The chief executive of the UK wealth management firm, Rensburg Sheppards, has denied it breached confidentiality agreements by poaching a team of private bankers from Bank of Scotland, according to The Scotsman newspaper.

Lloyds Banking Group is understood to have threatened the Leeds-based group with legal action over the defection of eight managers, claiming breaches of contracts signed when Rensburg was looking at buying portfolios managed by the bankers, the newspaper said.

Moves of staff in the private banking industry has led to legal clashes in the past. Last year, for example, UBS sued the new UK wealth management start-up, Vestra Wealth, after the latter firm took a team of about 50 UBS managers. The firms later settled the matter.

In the Rensburg-BoS case, Rensburg’s CEO, Stephen Elliot, said his firm had not acted illegally, according to the newspaper.

"We don't feel there's been a breach of any contracts," he said.

Mr Elliot said Rensburg held preliminary discussions with HBOS about buying private client portfolios back in 2008, although the talks came to nothing. The sale was shelved by HBOS ahead of its takeover by Lloyds TSB.

Earlier this, year Mr Elliot said the company was approached by a headhunter representing the investment managers, which led to the switch, with Rensburg never engaging with Lloyds about a sale.

"A headhunter approached us, we didn't engage anyone," Mr Elliot said.

Lloyds sold £1.27 billion in assets under management to Rathbone last week, a deal which included £775 million in BoS private client funds.

Mr Elliot declined to predict how many of the approximately 4,000 BoS clients covered by the sale would follow their former managers to Rensburg, but said the deal could be of huge significance to its Scottish business. "This could be quite transformational for us to move the business forward," he said.