Private bank Banque de Luxembourg is to acquire HSH Nordbank Private Banking, the private client business of the Kiel and Hamburg-headquartered firm.

The agreement was signed by Torsten Heick, vice-president of the board of directors of HSH Nordbank Private Banking, and Pierre Ahlborn, president of the Comité de Direction of Banque de Luxembourg. The transaction entails the assets held by HSH Nordbank Private Banking’s private clients, who are mostly German. It is expected to take legal effect in the second half of the year, the firm said in a statement.

“This acquisition forms part of our efforts to develop our core activities, namely private banking, in which we play a leading role in Luxembourg. We are convinced that given the conditions currently prevailing in Europe Luxembourg’s appeal as a financial services centre has continued to grow - not least of all thanks to our expertise and the advantages we offer our private clients in the management of their assets, investment funds, and the quality of our services,” said Ahlborn.

“Over the past three years, Banque de Luxembourg has invested €150 million to reinforce the growth of its activities in these areas,” said Ahlborn.

Meanwhile Heick said that Banque de Luxembourg was a buyer “from whose expertise and positioning our clients will benefit” and that for HSH Nordbank the sale marks a further step in strategic realignment.

Banque de Luxembourg’s client assets under management were valued at €60.54 billion (around $88.1 billion) as at end 2010.

Established on 2 June 2003, HSH Nordbank is the result of the merger between Hamburgische Landesbank and Landesbank Schleswig-Holstein. Consolidated total assets were valued at around €150 billion at the end of 2010.