The Zürcher Kantonalbank (ZKB) is withdrawing from Austria. On Tuesday, it announced that it is selling its subsidiary ZKB Österreich to the Liechtensteinische Landesbank (LLB). The ZKB subsidiary, with 120 employees at the Salzburg and Vienna locations, is active in private banking and manages client assets of 3.1 billion euros.

The LLB is taking over all employees as well as all customer relationships; the products and services of the wealth management and private banking business of ZKB Österreich AG will also be transferred to LLB. This gives the Austrian subsidiary the opportunity «to further develop as part of a larger organization in Austria,» commented the seller.

«LLB Stands For Security and Stability»

In the LLB's press release, Florence Schnydrig Moser, Chairwoman of the Supervisory Board of the ZKB subsidiary, stated: «With LLB, we have found a strong partner for a long-term successful future. As the most traditional bank in Liechtenstein with a Moody's rating of Aa2, LLB stands for security and stability.» The explicit mention of the high credit rating of Aa2 is likely related to ZKB's pride in its even higher Triple-A rating (from both Moody's and Standard & Poor's), which it owes to its guarantor, the Canton of Zurich.

The transaction still needs to be approved by supervisory and competition authorities. ZKB expects the transaction to be completed by the first quarter of 2025 at the latest. LLB plans to first take over the client assets and then merge the ZKB subsidiary with the Liechtensteinische Landesbank (Austria).

Fitting the «Acquisition Pattern»

The LLB subsidiary manages assets of over 32 billion euros and, according to the parent company, is one of the leading wealth management banks in Austria with more than 230 employees. Since 2009, Austria has been one of the three declared home markets of the LLB Group, alongside Liechtenstein and Switzerland.

The fact that the acquisition fits the «acquisition pattern» is also evidenced by the statement from LLB CEO Gabriel Brenna: «After the acquisition of Semper Constantia Privatbank in 2018 and the takeover of private banking clients from Credit Suisse in 2021, we are taking another step towards acquisitive growth in Austria, thus underlining the strategic importance of the Austrian market for the LLB Group.»

From Canton of Zurich to State of Liechtenstein

The LLB subsidiary based in Vienna aims to expand and further develop the Salzburg location through the takeover of ZKB Österreich, which primarily serves wealthy Austrian and German private clients, «so that LLB Österreich will have a strong presence at the two most important wealth management locations in Austria.»

The parties have agreed to keep the price of the transaction confidential. However, LLB disclosed that the price will be paid in cash and that as a result, the core capital ratio (Tier 1 ratio) of the LLB Group will decrease by around 1 percent (which should give an idea of the scale). Nevertheless, it will still significantly exceed the target of over 16 percent. The majority shareholder of LLB is the State of Liechtenstein, and the shares are listed on the SIX Swiss Exchange.

With this, ZKB, which has been active in Austria since 2010, closes its «gateway to Europe of the group strategy.» However, these words are not found in the current press releases but come from an interview that the then-head of the ZKB subsidiary, Lucien Berlinger, gave to finews.ch in 2017.