Kleinwort Benson, one of the most venerable private banks in the UK, has changed hands after its German owner was forced to sell the business to appease the European Union.
The Belgian private equity group RHJ International announced yesterday it was to buy Kleinwort Benson, owned by the German retail banking group Commerzbank, in a deal worth £225m.
Robert Taylor, the chief executive of Kleinwort Benson – dubbed by one former senior employee as "Commerzbank's Coutts" – was delighted with the outcome, saying the move "means the franchise will be protected and we can look to grow our core business in the UK and the Channel Islands".
The deal marks a reuniting of the RHJ chief executive, Leonhard Fischer, with the bank he left in 2002.
RHJ plans to keep the historic name, which Mr Taylor said was "very important". He added that clients were turning away from the wealth management arms of larger retail and investment banks, "at a time when many major players have seen their brand eroded and when much greater importance is attached to reputation and integrity".
Robert Benson founded his eponymous bank in 1852, three years before the Kleinwort family firm set up Kleinwort Sons & Co, in London's financial district. The groups merged in 1961 and were taken over by Dresdner Bank just over three decades later.
Commerzbank bought Dresdner last year in a deal worth almost €10bn (£9bn), but as the economic downturn bit, the group was forced to go cap-in-hand to the German government.
The €18.2bn bailout had to be ratified by the European Union, which demanded the company sell off certain assets, including Kleinwort Benson, before the funds would be released.
The former employee said: "Kleinwort Benson is very much a UK bank for UK high net worth individuals. It doesn't really fit with Commerzbank's German mass market strategy."
This marks the last association of the Kleinwort name with Commerzbank or Dresdner. The group's investment banking operation, Dresdner Kleinwort, with large operations in the UK, was broken up and renamed earlier this year.
The group had been linked with a private equity-backed management buyout, but it failed to materialise. Sources close to the deal said the process came down to two final biding options, before RHJ was chosen. The Belgian group, launched by Ripplewood founder Timothy Collins, was in negotiations to buy GM Europe, but looks to have lost out to Canada's Magna International. It will use Kleinwort Benson as the brand for its financial services business.