Banque Syz SA of Geneva is buying Royal Bank of Canada’s Swiss private bank as foreign financial firms retreat from Switzerland amid higher regulatory costs.
The business, based in Geneva, had 10 billion Swiss francs ($10.5 billion) of client assets under management at the end of October, Royal Bank said in a statement on Tuesday. Terms of the transaction weren’t disclosed.
“We will work closely together with Syz to ensure a smooth transition for RBC Suisse employees and a seamless process for clients,” George Lewis, head of Royal Bank’s wealth management and insurance unit, said in the statement.
Royal Bank joins Morgan Stanley, Bank of America Corp., Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc in exiting the Swiss market in the past three years amid the rising cost of managing private wealth offshore and greater international scrutiny of the industry.
Banque Syz, a private bank and fund manager co-founded in 1996 by Eric Syz, may increase its assets under management to almost 40 billion francs as a result of the deal, which includes clients from Latin America, Africa and the Middle East. Absorbing all 10 billion francs of client assets would make Syz one of the top 20 private banks in Switzerland with almost 22 billion francs from wealthy individuals and families, the bank said.
Speaking in an interview, Eric Syz said he’s “very confident” about transferring Royal Bank’s Swiss business and expects to absorb about 80 percent of the client assets. The transaction, a share deal under which Banque Syz will purchase the legal entity, may close by the end of August and RBC Suisse will be run as a parallel unit until the businesses merge at the end of the year, he said.
The deal includes offices in Dubai and also Miami, where Banque Syz wants to develop the onshore wealth and asset-management market, overseeing money for U.S. clients. Banque Syz and RBC Suisse also handle money for Americans outside the U.S. through Securities and Exchange Commission-registered investment adviser companies based in Switzerland.
Royal Bank, Canada’s biggest bank by assets, was the world’s fifth-largest wealth manager at the end of last year with $704.4 billion under management, according to a study published last week by research firm Scorpio Partnership.
RBC still has investor and treasury services, global asset management and capital markets businesses in Switzerland.