The Issue
We were approached by a European bank (the "Group")
to review the strategic options available to its Luxembourg
subsidiary (the "Bank"). The latter was
rather small, hardly profitable and non-core to its
parent company in terms of activity.
Our Approach
The Group wanted a review of its existing activities
and a proposal of strategic options together with
the financial impact in respect of its Luxembourg
subsidiary. We were also required to identify the
key operational risks of the Bank.
We started by analysing with local management the
Bank's key performance indicators and its market positioning.
We then benchmarked our findings against market best
practices and peer group to identify areas for improvement.
Following this analysis we defined the strategic options
available to the Bank and its shareholders:
- restructuring to enhance profitability;
- development / external growth to reach critical
mass;
- disposal to a third party.
We analysed the financial and regulatory impacts
each option would have on the Bank. Finally, we provided
the Group with a structured report summarising the
various options available, their pros and cons and
their impacts. This was presented to the Board of
directors.
The Outcome
At the end of the project, the Group decided to
dispose of its Luxembourg subsidiary and appointed
PwC Corporate Finance as financial adviser for the
transaction i.e. to identify potential acquirers and
advise on the disposal process (draft the information
memorandum, provide advice on negotiations, coordinate
with other advisers, organise data rooms, etc).
