Continuing its reliance on growth through acquisitions, VP Bank Group is to take over Centrum Bank of Vaduz, Liechtenstein, in a merger. VP Bank plans to take over all Centrum Bank shares in January 2015 and to execute the merger in the ensuing months. The Marxer Foundation for Bank Values, currently the sole shareholder of Centrum Bank, is acquiring an interest in VP Bank at the purchase price and is thus becoming an anchor shareholder. The transaction will increase VP Bank Groups client assets by about CHF 6 billion, to CHF 46 billion, and its new balance sheet total will be approximately CHF 13 billion. There will be no significant reduction in VP Banks capitalisation, which is above average (a tier 1 ratio of 20.7% as of 30 June 2014).
Subject to approval from the supervisory authority, VP Banks first step will be to take over Centrum Bank, of Vaduz, for a purchase price of around CHF 60 million. The final purchase price will be based on the exact amount of Centrum Banks client assets. The takeover will comprise total assets of around CHF 6 billion, increasing VP Bank Groups client and custody assets to around CHF 46 billion.
Integration of Centrum Bank into VP Bank
The second step will be to merge Centrum Bank Vaduz with VP Bank to form a single bank under the name of VP Bank Ltd. The present workforce of Centrum Bank Vaduz (about 90 employees) will be transferred to VP Bank. In the course of 2015, consolidation will take place with regard to human resources, which will be implemented in a socially compatible way. A generous social compensation plan is being drawn up, with equal terms for the affected employees of both Centrum Bank and VP Bank.
With its business model featuring similar core areas of competence, target markets and client structures, VP Bank Group is ideally placed to integrate the extra staff deriving from the takeover successfully, and support them professionally in advising their clients. Centrum Bank clients need do nothing: they remain clients of Centrum Bank until the merger is completed, and will automatically be transferred to VP Bank afterwards. VP Bank will retain the Centrum Bank client advisors as its employees, so that Centrum Bank clients continue to be served by the personal advisors they know and trust. At the same time, the clients will benefit from the strengths of VP Bank Group, with its international orientation.
Capital increase planned
The Marxer Foundation for Bank Values, at present Centrum Banks sole shareholder, will acquire an interest in VP Bank worth CHF 60 million. In total, around 755,000 bearer shares will be allocated, at a nominal value of CHF 10.00 each. The issue price of these bearer shares is CHF 79.37 each, in line with the volume-weighted average price of VP Bank bearer shares on the SIX Swiss Exchange in the 60 trading days prior to the signing of this transaction. For this purpose, the Board of Directors of VP Bank plans to hold an extraordinary general meeting during the first quarter of 2015, to resolve on a capital increase, to which existing shareholders will not be eligible to subscribe. VP Bank will use its own holding of around 60,000 bearer shares to finance this increase. VP Banks Board of Directors will also bring forward a motion at the ordinary annual general meeting on 24 April 2015 to pave the way for a buyback of up to 10% of the share capital.
After the implementation of the capital increase, the Marxer Foundation for Bank Values will hold at least 11% of VP Banks capital and 6% of the voting rights. It is planned to nominate Dr Florian Marxer for election to the Board of Directors of VP Bank at VP Banks annual general meeting on 24 April 2015. Dr Olivier Jaquet, Chief Executive Officer of Centrum Bank Vaduz, is leaving Centrum Bank of his own volition as of today. The Board of Directors at Centrum Bank would like to thank him for his great commitment and outstanding achievements during his time in office. Pending VP Banks takeover of the Centrum Bank shares in January 2015, the Executive Board of Centrum Bank Vaduz will consist of Giovanni Leonardo, Chief Investment Officer, and Jürg Mühlethaler, Chief Operating Officer. From takeover of the shares until completion of the merger, it is planned that members of the Executive Board of VP Bank will occupy a majority of the seats on Centrum Banks Board of Directors. During that period, executives from VP Bank will also reinforce the management team of Centrum Bank.
Another Liechtenstein family as anchor shareholder
Fredy Vogt, Chairman of the Board of Directors of VP Bank Group, comments as follows on this step: After last years successful integration of employees and clients of HSBC Trinkaus & Burkhardt in Luxembourg, were delighted to be taking this step in our home market. Our merger with Centrum Bank Vaduz will give VP Bank a much stronger position in the banking centre of Liechtenstein. Furthermore, another reliable Liechtenstein family, with a long-term outlook, becomes an anchor shareholder of VP Bank. Thus the merger is wholly in line with our strategy. Both banks work in the same target markets and client segments. This means we can tap worthwhile synergies, especially in the field of processing. Today we warmly welcome the clients and employees of Centrum Bank Vaduz who are joining us.
Excluded from the transaction are the interests held by Centrum Bank Vaduz in Centrum Beratungs- und Beteiligungen AG (formerly Centrum Bank [Switzerland] Ltd.) and Belvédère Asset Management AG. Nevertheless, Belvédère Asset Management AG and VP Bank are planning to work together closely. Moreover, VP Bank and the companies associated with the Marxer family will conclude a cooperation agreement to continue the long-standing cooperation between Centrum Bank Vaduz and these companies.
Best option for Centrum Bank clients and employees
Dr Florian Marxer, Chairman of the Board of Directors of Centrum Bank Vaduz and member of the Foundation Board of the Marxer Foundation for Bank Values, says: It has been, and remains, our goal to offer the best possible services to our clients with whom we have cultivated relations, sometimes over decades. Our clients are demanding, and rightly so. They require tailored solutions. The offer of multiple registration locations, comprehensive fund solutions and the most modern e-banking services are increasingly the norm for them and for the financial intermediaries with whom we work. For these reasons, and in view of the increasing regulatory flow, Centrum Bank was open to offers of cooperation. We are fortunate to have won our ideal partner in VP Bank, a traditional bank rooted in Liechtenstein. At the same time, VP Banks orientation is international. Its shareholding is very stable and its capitalisation excellent. The merger of Centrum Bank Vaduz with VP Bank is a right step in the process of consoli-dation of the financial services industry. My family are confident that Liechtenstein has a successful future as a financial centre. We are therefore becoming an anchor shareholder of VP Bank, and I am standing for a seat on its Board of Directors. I look forward to close cooperation between our two banks and am convinced, above all, that our banks merger with VP Bank is the best option for our clients and, in the long term, also for our employees. Due to its above-average capitalisation and an A rating from Standard & Poors, VP Bank Group will continue to play an active role in the process of bank consolidation.