M&A and restructuring trends in the Swiss private banking industry
Traditional M&A activity in the Swiss private banking market will continue to be constrained by sector uncertainties: we therefore expect consolidation to increasingly occur via ‘asset deals’, often in combination with bank liquidations.
Despite significant sector pressure on Swiss private banks to consolidate, few traditional M&A transactions have taken place recently. The most recent initiatives suggest that ‘asset transactions’, where an acquirer purchases portions of the seller’s client assets—rather than an entire legal entity—seem to have become the ‘new normal’. Small and large banks alike are increasingly using this route to dispose of selected activities that no longer form part of their core business, or in certain cases, to exit the Swiss market. Such transactions, where a selection of the assets are acquired, reduce the potential legacy risks arising from regulatory or fiscal issues and entail a more straightforward integration process, easing the
uncertainties currently faced by sector participants and improving value creation potential for sellers.
Although consolidation has not occurred on the scale many experts had anticipated, it is likely to continue over the short to medium term at an increased pace, but taking a different shape.
Inside magazine issue 5, June 2014
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