Banque Privée Espirito Santo, the Swiss private banking subsidiary of the Portuguese Espírito Santo Financial Group which is headquartered in Luxembourg, has agreed to sell part of its Swiss private banking business following financial troubles at its parent company.

Banque Privée Espirito Santo, the Swiss private banking subsidiary of the Portuguese Espírito Santo Financial Group which is headquartered in Luxembourg, has agreed to sell part of its Swiss private banking business following financial troubles at its parent company.

Swiss-based private bank Compagnie Bancaire Helvétique Group said in a statement that it had acquired Banque Privée Espirito Santo’s client portfolio for the Iberian and Latin American regions. The details of the transaction were not revealed.

CBH said that the acquisition represented a “significant step for the development” of the bank.

Banque Privée Espirito Santo's president of the board of directors, Jose Manuel Espirito Santo, said that the deal with CBH offered an "excellent solution" and that it was the best means to "defend the interests of our customers and staff".

“We believe that [the agreement] provides a significant opportunity for the bank to expand its business in the Iberian and Latin America markets,” Philippe Cordonier, chief executive of Compagnie Bancaire Helvétique, said.

“We are delighted to welcome the new team with whom we share a common strategic vision focused on a close relationship with customers,” he added.

The news comes after a number of troubles for the main group, which is owned by the high-profile Espirito Santo family. Luxembourg's district court said in a statement earlier this week that it had agreed to a request from Espirito Santo International on Friday to be placed under "controlled management". This followed allegations last month of a number of financial irregularities at the firm.

M&A activity

The move is also a sign of continued busy M&A activity in the European wealth management arena, including Switzerland, as firms look to sell businesses that have become unprofitable, sometimes in the face of increasing pressure on Swiss bank secrecy laws and legacy issues associated with them.

Amid an environment of increasing regulatory costs and falling profits, there have been a number mergers and acquisitions in Switzerland in the past year.

Earlier this month, Banco BTG Pactual, the Latin American investment bank, bought wealth management firm BSI from Italian insurer Generali for SFr1.5 billion ($1.68 billion). BSI has a footprint in several regions, including Asia.

In June, HSBC Private Bank (Suisse), the Swiss subsidiary of Hong/Kong London-listed banking giant HSBC, agreed to sell a portfolio of its private banking assets in Switzerland worth $12.5 billion to Liechtenstein's LGT Bank (Switzerland), as part of its strategy to streamline its business in the US and Europe.

Other big deals in the past year have included Credit Suisse buying part of the non-US wealth management business of Morgan Stanley. Julius Baer also bought the non-US wealth arm of Bank of America Merrill Lynch, while Lloyds Banking Group has sold an international private banking arm to Union Bancaire Privee. There are more than 300 banks in Switzerland – a number that has fallen from around 375 around 2000, according to the Swiss Bankers Association.