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Private banking EFG completes acquisition of BSI

BSI will operate as a separate subsidiary within EFG International for a limited time until its full legal integration


Zurich-based EFG International has completed the acquisition of Lugano-based BSI private bank from BTG Pactual. The preliminary purchase price is CHF1.06 billion ($1.07 billion).

This is significantly less than the CHF1.33 billion agreed with Pactual in February. In a statement on Tuesday, EFG said the “preliminary downward-adjustments of CHF217 million … reflect BSI negative net new money differences since November 30, 2015”.

Since the middle of this year alone, BSI’s assets under management have shrunk from CHF76 billion to CHF69 billion.

EFG said the final consideration for the purchase was still subject to customary final audit and hence further potential post-closing adjustments.

EFG International said it would exercise full management control of BSI with immediate effect. BSI would operate as a separate subsidiary within EFG International’s holding structure for a limited time until its full legal integration, expected in the second quarter of 2017.

“The closing of the acquisition marks a historic milestone for both EFG International and BSI. Together we are forming a leading pure play private bank with strong Swiss roots, a broad international presence and an entrepreneurial spirit,” said Joachim H. Strähle, CEO of EFG International, in a statement.

Adverse legal publicity

The sale in February came 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. and agencies

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