Swiss private bank Hottinger faces bankruptcy

The number of Swiss-based private banks has declined from 181 in 2006 to 130 at last count Keystone

The Swiss Financial Market Supervisory Authority (FINMA) has initiated bankruptcy proceedings against the Hottinger & Cie private bank for failing to meet the minimum capital requirement under regulatory law. 

The Zurich-based bank, which was founded in 1786, has branches in Geneva, Basel, Sion and Brig and New York. It is believed to have around 50 employees, 1,500 clients and assets of CHF145 million ($148 million). 

Hottinger has been on FINMA’s radar for some time as sustained losses and unresolved litigation pushed it towards unsustainable debt. Restructuring attempts through a planned recapitalisation and a search for a new buyer failed to materialise. Eventually the risk of debt overload resulting from the costs of the liquidation resulted in FINMA initiating bankruptcy proceedings.

 According to FINMA, privileged deposits (client assets of up to CHF100,000) can be fully refunded from the bank’s available assets. 

With the expected liquidation of Hottinger, the number of family-owned private banks in Switzerland stands at seven, compared with around 60 Swiss private banks during the Second World War.