German lender DZ Privatbank will shutter its branch in Singapore, research by finews.ch revealed. The business in Zurich is also being considered by interested parties.
«The cooperation agreement with Bank of Singapore (BoS) has been concluded. DZ Privatbank Singapore (PBSG) will thus stop doing business on December 31, 2016,» the bank told finews.ch in a statement.
The relationship managers at PBSG will switch to BoS and continue to be available for their clients, the company also said.
In a bid to meet the rapidly rising demands required by being based in Singapore, the bank decided six months ago to find a local partner and forge a cooperation agreement, DZ Privatbank explained.
The Perfect Storm
Private banking in Singapore is becoming an increasingly tough business for foreign players. Rising regulatory demands, cost-sensitive clients, difficult market conditions and tough competition are all weighing on margins.
«The perfect storm» is how Urs Brutsch, founder of Singapore-based HP Wealth Management recently described the current conditions.
PBSG will be the second takeover of a foreign bank by BoS this year, having recently concluded the acquisition of Barclays Wealth. Two years ago, Singapore's DBS, bought the Asian private banking business of Société Générale.
DZ Privatbank is majority-owned by Deutsche Zentral-Genossenschaftsbank (DZ Bank), based in Frankfurt. Outside Germany, it also has a branch in Zurich and a few other financial centers.
Cooperation in Switzerland?
The bank is in talks with Notenstein Privatbank regarding a cooperation agreement in Switzerland. Notenstein is a unit of Raiffeisen, which also has its roots in cooperative banking.
Despite the agreement with BoS, DZ Privatbank will stick to its strategy of «local.national.international» and continue developing private banking in Luxembourg and Zurich, the bank told finews.ch.
