Credit Suisse Agrees To Sell Domestic German Private Banking Business

Tom Burroughes

5 December 2013

Continuing a run of acquisitions and disposal moves by the Zurich-listed bank and other wealth managers in recent months, for an undisclosed sum.

The agreement, if approved, will see ABN AMRO take over a business that has more than €10 billion ($13.6 billion) in assets under management for domestic clients who have investible assets of at least €1 million, ABN AMRO said in a statement today.

“With this acquisition ABN AMRO further strengthens its private banking activities in Europe. The acquisition positions Bethmann Bank, ABN AMRO’s private bank in Germany, as the third largest private bank in Germany,” the bank said.

Jeroen Rijpkema, chief executive of ABN AMRO Private Banking International, said: “It is part of our strategic focus to be a leading European private bank. The acquisition of these activities fits perfectly well with our strategy and client focus. It also broadens our service offering to clients and enhances our local network.”

The planned transaction is subject to certain conditions being met, including approval by the relevant merger control authorities. Closing of the transaction is expected in the course of 2014.

The banks had been about to sign such a deal, Reuters reported yesterday, but Credit Suisse had declined comment, it said.

Such a deal would fit with the aim of Credit Suisse to focus on ultra-high net worth clients rather than people with lower investible assets, an approach taken by a number of private banks looking to bolster margins in an increasingly highly regulated environment.

Credit Suisse has made a number of M&A deals in recent months, selling its Clariden Leu (Europe) business to Falcon Private Bank, on the one hand, and acquiring part of Morgan Stanley’s international wealth management business, on the other.

In its latest results, the private banking and wealth management arm of Credit Suisse today reported pre-tax income of SFr1.018 billion ($1.14 billion) in the third quarter of this year, up from SFr936 million a year ago and up from SFr917 million in the previous three months. Private banking and wealth management recorded net new assets of SFr8.1 billion in 3Q13. The wealth management clients arm contributed net new assets of SFr3.2 billion with continued strong inflows from emerging markets and from the ultra high net worth individual client segment, partially offset by continued cross-border outflows in Western Europe.

As for ABN AMRO, its private banking arm today reported a net profit of €125 million in the first nine months of 2013, almost doubling last years €64 million result.