Syz benefits as another foreign bank exits Switzerland

Syz has doubled the amount of wealth it manages for the rich by taking over RBC Keystone

Swiss private bank Syz has acquired the Geneva wealth management operations of the Royal Bank of Canada (RBC) as the exodus of foreign banks from Switzerland continues.

Syz announced on Tuesday that it has taken over RBC Switzerland for an undisclosed fee, taking on its CHF10 billion ($10.6 billion) in assets. The takeover is still subject to approval from the Swiss regulatory authorities.

If approved, the deal will nearly double the amount of assets that Syz manages for the wealthy to CHF22 billion. Together with its asset management services, Syz will have some CHF40 billion of assets under management.

“This acquisition will enable Banque Syz to access new markets in Latin America, Africa and the Middle East, where strong entrepreneurship, one of our founding values, is expanding. It also represents a major step forward in terms of the Group’s growth strategy,” chief executive Eric Syz said in a statement.

RBC’s withdrawal from Switzerland continues a pattern of foreign-owned entities leaving the Swiss private banking market since the financial crisis.

“The decision to sell RBC Suisse fits with our stated long-term growth strategy to build a focused global wealth management business that serves high net worth and ultra high net worth clients in priority markets from our hubs in North America, the British Isles and Asia,” said George Lewis, group head, RBC Wealth Management and Insurance, in a statement.

The number of foreign-owned banks in Switzerland peaked at 169 in 2009, but has fallen to 122 with the withdrawal of RBC.

The consolidation of the sector has been blamed on several factors. These include the need of some banks to sell off non-core operations after being hit by the financial crisis and fears by others that they could be adversely impacted by the global crusade against tax-avoidance, which has centered on Switzerland.

However, it has not all been one-way traffic for foreign-owned banks in Switzerland. The sector has been boosted recently by arrivals from emerging economies, such as Brazil. The imminent arrival of the China Construction Bank this year has raised hopes that other Chinese banks may soon open Swiss offices, following Switzerland’s recent status as a renminbi trading hub.