Vontobel is also a copious dealmaker, grabbing Notenstein La Roche last year – it financed the deal with a bond issue. The integration was anything but smooth, and the Zurich bank managed to hold onto about 13 billion Swiss francs ($13.8 billion) of the 16.5 billion in assets it originally agreed. 

Zeltner's Growth Plan

Julius Baer couldn't hold as much Merrill Lynch client money as it had hoped. The latest bank to hit dealmaking is KBL, a modest Luxembourg wealth group now run by UBS former top private banker Juerg Zeltner (pictured below). Last week, Zeltner bought Bank am Bellevue, which had foundered in its wealth efforts, as the first part of an aggressive expansion strategy through acquisitions including in Switzerland. 

It remains a well-known fact that banking acquisitions traditionally don't yield as much as expected. The cancellation of relationship contracts by clients is but one expression of the dilemma. Buyers among private banks see the leakage of clients as a process they have foreseen and therefore see as a normal occurrence.

Private Clients Don't Want Their Bank to Do M&A

Bergos-Berenberg-CEO Raskin begs to differ. «We really pose the question each day: what does the client want?», he said. One answer was: «He doesn't want a bank that is taking substantially more risk in exchange for higher growth. Conducting a takeover means taking more risk.»

The risk is a composite of several factors: financial pressure, integration hurdles, the clash of culture, unhappy employees and – not least – time and capacity of the executive board and members of staff that should in principal be awarded to clients.

Bergos Berenberg felt an opposite effect when it split off from its owner. «The reaction by our existing clientele was one of elation,» said Rasking, adding that the risk exposure of the bank was much lower now that no owner was there to conduct capital markets' business or that was enforcing strategic changes upon its foreign units.

The Non-Existent Wave of Consolidation

Rasking may not be alone in making such risk considerations in light of his clients' interests in Swiss banking.

The aversion to risk in relation to takeovers in wealth management is deeply rooted. After all, the much-cited wave of mergers and acquisitions in Swiss private banking never took hold, but remained slightly subdued.

The heads of Swiss private banks do well to listed to those advisers who preach a focus on what clients want and need. If they follow through, growth is almost guaranteed to arrive.