RBS thinning out bidders for Coutts
LONDON, GENEVA — The Royal Bank of Scotland Group (RBS) is narrowing the field of bidders for its Coutts International private-banking arm to focus on Switzerland’s Union Bancaire Privée (UBP), people with knowledge of the matter said.
UBP is the preferred bidder and an agreement might be reached as early as this month, said the people, who cautioned that the talks could still be delayed or fall apart. RBS was also considering offers from Credit Suisse Group and a joint bid from Société Générale and DBS Group Holdings, they said.
The transaction had been held up by negotiations over the price, which was under pressure because of the unexpected surge in the Swiss franc, a German investigation into Coutts’ private bank and the political storm over tax evasion engulfing London-based HSBC Holdings, one of the people said.
RBS CEO Ross McEwan is looking to sell the Zurich-based international unit of Coutts as part of a plan to reduce costs and focus on wealthy individuals in the UK. Private banks in Switzerland are being squeezed as global probes into tax evasion lessen the country’s appeal as a tax haven and erode profitability.
Coutts International had Sf32.6bn ($32.3bn) in assets under management at the end of 2013 and reported a full-year net loss of Sf45.1m, according to its annual report. The unit could fetch $600m to $900m, a source has said.
UBP, founded by Edgar de Picciotto in 1969 and based in Geneva, had Sf98.7bn of assets under management at the end of last year, according to company filings. The bank acquired the Swiss unit of ABN Amro Bank in 2011 and integrated the international private banking business of UK lender Lloyds Banking Group in 2013. UBP also bought Nexar Capital Group, an alternative investment manager, in 2012.
RBS has said Coutts in Switzerland is being investigated by German authorities over alleged tax evasion by clients, and is participating in a US justice department offshore disclosure programme for Swiss banks.
Mr McEwan said last month that RBS would provide an indemnity to any potential buyer to protect it from the probes. The lender was in the final stages of the sale and would make an announcement within the next couple of months, he said.
