UBP Says Client Assets Rise 10% in 2013 on Lloyds Purchase

Union Bancaire Privee, the Geneva-based wealth manager founded by Edgar de Picciotto, posted a 10 percent increase in client assets last year after acquiring the Swiss unit of Lloyds Banking Group Plc. (LLOY)

Assets under management rose to 87.7 billion Swiss francs ($98 billion) from 80 billion francs a year earlier, including client accounts absorbed from the Lloyds purchase, the bank said in an e-mailed statement today. Operating profit for 2013 increased 20 percent from 2012 to 218.3 million francs, while net profit declined 13 percent to 152 million francs.

The improvement in operating profit resulted from net inflows from private and institutional clients, “sound asset management performances” and “post-acquisition synergies,” UBP said in the statement.

UBP, once the world’s largest investor in hedge funds, is rebuilding through acquisitions after customer assets slumped 55 percent between 2007 and 2011. The bank acquired the Swiss unit of ABN Amro Bank NV in 2011, bought Nexar Capital Group, an alternative investment manager, in 2012, and added Lloyds’s international private banking business last year.

UBP said in May it expected to accept more than 10 billion francs of client assets from Lloyds as part of a strategy to grow internationally and expand private banking. UBP agreed to pay about 65 million pounds ($107 million) to complete the deal and a further 35 million pounds over a two-year period, Lloyds said at the time.

Assets under management were 81.1 billion francs as of the end of June, before the bank integrated the two businesses.

U.S. Program

UBP is one of at least 30 Swiss private banks that have declared they will join category two of a client disclosure program announced by the U.S. Department of Justice in August and accepted by the Swiss government. Banks in that category expect to provide information on U.S. clients and pay a fine of as much as 50 percent of assets managed for Americans, in exchange for a non-prosecution agreement.

Banks can avoid the fine and obtain a non-target letter if the Justice Department deems they didn’t break U.S. tax laws. UBP said on Dec. 23 it is “reserving the right” to switch to category three, through which it could avoid a financial penalty.

To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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