HSBC Trinkaus & Burkhardt International and HSBC Trinkaus Investment Managers, the Luxembourg-based subsidiaries of HSBC Trinkaus & Burkhardt, are selling their private banking activities and private banking-related fund business to the Lichtenstein-headquartered VP Bank Group.

The deal is expected to be completed before the end of 2013, VP Bank said in a statement.

Approximately 20 employees working for HSBC Trinkaus & Burkhardt are expected to transfer to VP Bank in Luxembourg as part of the sale.

HSBC said that at 30 June 2013, the private banking activities to be sold had assets under management of approximately €1.5 billion ($2 billion) and the private banking-related fund business had assets under administration of approximately €0.7 billion ($0.9 billion).

“With this acquisition, we are making targeted use of the currently attractive market opportunities. It is in line with our strategic orientation to achieve growth both within the middle segment of private banking and within the intermediaries business," said Alfred Moeckli, chief executive of VP Bank Group.

VP Bank Group recently shook up its top management structure to make itself more efficient in serving clients, by merging the two client-oriented business segments, Banking Liechtenstein & Regional Market and Private Banking International.

VP Bank had client assets of SFr37.3 billion ($39.6 billion) at the end of December 2012. The firm has a cost/income ratio of 63 per cent, compared with a wealth management industry average of around 78 per cent, according to recent industry analysis.