The UK regulator has approved the sale of the investment banking arm of Arbuthnot Banking Group, which includes the private bank brand Arbuthnot Latham, to UK-based Westhouse Holdings.

The deal, which was initially announced in November last year, is expected to go through on 20 January. The financial terms have not been disclosed.

A spokesperson for Arbuthnot told this publication that the transaction means that the group will have more time to spend on its private banking operation and retail brand, Secure Trust Bank.

In a trading statement released last week, the London-listed group said that the sale of its investment bank was one of its most important events in 2011, but because it was not completed before the end of the year, Arbuthnot Banking Group reported ÂŁ8 million ($12.3 million) in trading losses for the year. However, for “the continuing operations”, the firm expects to make a full-year profit of ÂŁ5 million.

While a relatively small firm compared with some of the world’s banking giants, Arbuthnot's decision can be viewed as significant as it shows how investment banking, once a "must-have" business for many large firms, is falling in popularity because of market volatility and burdensome regulation. At the same time, some large firms, such as Credit Suisse and Citigroup, insist that investment banking is an important business offering alongside wealth management.