The final size of the acquisition may be altered depending on the bank's net asset value and assets under management when the deal closes. The Abu Dhabi-based investor has also agreed to assume certain outstanding loans of up to Sfr100 million.
Aabar intends to maintain the bank's focus on private wealth management, with headquarters in Zurich and outposts in Hong Kong, Shanghai, Singapore and Dubai. Executives from both sides of the transaction said they were looking to expand the bank's operations in the Middle East.
Although AIG Private Bank will become a rebranded independent institution, Aabar has confirmed that its senior management team will remain at the bank.
The transaction represents the first sell-off of part of AIG since its latest government capital injection of $40 billion on November 10. Five-year credit default swaps spreads referencing AIG had surged to a high of 3,016.9 basis points on November 7 - they fell sharply after the bailout, and continued to decline to 681.2bp on November 28. The insurer is subject to strict governance by the US Treasury, which insisted on curbs on executive compensation at AIG and the creation of a risk management committee.
The deal still needs to be approved by certain regulatory authorities, including the Swiss Federal Banking Commission.
The week on Risk.net, July 7-13, 2018Receive this by email