* Safra, Chinese bank, European tandem bid for BSI-sources
* Two out of three non-binding bids exceed EUR 2 bln-source
* Swiss rivals not appealed by BSI so far-sources
* Japanese, Middle Eastern players reviewing bids-source
* Private equity players could join race-sources
By Sophie Sassard
LONDON, Jan 18 Brazilian-Swiss bank Safra and a
Chinese bank are among the three bidders for Generali SpA's
Swiss private bank, BSI, in a deal worth 2 billion
euros ($2.66 billion) that could help the Italian insurer shore
up capital levels, two people familiar with the situation said
The Italian insurer, led by new CEO Mario Greco, aims to
raise 4 billion euros ($5.3 billion) from asset sales to meet
new industry rules on capital buffers.
Safra, a Chinese bank and a European consortium made up of a
bank and private equity firm have made non-binding offers and
are now reviewing BSI's accounts, one of the sources said.
One of the people said the Chinese bidder was Industrial and
Commercial Bank of China (ICBC).
"We see a lot of interest, but we are also aware it is a
tough sale," said one of the people, who declined to be named
because the talks are private.
"It is difficult to predict how the process will evolve when
you have interested parties from distant regions who do not
necessarily have expertise in private banking."
Safra and Generali were not immediately available for
Europe's third-largest insurer bought BSI just before the
financial crisis and has been trying to sell it for more than
Price had so far been the main sticking point since
potential buyers believed BSI was worth less than its book value
of 2.3 billion Swiss francs ($2.46 billion, 2 billion euros),
two people working for possible suitors said.
Emerging country players are showing a growing appetite for
wealth management assets as their well-off clients seek a "safe
haven" for their money in Western countries, especially in
places such as Switzerland and Luxembourg, one of the people
Japanese firms Mizuho Bank Ltd and Sumitomo Corp
, a Chinese private equity fund and Middle Eastern
players in Qatar and Abu Dhabi have also shown interest in BSI,
but have not made offers so far, one of the sources said.
Safra already paid 1.04 billion Swiss francs ($1.07
billion)to take control of its Swiss rival, Sarasin, last year,
beating Julius Baer, Switzerland's third-largest
The Qatar Royal family teamed up with Luxembourg to buy
bailed-out Dexia SA's private banking arm for 730
million euros ($950 million) in 2011. (ID:nL6E7NK1J1]
PRIVATE EQUITY INTEREST
Swiss rivals UBS, Julius Baer, Credit Suisse
and Union Bancaire Privee (UBP) have not expressed
Rising costs and falling revenues are also driving a
much-needed consolidation in the private banking industry.
But capital shortfall in the financial sector and a clamp
down on tax evasion have long been standing in the way of
Smaller Swiss private banks are suffering from lower fees as
their clients sit on safer assets, as well as higher costs from
investments in technology needed to comply with new capital,
risk, and compliance rules.
Julius Baer agreed to pay 860 million Swiss francs ($882
million) for loss-making Bank of America's non-U.S.
wealth management assets because the deal helped it boost its
assets managed by 40 percent.
Bankers predict more is to come, especially in countries
like Switzerland which host over 300 private banks.
This could translate into opportunities for private equity
firms looking for bargains, as these firms have no capital
constraints and money to invest, bankers said.
But regulators, concerned over funds' short term investment
horizon, tend to oblige them to team up with an industry player
to ensure capital needs will be plugged in the long-term.
Private equity firms including Carlyle, KKR,
Apollo, Apax and Blackstone are expected to be more
active in that space and could even join the race for BSI,
provided they found the right horse, two people familiar with
the situation said.