Hampden & Co, the Edinburgh-based private bank, will take on a loan book believed to be worth around £35 million from a London-headquartered wealth manager.
The portfolio loan book of Smith & Williamson, which recently announced a strategic move to relinquish its banking licence ahead of a £625m merger with financial planner Tilney, is due to be transferred to Hampden & Co later this year.
The loan book is secured against Smith & Williamson’s client investment portfolios and is thought to be worth in the region of £35m.
Graeme Hartop, chief executive at Hampden & Co, said: “When we launched Hampden & Co we identified an opportunity in the market for a private bank that focused exclusively on high quality, service-led banking, and so would be well positioned to work collaboratively with specialist wealth managers like Smith & Williamson.”
David Cobb, co-chief executive at Smith & Williamson, said: “It is crucial that our clients continue to receive the same high level of service that they have been accustomed to.
“When we examined the market, we recognised the same culture and sense of commitment at Hampden & Co, and its clear focus on banking made the decision a relatively straightforward one.”
The Edinburgh boutique bank reported 48 per cent year-on-year income growth in half-year results released in August, with deposits growing by 39 per cent and lending rising 44 per cent.
Hartop attributed this to a growing network, adding: “We have been growing strongly year-on-year since launch, and a key component of that growth has stemmed from recommendations from UK professionals in the high net worth space.”
Hampden & Co became the first UK private bank to be established in a quarter of a century when it opened for business in June 2015.