LGT, the private banking group owned by the Princely House of Liechtenstein, has reached an agreement with Dutch ABN Amro to acquire its private banking business in Hong Kong, Singapore and Dubai.

The acquisition with approximately $20 billion in assets under management by way of an asset purchase agreement marks a major step in LGT’s growth strategy and will further enhance its footprint in Asia and the Middle East. Financial details of the transaction were not disclosed. 

As a result of the transaction, LGT expects to increase its assets under management to more than $40 billion in Asia and to $160 billion overall.

While a foreign bank has won the race for this particular private banking asset, domestic banks have also shown appetite to bulk up in private banking.

Historical Links

The acquisition represents a significant enlargement of LGT's presence in attractive growth markets. The Liechtenstein-based bank hopes to build on ABN Amro’s position and historical links in the region.

The opportunity to acquire the business follows ABN Amro’s strategic decision to exit and focus on its private banking activities in Northwest Europe. LGT expects the deal to complete in the second quarter of next year, subject to regulatory approvals.

Profitable Business

«Building on our successful presence in Asia and the Middle East and on ABN Amro’s long tradition in serving clients in the region, this acquisition will allow us to further extend our market position and to achieve further profitable growth,» H.S.H. Prince Max von und zu Liechtenstein, CEO of LGT, said.

The target business includes private banking client relationships booked in Hong Kong, Singapore and Dubai and is profitable, LGT said.

Established in 1826

ABN Amro’s operations in Asia were established nearly two centuries ago in 1826, and clients include wealthy families, private investors and institutions across key regional markets in Hong Kong, mainland China, Taiwan, Indonesia, Malaysia, Singapore and the Middle East.

LGT's assets in Asia, where the bank first opened an office in 1986 in Hong Kong, assets under management are expected to increase to over $40 billion as a result of the transaction.

Swift Integration

In the Middle East, the deal more than doubles LGT's assets. Overall, LGT expects to increase its assets under management to around $160 billion as a result of the purchase.

The employees who will transfer from ABN Amro as part of the acquisition will be integrated into LGT’s regional entities in Hong Kong, Singapore and Dubai, respectively, and will continue to look after their clients. LGT said it seeks to integrate the ABN business swiftly.