The Lugano-based BSI private bank is set to change hands for a second time within the space of months amid its own legal issues and those of current owners BTG Pactual.
The Swiss headquartered EFG group agreed a CHF1.33 billion ($1.34 billion) sale price on Monday with Pactual, which had only completed its own takeover of BSI last autumn. The combined EFG/BSOI entity will become one of Switzerland’s largest private banks with CHF170 billion of assets under management.
The sale comes against the backdrop of adverse legal publicity at both BSI and Pactual. BSI paid the highest penalty ($211 million) last year in the United States tax evasion programme and now has one of its employees facing a court probe in Singapore connected with the 1MDB Malay sovereign wealth fund fiasco.
Pactual has also been dragged into recent legal complications after founder André Esteves was jailed in Brazil during a probe into the Petrobras corruption scandal. Esteves was later freed on bail, but analysts believe the case has left the Brazilian bank short on liquidity.
The BSI sale has answered a welter of speculation of what would happen to the private bank. Several suitors were rumoured to have been interested in buying BSI before EFG sealed the deal.
EFG plans to raise around CHF750 million in capital from the financial markets to fund the deal. In return for selling BSI, Pactual will take a 20% stake in EFG. The transaction is expected to be completed towards the end of this year, subject to regulatory approval.