Vontobel Plans to Buy Stake From Raiffeisen Amid Dispute

Vontobel Holding AG, an investment bank and asset manager based in Switzerland, plans to buy back a 12.5 percent stake owned by Swiss Raiffeisen amid legal wrangling concerning a cooperation agreement.

Vontobel has the right to repurchase the entire stake, it said in a statement from Zurich today. Raiffeisen Chief Financial Officer Marcel Zoller has stepped down from Vontobel’s board of directors, while Vontobel will continue providing services to Raiffeisen until 2017, it said.

While Vontobel regrets Raiffeisen’s decision to end the cooperation agreement, repurchasing the shares will create “flexibility in managing its capital structure,” it said.

Raiffeisen said Vontobel has the right to buy the stake in an e-mailed response to questions.

Vontobel has been at loggerheads with St. Gallen, Switzerland-based Raiffeisen since 2012 over the interpretation of the agreement that allowed Vontobel to tap Raiffeisen’s client network in exchange for the use of its information technology platform. Raiffeisen is a group of cooperative banks with the third-biggest branch network in Switzerland.

A disagreement about the validity of a contract regarding Notenstein Private Bank -- a unit of Swiss Raiffeisen since 2012 -- led Vontobel to bring legal arbitration proceedings about 18 months ago, in a dispute described today by Swiss newspaper Le Temps as “the biggest conflict” within the Swiss financial industry.

Legal Process

The expiry of the arrangement in 2017 takes place independently of the arbitration process, which is expected to conclude at the end of this year, Raiffeisen said in a separate statement today.

Raiffeisen said a new venture created with Avaloq Group AG, a banking systems and technology company, will allow it to provide clients with products and services.

Vontobel, majority owned by a shareholder pool including the founding family with the same name, fell 0.5 percent to 30.90 Swiss francs at 12:16 p.m. in Zurich. The stock has declined 16 percent this year.

Vontobel, which also owns private banking operations, acquired Derivative.com AG last month to boost the number of issuers on its deritrade online structured products service. The bank has been seeking acquisitions in private banking and asset management. Vontobel had 500 million Swiss francs ($559 million) to 600 million francs for potential deals, the company said in February.

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