By Margot Patrick, Giovanni Legorano and John Letzing
LONDON--Amidst a global crackdown on tax evasion that has shaken
up Switzerland's offshore financial center, Standard Chartered PLC
is seeking a buyer for its Swiss private bank, while two investment
funds are looking at the Swiss wealth-management unit that Italian
insurance giant Assicurazioni Generali SpA has put on the
block.
Standard Chartered, which still aims to grow its private banking
in other financial hubs including Singapore, Hong Kong and London,
is selling the small Swiss unit after deciding it wasn't crucial to
its efforts to be a dominant force in trade financing, investment
and wealth management across Asia, Africa and the Middle East. It
will continue to run a commercial bank in Switzerland.
Meanwhile, investment companies Cinven and Investindustrial have
been looking at BSI, a Swiss-based bank that Generali put up for
sale more than a year and half ago as part of its efforts to
improve its financial position and refocus on core businesses,
people familiar with the matter said. These people also say
Portuguese lender Banco Espirito Santo has been interested in
buying BSI but has put those plans on hold due to the asset quality
review the European Central Bank is carrying out on euro-zone
banks. A spokesman for Banco Espirito Santo didn't reply to an
email seeking comment.
The moves come as both companies are trying to shed noncore
operations and boost their financial health. Since Mario Greco took
the helm of Generali in August 2012, the company sold a number of
businesses or stakes in companies, including part of its shares in
Banca Generali and a U.S.-based reinsurance business. Standard
Chartered Chief Executive Peter Sands pledged in November to
counteract a slowdown in some of its significant markets by getting
out of businesses with limited appeal.
Meanwhile, Swiss private banking has become a tougher business
in recent years. The country's banking system has been turned
upside down by intense legal pressure from U.S. and European
authorities aiming to track down undeclared assets hidden in Swiss
accounts, spooking clients and driving a steady flow out of the
world's largest offshore financial center. Indeed, such pressure is
complicating the sale of BSI, with Italian authorities gearing up
for a fresh crackdown on Italian money stashed in Switzerland.
More than a third of Switzerland's roughly 300 banks, including
the Swiss units of Barclays and Coutts, have signed up for a U.S.
Justice Department program unveiled last year that enables lenders
to exchange information about U.S. accounts in exchange for
guarantees that the banks won't be prosecuted.
Standard Chartered hasn't disclosed whether it signed up for the
DOJ program, but it is under extra pressure to stay on the right
side of U.S. laws after signing two-year deferred prosecution
agreements with the DOJ and New York attorney general in December
2012 over transactions with Iranian clients.
A spokesman said the decision to sell the Swiss unit was made
after a "comprehensive review." He declined to say if potential
buyers have been contacted.
Standard Chartered's planned exit also highlights how the
private banking business is shifting away from Switzerland and to
the emerging markets.
Standard Chartered declined to say how much money the Swiss
private bank manages or how many clients would be affected, but
with just 65 employees, it is far smaller than Swiss private
banking giants UBS AG and Credit Suisse AG.
Meanwhile, one person familiar with the matter said it would be
difficult for Generali to sell the business for more than 1.5
billion Swiss francs ($1.7 billion), slightly less than two-thirds
of its book value. Tax amnesties launched in Italy in recent years
have driven money out of Swiss banks. A new effort by Rome to push
Italian tax evaders to come clean also is weighing on the price for
BSI, the person said.
Write to Margot Patrick at margot.patrick@wsj.com, Giovanni
Legorano at giovanni.legorano@wsj.com and John Letzing at
john.letzing@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires