BTG goes to Switzerland for private banking

By:
Rob Dwyer
Published on:

BTG Pactual to acquire Swiss private bank BSI; in line with bank’s international strategy.

Andre Estevez-envelope
BTG Pactual's chief executive André Esteves said in a conference call that more international deals would follow


BTG Pactual is acquiring Swiss Private Bank BSI in a deal that will boost the Brazilian bank’s international private banking proposition. 

The deal, which is subject to regulatory approval and is expected to close in the first quarter of 2015, is in line with the bank’s strategy to develop an international network for its private bank as the domestic market slows. 

BSI has roughly $100 billion in client assets (a similar size to BTG Pactual) and, more importantly for the buyer’s expansionary ambitions, 2,000 employees in 10 countries, as well as the 140-year old brand, which will be retained and become the bank’s global private banking platform.

Solvency levels

BTG Pactual will pay Italian insurer Generali SFr1.5 billion ($1.68 billion), 80% of which will be in cash from the bank’s balance sheet and the remaining 20% in stock. Generali has been trying to offload BSI for three years to increase its solvency levels, and the insurer says the deal will add nine percentage points to take its solvency ratio to 160%.

BSI’s large presence in Switzerland, the world’s largest private banking market, had become more of an obstacle than an attraction to other potential buyers as the US and other western countries are scrutinizing banks in the jurisdiction.

No one from BTG Pactual was available to discuss the transaction, but chief executive André Esteves said in a conference call that more international deals would follow.

"It’s good for the world to have a global investment company like us headquartered in an emerging market," he reportedly said. "It adds a little bit of colour to the financial arena. We are entrepreneurs. We have capital, reputation, motivation and ambition to continue to grow."