St Galler KB sells part of Hyposwiss, to integrate rest

St Galler Kantonalbank AG

27/06/2013 06:36

* St Galler KB to focus on Swiss and German markets * Sells Geneva subsidiary, Latam and eastern European business * Swiss private banks hit by clampdown on tax evasion ZURICH, June 27 (Reuters) - St Galler Kantonalbank  SGKN.S , a Swiss regional bank, is selling parts of Hyposwiss Private Bank and integrating the rest, saying it wants to strengthen its core business and reduce business risks. "SGKB reacts with these strategic adjustments to the changing conditions in the wealth management business and sets the basis for sustained growth in its core markets," it said in a statement. "This focusing reduces business risks." "Dampened growth prospects, lower margins and rising costs due to increased regulations require a higher volume in the different offshore markets to make a profitable business," it said. A global clampdown on tax evasion has hit the Swiss private banking industry hard in recent years with many smaller players dependent on offshore banking struggling to survive. Shares in St Galler KB and Basler Kantonalbank  BSKP.S  have fallen sharply in recent weeks after the Swiss government said U.S. prosecutors could indict another Swiss bank for helping wealthy Americans evade tax.  ID:nL5N0EX28N  Switzerland's oldest private bank, Wegelin & Co, broke itself up last year after a U.S. indictment. A spokesman for St Galler KB said they were no link between U.S. investigations and the Hyposwiss move, adding it was a strategic decision in the planning for months. He added the bank had decided to withdraw from the United States in 2011. St Galler KB said it was selling the Hyposwiss Geneva subsidiary to Mirelis InvestTrust, the Latin America business to Banque Privee Espirito Santo, and the eastern European part to Falcon Private Bank in Zurich. Majority owned by the Swiss canton of St Gallen, the bank said it was not disclosing the purchase price. The rest of Hyposwiss will be integrated into St Galler KB in Zurich. (Reporting by Emma Thomasson) ((+41 58 306 7311)(Reuters Messaging: emma.thomasson.thomsonreuters.com@reuters.net)) Keywords: HYPOSWISS SALE/