Dresdner sells Latin American advisory unit

Thomas Coyle

15 June 2005

The German bank wants to concentrate on home-market private clients. Dresdner Bank plans to sell its Dresdner Lateinamerika Financial Advisors unit to EFG Capital International, a Miami-based subsidiary of Swiss EFG Bank. The deal comes roughly six months after Dresdner sold its Latin American private banking business to UBS, another Swiss Bank, in a bid to concentrate its efforts on European wealth markets.

Neither side would disclose the terms of the transaction.

EFG Bank says the acquisition will strengthen its franchise in Latin America, which it considers important to its growth. “We will be able to expand our product offerings and further enhance our client services,” says EFG Capital International CEO Victor Echevarria . The bank adds that it will absorb DLFA, which has a staff of 25, directly into the acquiring unit.

Its own backyard

Late last fall, Dresdner, part of the Frankfurt-based Allianz Group, decided to restructure Dresdner Bank Lateinamerika. Dresdner CEO Herbert Walter bills that as part of the bank’s efforts “to conquer the future” – specifically by positioning itself as “the leading European integrated financial service provider.” It re-absorbed the corporate and investment banking parts of its Latin American subsidiary into its German operations and – as mentioned – sold the private bank to UBS.

From a wealth management perspective, these developments suggest that Dresdner – reeling from a few disastrous years in the early part of this decade – is keener on trying to gather private assets on or near its home turf than on chasing them halfway across the globe. Over the past four or five years European governments have passed legislation to encourage the repatriation of assets from foreign banking havens – read Switzerland.

To make up for dwindling flows of foreign private-client assets, Swiss banks have gone on a cross-border shopping spree with UBS leading the way. In 2003 it bought Lloyds Bank in France, Merrill Lynch's German private banking operations, and U.K. firms Laing & Cruickshank and Scott Goodman Harris. In 2004 it bought German multi-family office Sauerborn Trust in addition to Dresdner’s Latin American private bank. Besides those acquisitions, it has opened new private-client offices in France, Germany, Italy, Spain and the U.K.

Nine-year-old EFG Capital International is a U.S.-registered broker-dealer. Its parent EFG Bank is part of the Geneva-based EFG Group, one of the five biggest financial service companies in Switzerland.

DLFA was formed in 2002, the result of a merger with Dresdner Bank Lateinamerika’s Miami-based private banking business with Vestrust Securities. It has about $1 billion in assets under management. –FWR

Purchase a reprint of this story.