India is probing cases of alleged black money stashed by Indians abroad through these two banks -- HSBC Geneva in Switzerland and LGT Bank.
However, lists of Indian account holders in both places were received by India through indirect channels -- HSBC list came from France and LGT list from Germany. Swiss authorities have been refusing to provide any assistance or share further information in these cases.
Switzerland says that it cannot provide any help to Indian authorities as their requests are based on 'stolen data' as Germany and France got the secret lists of account holders after certain bank employees had stolen the data.
The lists were later shared by Germany and France with India and other nations whose citizens figured on those lists.
The announcement of HSBC-LGT deal comes at a time when there is a renewed debate on Indian government's attempts to trace alleged black money stashed by Indians abroad.
UK-based HSBC Holdings Plc said in statement its wholly-owned subsidiary HSBC Private Bank (Suisse) SA has entered into an agreement to sell a portfolio of its private banking assets in Switzerland (with assets under management of USD 12.5 billion as at December 31, 2013) to LGT Bank (Switzerland) Ltd, a wholly-owned subsidiary of LGT Group Foundation of Liechtenstein.
"The transaction, which is subject to regulatory and other approvals, is expected to complete in the last quarter of 2014 and it represents further progress in the execution of HSBC's strategy," HSBC said, while adding that it remains fully committed to Switzerland as a key international centre for its Global Private Banking business and a priority market.
In a separate statement, LGT said "it has reached an agreement with HSBC Private Bank (Suisse) to acquire a sizable private banking franchise".
The scope of the transaction includes over 10 billion Swiss francs in Assets under Management and around 70 staff.
Upon closing, the acquired business will be integrated into LGT Bank (Switzerland) which had AUM of 21 billion Swiss francs billion (USD 23.5 billion) at the end of 2013.
LGT further said the assets being acquired from HSBC is "a profitable business evenly distributed amongst various teams, each focusing on High Networth and Ultra High Networth clients from a specific geographic region that is key to LGT's growth strategy, notably Central and Eastern Europe, Latin America and Western Europe.
"A smaller part of the portfolio relates to clients advised by Swiss-based external asset managers."