Kleinwort Benson’s disposal by its German parent, Commerzbank, is not a fire sale and Kleinwort will look carefully at potential suitors to ensure it builds on its strengths in areas such as specialist investment and fiduciary services, the blue-blooded firm’s chief executive told WealthBriefing yesterday.

"We are not under huge pressure to come to a solution but we know there is a roadmap that we are going down. We would be looking for a partner that would be able to distribute our services and products and reinforce that with additional expertise. We would be looking to consolidate our fiduciary services in the Channel Islands,” Robert Taylor said in an interview.

“We offer very strong discretionary portfolio management as well as advisory; we provide products that offer absolute return strategies, for example, and cash management strategies. We are a bit edgier than most private banks in our offerings,” Mr Taylor said.

Kleinwort Benson has about £6.4 billion ($9.62 billion) of assets under management and £21 billion of assets under administration, with a total staff of around 650 people in the UK, Guernsey and Jersey.

Graham Harvey, senior associate at Scorpio Partnership, a wealth management strategy consultancy, said Credit Suisse was a viable buyer of Kleinwort Benson, although it would be a major strategic move as the Swiss bank paid relatively little attention to its UK onshore business. A private equity buyer was also possible, he said, as the bank was not so big as to be out of a private equity purchaser's reach, he said.

Commerzbank has already moved to sell banking operations in Luxembourg and Switzerland as part of the tighter focus on its core German market.

The determination by governments and regulators to force banks to focus on their core, domestic banking sectors is a key driver of such moves, said Ian Woodhouse, an independent consultant to the private wealth management industry.

“This sale goes back to the issue of governments taking stakes in banks and they are having an influence on the future developments of those banks. This has happened, for instance, in the case of Citigroup, with its joint venture [financial advisor] deal with Morgan Stanley,” Mr Woodhouse said.

“I think we are going to see a lot more of this sort of deal. You are going to see the creation of a lot more focused banks. The sale of Kleinwort Benson will be interesting as it has an established brand name,” he added.

A merger and acquisition advisor to the banking industry, who asked not to be named, told WealthBriefing: "This is purely a Commerzbank issue due to its need to comply with restructuring regarding their government funding. What we assumed is that Kleinwort Benson's investment banking will be sold and Kleinwort Benson's private bank will be kept in order to allow a management buyout for it."

"Both entities are having, at best book value or sub-book value valuations and thus Commerzbank may end up depleting its capital marginally rather than the converse," the person added.

In his interview, Mr Taylor said he expected the timing and details of the sale process will become clearer by the end of the current quarter.

The decision by Commerzbank to spin off its UK wealth management business part of the conditions for receiving state aid, is part of a continuing trend that will produce similar moves, industry figures say. Kleinwort Benson's sale comes amid the European Commission’s decision on the German government’s capital injection into Commerzbank.

The European Commission has stipulated that Commerzbank must specifically focus on German domestic banking activities and it must therefore dispose of some of its foreign businesses.

There have been some recent senior management changes at Kleinwort Benson. It appointed Chris Burton from RBS Group in March this year as its new head of private wealth management international. In January, it appointed Gordon Scott to lead its Scottish and Northern Irish operations based in Edinburgh.

Kleinwort Benson was taken over by Commerzbank from German insurance and investment giant Allianz in the autumn of last year.