BSI Sale: Photo Finish Approaching

BSI Bank in Lugano

BSI Bank in Lugano

In the sale of Ticino bank BSI, three serious interested parties are still in the running, finews.ch research confirms. However, the prospective buyers from Brazil have all dropped out.

The Brazilian finance group BGT Pactual, in need of liquidity due to domestic problems, wants to offload its Ticino subsidiary BSI as quickly as possible. However the task is proving to be a difficult one – for various reasons.

Firstly, a BSI employee in Singapore is implicated in the corruption affair involving the 1MDB Malaysian state fund, as previously reported by finews.ch. Secondly, in the past few days, some of the strong prospective buyers from Brazil have dropped out of the bidding race, as local research by finews.ch shows.

Difficult Situation in Brazil

It has been reported that the Institute Itau, J. Safra Sarasin and Banco BM&FBovespa have all exited from the sales process. Sources in Rio de Janeiro indicate that the (currently challenging) domestic market is demanding more attention, making it difficult for these financial institutions to devote sufficient resources to an acquisition.

On the other hand, the entanglement of a BSI banker in the state fund scandal in Singapore should not have any impact on the schedule for the disposal of BSI. According to sources inside BTG Pactual Group, it is business as usual on the sale.

Three Candidates With Good Prospects

Nevertheless a sale is not expected before March, because none of the three interested banks has yet received approval for an (exclusive) due diligence audit.

Among the candidates with the best prospects are the Swiss private bank EFG International, Tessiner Kantonalbank (Banco Stato), as well as – often mentioned – Credit Suisse.

Julius Baer boss Boris Collari has little or no interest in acquiring BSI, he informed the media last week (finews.ch article in German).

Partial Interest From Asia

As reported by finews.ch, EFG International is prepared to offer 1.2 billion francs for BSI. The Ticino bank currently has assets of 90 billion francs under management. Of this total, some 15 billion is on the books in Asia, BSI Asia boss Hanspeter Brunner told finews.ch (article in German).

Singapore DBS Bank, currently on a brisk growth path, might also be interested in the Asian deposits. Two years ago DBS Bank purchased 12 billion francs in client assets from the private banking business of Société Générale (finews.ch article in German).

Recently, DBS also expressed significant interest in the Asian assets of Coutts. However, Coutts’ parent company, Royal Bank of Scotland, last year opted to sell the financial institution in its entirety – to Union Bancaire Privée (UBP) in Geneva.

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