Banque J. Safra Sarasin has announced the acquisition of Bank Leumi Luxembourg’s private banking business, in a bid to expand its private banking presence in the region.
As a result of the transaction, Safra Sarasin will take over responsibility for Bank Leumi Luxembourg’s clients and relationship managers. Services of Bank Leumi had been tailored to Ultra High Net Worth and High Net Worth clients.
The agreement comes as a number of Israeli banks have announced their withdrawal from European private bank operations, due to, among others, profitability and fiscal compliance concerns. This includes Israel Discount Bank, which sold its Swiss unit to Hyposwiss private bank Genvève earlier this week.
Just as their international counterparts, the move to sell Israeli private banking units was also reinforced by the global crackdown on tax evasion. Last year, Bank Leumi had already settled with US authorities to pay a $400m fine for helping US account holders to evade taxes.
Jacob J. Safra, Vice Chairman of J. Safra Sarasin Group, commented: “This acquisition underlines our position as a consolidator in the European private banking market. Our capital strength and family ownership provides great flexibility to do such transactions. Bank Leumi’s Luxembourg business sits ideally within our strategic focus, providing tailor made solutions to clients.”
The acquisition is expected to be completed during the course of the first quarter of 2016, subject to regulatory clearance. The financial terms of the agreement were not disclosed.