Fined Zurich private bank to close doors
Switzerland’s Leodan Privatbank is to become the latest Swiss financial institution to end its operations as an independent entity.
A spokesman for the Zurich-based institution said the bank was hanging up the Leodan name because it is too small to survive in today’s tougher regulatory environment, and that it is currently in talks with a “medium-sized” Swiss bank to take on its clients and some of its employees.
He said the decision was unrelated to Leodan having reached a $500,000 settlement with the US Justice Department earlier this week, to avoid possible prosecution for reportedly helping Americans evade taxes.
“I can’t tell you the name [of the other bank], but it’s not one of the large ones, or small ones,” he added. “We are really close to signing the contract, and expect to announce [the name and other details] in February.”
According to Reuters, Leodan looked after around around SF500m ($492.32m) on behalf of its clients.
In a statement on its website, Leodan says that, following a general meeting, Leodan Privatbank AG “decided on 11 January 2016 to team up with a strong partner bank”.
“The relevant negotiations are well advanced and are close to a conclusion,” it continues.
“We currently assume that the new owner will take over all existing customer relationships.
“We believe that the realignment is a great opportunity for everyone involved. Upon completion, we will ensure a fast and orderly transition to the new partner, even [on] the personal side.”
Further details weren’t yet available, the statement concluded.
According to information on the Justice Department’s website, Leodan had been organised as a corporation owned by private shareholders since it was launched in September 2009. Until August 2015, it had been known as PHZ Privat- und Handelsbank Zürich AG, changing its name “as part of a new business strategy”.
It focused on asset management – encompassing advisory, brokerage and custodial services – for private and institutional clients, and operated out of a single office in Zurich.
According to Reuters, Leodan is the 77th Swiss bank to agree a settlement through a US programme launched in 2013 to enable banks to resolve their potential criminal liabilities in the United States.
One of the best known Swiss institutions to close as a result of the American pursuit of banks found to have helped Americans evade taxes was Wegelin, which was Switzerland’s oldest bank in 2013 when it announced it was to close. It had been established in 1741. It agreed to pay $57.8m (£36m) in fines to the US, after which it said it would “cease to operate as a bank”.