NEW YORK - Banca della Svizzera Italiana has shut down most of its U.S. operations, firing more than half of its staff and shifting most businesses into Swiss Bank Corp.
The changes come in the wake of Swiss Bank's purchase last year of a majority stake in Banca della Svizzera, based in Lugano, Switzerland.
Though some consolidation was expected, the rapidity of the changes in New York were surprising. Banca della Svizzera has moved aggressively in recent years to build lending and private banking franchise in the United States, and just a few months ago was preparing to offer U.S. clients its expertise in global investment management.
"We'll be almost absent from lending," said Guido W. Schuler, senior vice president for the New York office.
Shift Came June 30
In a statement responding to questions, the bank said it curbed all lending from its U.S. branch on June 30, transferring its private lending, real estate, and corporate loan portfolios to Swiss Bank.
Bank officials would not disclose the size of Banca della Svizzera's U.S. portfolio.
The bank's New York-based trade finance unit is being sold to an outside party, a source said.
The bank said in its statement that its New York staff would be reduced from about 70 people to 35. An officer, however, said about 50 out of 80 employees would lose their jobs.
The only units that will remain in New York under the Banca della Svizzera name are a money market and foreign exchange trading operation and a small staff offering advisory services to international clients.
Key Figure Leaves
Prominent among those who have left the company is Louise F. Gunderson, who joined Banca della Svizzera with much fanfare from Chemical Banking Corp. in 1988 to launch a private banking group.
Ms. Gunderson, the most senior female officer of a Swiss bank, had joined with six associates from Chemical's domestic private banking group.
Mr. Schuler said he, too, is considering leaving the bank.
Among those remaining are Harvey Glover, who headed U.S. private banking; Yves Gaden, who ran corporate banking in the U.S.; and John K. Burgess, head of the treasury and trading division in New York.
Banca della Svizzera, Switzerland's sixth-largest bank, with $9 billion of assets, said the restructuring will affect about 450 of 600 employees worldwide.
A Change in Focus
In its statement, the bank said its new strategy is to "scale bank lending activities outside of Switzerland" and focus on "core private banking and asset management business."
About 150 will be laid off, with the rest being relocated within the company, it said.
Banca della Svizzera's franchise in Lugano will remain basically intact, since it gives Swiss Bank a much-desired presence in the Italian-speaking region.
But Swiss Bank said it closed an unidentified number of branches in Switzerland's French- and German-speaking regions. The branches "have been generating an inadequate level of profitability," said Swiss Bank's executive board president Walter G. Frehner at a news conference in March.
Sources said Banca della Svizzera operations in Zurich and Geneva also would be scaled down to offer solely private banking.
All of this splashes cold water on the bank's former strategy, which was to muscle its way into lending and private banking worldwide. "It's very simple," president Giorgio Bhiringhelli said in a 1989 interview. "Either we get bigger or we disappear."
Swiss Bank, according to sources, has wanted to call the shots a Banca della Svizzera since it bought its majority stake in May 1991.