The Swiss wealth management sector is set to shrink a notch further after Notenstein announced plans to take over the Swiss wealth management business of Germany’s Landesbank Baden-Württemberg (LBBW) – barring its United States clients.
The deal would add an estimated CHF1 billion to Notenstein’s current CHF29 billion ($32 billion) stockpile of client assets under management (including assets managed by subsidiaries of the St Gallen-based private bank).
"The acquisition of these client assets underpins our long-term strategy in private banking: to expand our market share in selected key markets," said Notenstein chief executive Adrian Künzi.
"Moreover, we are well acquainted with LBBW (Switzerland) AG thanks to our years of cooperation. I am confident that we are the ideal partner for the new clients that will be joining our bank."
The proposed sale comes in the wake of a LBBW restructuring plan that has led the German regional bank in a new strategic direction since getting into trouble during the financial crisis.
While the group’s Swiss private bank will be shut down, with some client advisors being transferred to Notenstein, LBBW will retain a presence in Zurich with its advisory business for corporate customers.
Notenstein private bank was formed in 2012 when the non-US wealth management business of Wegelin was sold to the Raiffeisen group – its current parent company. Wegelin folded after becoming mired in a damaging tax evasion scandal with the US.
Notenstein confirmed that it does not do business with US clients, hence its decision not to take on that part of the LBBW Switzerland private bank portfolio.
The number of private banks in Switzerland has been steadily declining since the 2008 financial crisis and subsequent global crusade against tax evasion. PricewaterhouseCoopers predicted this week that up to a quarter of remaining private banks could disappear in the near future.