Bloomberg

(Bloomberg) -- EFG International AG, in its second deal this year, has agreed to buy the Luxembourg-based private banking activities of UBI Banca International SA with 3.6 billion euros ($4.1 billion) of client assets.

EFG earlier agreed to buy BSI from Brazil’s Grupo BTG Pactual SA in a bid to become Switzerland’s fifth-largest private bank.

EFG didn’t disclose the price of the latest acquisition, a cash deal expected to be completed in the first half of 2017. It said bank’s capital position won’t be affected.

“The transaction will significantly strengthen EFG International’s presence in Luxembourg and will reinforce the bank’s focus on growing its wealth management presence in Europe," EFG said in a statement Thursday.

Swiss banks led by Credit Suisse Group AG are stepping up operations in Luxembourg, using the rival market as a gateway to clients in the 28-nation European Union. Luxembourg is vying with London and Frankfurt to be the preeminent hub for banks and fund managers to export their services across the EU.

Zurich-based EFG said in February it plans to raise about 750 million francs to finance the cash-and-stock purchase of BSI for 1.33 billion Swiss francs ($1.4 billion). The combined firm will manage about 170 billion francs in revenue-generating assets, making it Switzerland’s largest private bank after UBS Group AG, Credit Suisse Group AG, Julius Baer Group Ltd. and Pictet & Cie. Group SCA.

UBI offers private banking, wealth structuring, asset management and corporate banking services to private and corporate clients in Luxembourg. Its branches in Madrid and Munich are excluded from the transaction, as are its fiduciary and corporate banking activities, EFG said in the statement.

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net. To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net, Cindy Roberts

©2016 Bloomberg L.P.

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