ZURICH (Reuters) - New York-based credit card and travel services company American Express Co (AXP.N) is expected to sell its private banking business within weeks, said a source familiar with the matter.
The sale, which could fetch between $1 billion and $2 billion, would be consistent with a worldwide trend in the wealth management industry towards increasing consolidation as the top players strengthen their hold.
”The sale of American Express Private Bank is likely to happen in the next few weeks,“ said the source. ”It will be sold, most likely to a global institution.
“It’s a significant one (sale) because it’s one brand that disappears from the wealth management scene. The brand can’t be sold.”
American Express’s private banking unit offers investment services, deposit accounts, treasury services, loans, fiduciary services and insurance. It has a network of representative offices in Europe, Asia, Latin America, the United States and Canada.
With estimated assets under management of around $20 billion, American Express’s private banking business could be sold for anything between $1 billion and $2 billion to a large bank, analysts said.
“Any of the big banks in Europe could be interested. Private banking assets are hard to come by,” said Simon Maughan, a banking analyst at Blue Oak Capital in London.
Banks such as Spain’s Santander (SAN.MC), Britain’s HSBC Holdings Plc (HSBA.L)(0005.HK) and Royal Bank of Scotland Group Plc (RBS.L) were all eager to grow their private banking operations, as were Italian banks such as UniCredit (CRDI.MI).
Private banking sat awkwardly with American Express’s core charge card and travel services businesses, said Maughan. “It is a premier card business and that does not mean you can run a private bank on the back of it,” he said.
In a letter to clients on the private bank’s website which appeared in May, American Express Vice Chairman Sergio Masvidal made no mention of any planned sale of the private banking business.
Masvidal also announced the opening of a new representative office in Bahrain and said American Express would be expanding its offering to clients of investment products.
The global wealth management business remains fragmented but is dominated by some very large players, such as UBS AG UBSN.VX, Credit Suisse Group CSGN.VX, Merrill Lynch and Co Inc MER.N and Citigroup Inc (C.N).