Banking and Professionals of the Financial Sector (PFS): Case Study

Strategy definition and implementation for a major Italian private bank located in Luxembourg

The issue

Following head-office’s decision to transfer major activities of its Luxembourg branch to other entities, the Bank requested PricewaterhouseCoopers’s assistance in order to conduct a feasibility study aiming at assessing the opportunity to develop new activities. The objective was to identify new products and services to those offered by the head-office as well as supportive to the other entities of the group. We also assisted the Board of Directors of the head-office to transform its Luxembourg branch into a Luxembourg subsidiary.

Our approach

• Review the existing organisation (process, people,system, etc.);
• Identify and assess new added value activities / products /services;
• Assess the regulatory, legal, tax and operational impacts of the divestments and the new activities;
• Build the business case based on a set of assumptions;
• Define an action plan;
• Review the formal application file drafted to obtain the Luxembourg banking license and manage the relationship with the Supervisory Authority;
• Deal with the Luxembourg Tax Administration to transfer the benefits of certain tax aspects from the existing branch to the new subsidiary;
• Be in charge of all legal aspects regarding incorporation of the new Luxembourg company and regarding the transfer of contracts and employees (work done through Luxembourg lawyers);
• Issue the legal report of an independent auditor on the contribution in kind of all assets and liabilities of the existing branch to the new subsidiary.

The outcome

• Regulatory, tax, legal and operational impacts analysis;
• Business case and action plan;
• Offer a comprehensive multi-disciplinary management of the project;
• Banking licence granted by the Luxembourg Ministry of Finance.