AIG offloads private banking arm for $254 million

Beleaguered insurer American International Group Inc (AIG) today said it has agreed to sell its wealth management provider AIG Private Bank to Abu Dhabi-listed investment company Aabar Investments Co for 307 million Swiss francs ($254 million).

When the deal closes, Aabar also will assume certain loans outstanding up to a maximum 100 million Swiss francs. AIG Private Bank will be renamed and operate independently, serving wealthy clients from headquarters in Switzerland plus offices in Hong Kong, Shanghai, Singapore and Dubai, the companies said.

The wealth management company will conduct business under a new name and will continue to focus on providing wealth management services.

"This sends a clear message to our customers that we will continue to be a trustworthy, reliable and competent partner for them," CEO Eduardo Leemann of AIG Private Bank said in a statement.

Khadem Al Qubaisi, chairman of Aabar, will take the same post with the bank. AIG Private Bank Chief Executive Eduardo Leemann and his senior managers will remain with the Zurich-based firm, which was founded in 1965.

Commenting on the deal, Al Qubaisi, said, "We have looked very thoroughly at AIG Private Bank and are impressed by the professionalism and dedication of the management team and staff. This transaction represents a great opportunity to leverage AIG Private Bank's expertise in wealth management and to further develop it in our region. AIG Private Bank provides us with a platform with the potential for significant long-term growth and value creation."

Aabar was incorporated and went public on the Abu Dhabi Securities Exchange early in 2005. The deal is subject to conditions including clearance by regulators, particularly the Swiss Federal Banking Commission, the companies said.