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Julius Baer eyes Coutts international arm, wary of bidding war

September 21
10:05 AM 2014

Swiss private bank Julius Baer is interested in acquiring Coutts International, a unit of Royal Bank of Scotland, but will not get into a bidding war for the venerable British bank's overseas arm, a Swiss paper reported on Sunday.

"Coutts has to be an issue for us, if only because of the name and the brand," Julius Baer chief executive Boris Collardi told mass-market newspaper Sonntagsblick in an interview.

RBS said in August it was considering selling the international arm of Coutts in a deal that industry sources said could net it as much as $1 billion.

Collardi said there had been no talks with RBS.

"I'm sure RBS will contact us once they have decided what to do with Coutts," he said. "We are in the comfortable position that we can wait. There are not many banks that can integrate a business of that size."

The Swiss bank would not enter an auction for Coutts International, he added, since that would simply drive up the acquisition price and would be "a waste of time".

People familiar with the sale process have said that the international wing of the 322-year-old British private bank could be split into Asian and European parts to attract more buyers.

RBS, which is 81-percent owned by the British government following a 45 billion pound rescue during the 2008 financial crisis, is under pressure to focus on lending to UK households and businesses to support Britain's economic recovery.

Julius Baer has been an active acquirer, picking up Bank of America Corp's overseas wealth arm for 860 million Swiss francs two years ago and, in July, the private banking activities of Israel's Bank Leumi in Luxembourg and Switzerland for up to 70 million francs.

Collardi also reiterated his rejection of talk that Julius Baer could be taken over by Credit Suisse.

"There is nothing going on between us. Many of our customers have reacted very negatively," he told Sonntagsblick.

A Julius Baer spokesman was not immediately available to comment on Sunday.

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