HSBC Said to Plan Sale of Swiss Private Banking AssetsAaron Kirchfeld and Howard Mustoe
HSBC Holdings Plc, Europe’s largest bank, is planning to sell parts of its Swiss private bank as some foreign lenders retreat amid a crackdown on bank secrecy and rising regulatory scrutiny, four people with knowledge of the situation said.
HSBC is selling a largely Geneva-based business with about $15 billion in assets under management, according to three of the people, who asked not to be identified because talks are private. Documents for the business, which includes wealthy clients in France, have been sent to potential buyers and it may be sold in parts, though no sale is guaranteed, they said.
The bank has attracted scrutiny from governments over its operations in low-tax jurisdictions, with U.K. authorities saying in 2011 that they were acting on information about accounts at the bank’s Geneva office. Chief Executive Officer Stuart Gulliver told investors in May that while the bank doesn’t plan to sell the Swiss private-banking business, it will “reshape certain parts of it” to focus more on emerging markets.
HSBC said in July it would keep its Monaco private bank after reviewing interest to buy the unit.
“HSBC is fully committed to Switzerland as a key international booking center for our global private bank and a priority market for the group,” HSBC said in an e-mailed statement today. “We are investing heavily in our global private banking operations in Switzerland” with more than $200 million being spent, including a new headquarters in Geneva and new computer system, according to the statement. The bank declined to comment further.
The company, based in London, bought the private-bank businesses in in 1999 through its $9.85 billion acquisition of Edmond J. Safra’s Republic New York Corp. and Safra Republic Holdings SA.
Weakening bank secrecy and rising regulation may unlock a wave of acquisitions in the next 12 to 18 months, bankers, consultants and analysts told Bloomberg News in July. The number of foreign-owned Swiss banks fell to 129 by the end of May 2013 from 145 at the start of 2012, according to data from the Association of Foreign Banks in Switzerland at the time.
Lloyds Banking Group Plc, Britain’s biggest mortgage lender, sold its international private-banking business in May to Swiss wealth manager Union Bancaire Privee, which agreed to buy ABN Amro Bank NV’s Swiss private-banking business for an undisclosed sum in 2011.