appropriate. Others clearly see it differently, and at 1 percent you don’t get anything,” he said with a laugh.

EFG would seek financing for any acquisition of a “transformational” scale, said Cuoni, whose career in private banking spans almost 40 years and who helped Citigroup build its wealth management business.

After EFG’s stock slumped to an all-time low in March and first-half profit dropped 89 percent to 20 million francs, Cuoni said 2010 will be “a better year.”

Client assets rose 6.6 percent in the six months through June to 80.4 billion francs, after dropping 22 percent in the second half of 2008. The stock has advanced 155 percent to 16.80 francs since March 10, beating the 87 percent gain in the 23- member Swiss Exchange Market Sector Bank Price Return Index and giving EFG a market value of 2.46 billion francs.

EFG cut 7 percent of its wealth managers in the first half, after Cuoni said in September 2008 that there was no limit to the company’s hiring of private bankers.

“We had to adapt to circumstances,” Cuoni said this week. “Up until last year, we said no limit, and we continue to say long term, no limit. But in the middle of the storm, the captain has to lower the speed or risk taking on too much water.”

To contact the reporters on this story: Warren Giles in Geneva at wgiles@bloomberg.netElena Logutenkova in Zurich at elogutenkova@bloomberg.net

Last Updated: October 29, 2009 19:01 EDT