Anglo sells Swiss unit

Anglo Irish Bank is selling its Swiss private banking subsidiary and its affiliated Portuguese branch to Swiss bank St Galler Kantonalbank for a sum understood to be in the region of €150 million.

Anglo did not disclose any of the financial details of the sale, but said its Swiss and Portuguese businesses contributed less than 1 per cent of the pre-tax profits of €1.25 billion it secured in its last financial year.

The businesses, which Anglo has owned since 2001, have assets of €3 billion under management, and the sale is expected to be completed in the first quarter of next year subject to regulatory approval.

Anglo Irish Bank chief executive David Drumm said the bank had sold the profitable businesses, which have a high net worth client base, because it did not have a lending operation in Switzerland or Portugal and wanted to use the cash from the sale to expand its operations elsewhere.

"This sale is consistent with Anglo's focus on its core secured lending businesses in Ireland, the UK and the US, together with its complementary wealth management and treasury businesses," Mr Drumm said.

Anglo's main business in continental Europe is based in Austria, and Goodbody banking analyst Eamonn Hughes said yesterday that it was likely that the Vienna operation would avoid a similar fate to the Swiss one because it accounts for 11 per cent of Anglo's funding.

"The Swiss sale may also mean that the bank is becoming more confident of its ability to generate US commercial deposits after its recent granting of permission to start raising deposits in the US," Mr Hughes added.

Anglo Irish Bank's share price rose 10 cent yesterday to €10.95, a climb of almost 1 per cent in a positive day for financial stocks on the Iseq index.