Swiss bank Syz & Co could spend up to 200 million Swiss francs ($219.5 million) on acquisitions to bolster its private banking and asset management operations, its owner said today.
The Geneva-based business is best known for a range of Oyster-branded funds but is having to contend with the costs of increased regulation associated with various tax crackdowns that are piling pressure on smaller players in the Swiss banking sector to sell up or close down.
Syz & Co, which opened for business 18 years ago and now manages 35 billion francs of assets, lost two of three partners when Alfredo Piacentini and Paolo Luban left this year.
That left more than 92 percent of its shares with co-founder and Chief Executive Eric Syz, who is adamant the bank won't be sold as a result but will seek its own deals.
"We're always looking. We've looked at three potential deals this year and two last year, but none of them worked out, mainly because of our quality standards," he told Reuters.
"You really only have one name and one reputation, and we don't want to jeopardise it."
Switzerland's banks have been busy grappling with a U.S. tax-evasion investigation that senior bank executives say is holding up consolidation in the country's private banking industry.
Syz & Co is not among the dozens of banks that have reported undeclared assets to U.S. authorities in a scheme brokered by the Swiss and American governments, but it is being stymied in its acquisition plans as the industry seeks to clear its accounts of tax dodgers.
"As we do not have a legacy problem, we are very prudent. We have no desire to buy something to resolve someone else's problem," Eric Syz said.
Clean Portfolios
"We either want clean portfolios or, if we're not dealing with particularly clean assets, we don't want to pay much for them," he added.
Bankers including Julius Baer Chief Executive Boris Collardi have flagged a new wave of consolidation after Swiss banks put the U.S. investigation behind them.
Pressure on Switzerland's banking secrecy laws has contributed to the pool of Swiss banks shrinking by about a fifth to less than 300 institutions between 2000 and 2012.
Of the Swiss private banks still in business, 34 recorded losses last year – 48 percent more than in 2012.
High staff costs continue to sap funds while spending on compliance with the U.S. tax program and other changes linked to banking secrecy have also taken a chunk out of profits, a study by consulting firm KPMG showed on Wednesday.
Private banking assets of about 13 billion francs put Syz & Co precariously close to what is viewed by experts as the minimum requirement for profitable survival. The bank reported a net profit of 26 million francs last year.
Eric Syz says the bank is mainly interested in buying untainted and declared assets and in Latin America.
"We'll never find an entirely clean portfolio – I don't believe those exist – but there are some that are relatively untainted, and with those the client geography is secondary."
