UBP set to buy RBS's Coutts International

ZURICH (Reuters) - Swiss private bank Union Bancaire Privee (UBP) is set to buy Royal Bank of Scotland's international private banking arm Coutts International, a source familiar with the deal told Reuters on Thursday. The British bank is expected to announce the deal on Friday, the source said. Britain's Financial Times had earlier reported UBP is expected to pay about $600 million (404 million pounds) to $800 million, citing two people familiar with the situation. The source told Reuters the range reported was accurate but declined to give further details. For Geneva-based UBP, this is its first major deal since it bought Lloyds Banking Group's international private banking arm in May 2013, and is another step in rebuilding its asset base which almost halved through the financial crisis. The private bank took a further hit when it was caught up in the Madoff Ponzi scheme. In 2010, UBP and a related fund incorporated in the Cayman Island agreed a settlement of up to $500 million with the trustee recovering money for victims of the scheme. UBP had 98.7 billion Swiss francs ($102.25 billion) in assets under management at the end of 2014 compared to its peak of 135 billion francs in 2007. Coutts International had 35.6 billion francs in assets under management at the end of 2013. State-owned RBS put its international private banking arm up for sale in August as it seeks to focus its business on loans to British households. The sale had attracted about 10 suitors in the initial round, and could fetch about $1 billion, Reuters previously reported, and one source had said the deal could net RBS as much as $1 billion. RBS will retain the British operations of Coutts, which was founded in the 18th century and best known as banker to Queen Elizabeth. German prosecutors are looking at whether Coutts International helped some clients evade tax. It has also come forward under a scheme brokered by the Swiss and U.S. governments for Swiss banks which have helped wealthy Americans evade taxes. Geneva-based UBP was not immediately available for comment. A spokeswoman for Coutts International declined to comment. RBS also declined to comment. ($1 = 0.9653 Swiss francs) (Reporting By Katharina Bart and Joshua Franklin; Additional reporting by Steve Slater in London, editing by David Evans)