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ZURICH, Dec 15 (Reuters) - Customer outflows from Swiss private bank BSI are “absolutely manageable” despite the turbulence at Brazilian parent Grupo BTG Pactual, BSI Chief Executive Stefano Coduri told a Swiss newspaper.
He told Finanz und Wirtschaft in an interview released ahead of publication on Wednesday that BSI was operating normally and its liquidity and equity positions were “outstanding”.
He declined to be drawn on sale prospects for the bank but said the situation at BTG Pactual had to stabilise or else an “alternative solution” had to be found for BSI.
He said he could imagine BSI being integrated into a bigger group should it come to a sale as long as they had complementary interests. “I expect a buyer would try to use and expand BSI’s strengths.”
Grupo BTG Pactual’s stock and bonds have are rallied in a sign of confidence that the Brazilian investment bank is making progress towards selling assets and raising cash two weeks after the arrest of founder André Esteves.
BTG Pactual is in talks with international banks over the sale of BSI, which it bought only in September, a source with knowledge of the plan told Reuters this month.
Some clients -- particularly from Latin America -- are leaving BSI or reducing their exposure given the events at BTG Pactual, Coduri was quoted as saying.
“The sums are absolutely manageable. Customers know that BSI works fully independently from BTG,” he said without being more specific. Latin American clients accounted for 10-15 percent of assets under management, he said.
Asked about the impact of a credit rating downgrade from Moody‘s, he said BSI’s rating was the biggest challenge given its importance for counterparties and investors. He noted Moody’s rating for BSI was three notches above its parent‘s.
Should BTG Pactual be downgraded again “then we need to find a solution establishing BSI as an independent entity, as least from Moody’s perspective”, he added.
He said BSI was in close contact with Swiss financial watchdog Finma, but he declined to discuss details of the talks. It was delivering daily reports to Finma, which he said had set new lower limits for some things like liquidity levels.
Pressed on sale prospects, he said: “Our clients have trust, but not forever. The immediate developments in Brazil are highly important. Either BTG Pactual’s situation stabilises or an alternative solution needs to be found for BSI.”
He said BSI would have made a record gross profit this year had the crisis not erupted and said 2015 accounts would show that no funds had flowed back from BSI to its parent.
He said regulators had ring-fenced BSI from the start so that BSI shares are parked in a Swiss holding company under Finma supervision. The bank and holding company had independent boards. (Reporting by Michael Shields. Editing by Jane Merriman)