ABN AMRO and LGT Group have agreed to the sale of LGT Bank Deutschland for an undisclosed sum.

Netherlands-based ABN AMRO and Liechtenstein’s LGT Group have agreed to the sale of LGT Bank Deutschland for an undisclosed price.

The private bank Delbrück Bethmann Maffei, which belongs to ABN AMRO, is taking over 100 per cent of the shares in LGT Bank Deutschland, a 100 per cent subsidiary of LGT Group, according to a statement from both parties.

It was unclear at the time of writing whether any jobs will be affected by the transaction once it is complete. LGT declined comment.

An ABN AMRO spokesperson said there are some overlaps between the businesses but it was "too early to say" whether jobs will be cut at the purchased business or in parts of ABN AMRO. Any impact will be "limited", the spokesperson said. 

There had been rumours that the German arm of LGT had been put on the block for sale for some weeks although this publication was unable to obtain further details ahead of today’s announcement.

The Liechtenstein private wealth management house was involved in an aborted attempt earlier this year to buy BHF from Deutsche Bank. Deutsche had acquired BHF Bank via its €1 billion acquisition of its parent Sal Oppenheim wealth management firm in March last year. 

There continues to be expectation in the wealth management sector that there will be more consolidation and M&A activity as banks try to contain margin pressures that have seen cost-income ratios rise to a record of almost 80 per cent (Source: Scorpio Partnership).

The ABN AMRO-LGT deal agreed today is subject to the approval of the supervisory and cartel authorities and is expected to be completed by the end of 2011.

Both companies said they signed a co-operation agreement in the area of products, allowing clients of Delbrück Bethmann Maffei access to the investment competence and opportunities offered by LGT.

"By selling to Delbrück Bethmann Maffei, we have found a good solution for the clients and employees of LGT Bank Deutschland - one that offers long-term sustainable prospects. It is important for our clients that they can continue to use LGT products in future as they have done in the past,” said Prince Max von und zu Liechtenstein, LGT Group chief executive.

LGT Group has seen its fortunes suffer slightly in recent months. As reported in August, it made group profits of SFr82 million (about $100 million) in the six months ended 30 June, 18 per cent lower than in the same period last year. It blamed the decline on a "challenging operating environment", which resulted in less client activity and a fall in operating income of 5 per cent to SFr408 million. More positively, the firm said net inflows amounted to SFr5.7 million and that assets under administration increased to SFr88.1 billion - a SFr2 billion increase from the end of last year.

ABN AMRO said the acquisition will, once completed, strengthen its status as a "top three private bank in the eurozone". 

“The acquisition of LGT Bank Deutschland fits perfectly with our strategy to expand our private banking activities in the Eurozone and Asia. LGT Bank Deutschland has a strong fit with Delbrück Bethmann Maffei, as both banks have similar business models," Jeroen Rijpkema, chief executive of private banking international at ABN AMRO, said in a statement. 

LGT Bank Deutschland offers private banking services to the German market, serving clients with
investible assets exceeding €1 million. Headquartered in Frankfurt, the company has offices in Berlin,
Frankfurt, Hamburg, Cologne, Munich, Stuttgart and Mannheim. Following the acquisition the assets
under management of Delbrück Bethmann Maffei will rise to approximately €20 billion (around $27.3 billion).