Adam gets new lease of life after RBS buy: Purchase is good solution after last year's crisis
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Your support makes all the difference.ROYAL Bank of Scotland is buying Adam & Co, the Edinburgh-based private bank for wealthy customers, for pounds 10.5m. The deal follows Adam's disastrous pounds 21m foreign exchange dealing loss last year.
Analysts described the agreement as a good buy for Royal and a sensible way out for Adam providing that last year's problem proved to be a one-off. Adam has a net asset value of pounds 13m and made operating profits before provisions and exceptionals of pounds 1.95m in 1992, up by half over the previous year.
Adam was founded in Edinburgh in 1984 as a private bank for high net worth individuals. It faced a crisis last August when it lost a sum worth twice its capital through irregular dealing by two foreign exchange dealers in its London branch. The dealers have since left. The bank was rescued by Francoise Schlumberger Primat, a director and large shareholder, who injected new capital equivalent to the loss of pounds 21m.
Mrs Schlumberger Primat will remain on Adam's board following the Royal Bank buyout.
Royal Bank had provided Adam with clearing facilities since its launch and also stood by the bank during the crisis. Standard Life was Adam's other main shareholder.
After the discovery of the loss Adam sent in the accountants Price Waterhouse to advise on sorting out the mess, and closed down the London dealing room where the problem occurred. There were some suggestions that Adam might maintain its independence by raising new capital, but a sale to Royal Bank became the favoured solution last autumn.
George Mathewson, chief executive of Royal Bank, said that Adam's foreign exchange problems had been sorted out and that it now presented a 'strong brand name and a super customer base for us'.
'The purchase will enable us to offer Adam's private client fund management services to more people in Scotland. Adam will keep its own board and identity for the time being because that's what the customers want.'
Adam has four offices in Edinburgh, Glasgow, London and Guernsey, with about 4,000 current accounts. There are no plans to open more branches, Mr Mathewson said.
Sir Charles Fraser will remain chairman of Adam while James Laurenson will stand down as managing director to become a non-executive director.
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