The privately held Rothschild Group is to integrate its Bermuda office with its other worldwide private banking operations as its shifts its focus to private banking and wealth management.

Dow Jones Newswires reported yesterday that the group will "effectively" spin off its institutional and retail asset management units as part of the move.

Rothschild's existing London-based private client business will be combined with its private banking and trust operations in the UK, Switzerland, Guernsey, Bermuda and nine other key locations to create a single worldwide private banking business, the group told Dow Jones.

"The opportunities are there to leverage on Rothschild's private banking and wealth management rather more into the UK market, for UK residents and those who look (to) London as a financial centre," said Peter Smith, a non-executive director in the Rothschild Group.

While the last year of slowing economic growth has hit the industry, private wealth has grown at a fast pace in the West and East Asia over the last decade.

Rothschild appointed Mike Bussey, formerly joint chief executive of Schroders Private Banking, as chief executive to lead the initiative.

The company has also recruited senior managers from JP Morgan Fleming in the UK to develop its private banking operations.

Yesterday's announcement will not affect investment banking unit NM Rothschild, the group said.

"In a sense the current name of Rothschild is most immediately attached to investment banking. The private banking and wealth management has not developed at such a fast pace," said Smith.

Recently, NM Rothschild reported a 44 percent dive in profits as a fall in merger and acquisition activity hit fee income. Pretax profits for the year to March 31 dropped to 21.4 million from 38.2 million.

The group is looking to either sell or find a joint partner with a "larger investment management group" for its retail and institutional asset management businesses, Rothschild Asset Management BV, or RAM.

RAM currently manages around 13 billion of retail and institutional funds, principally in London.

"Institutional asset management is not enjoying good markets at the moment," said Smith. The move is also an acknowledgment that Rothschild could not compete on size with other larger fund managers.

"Scale is needed in that business," he added.

Rothschild's institutional & retail asset management businesses in France and the US are unaffected by these arrangements.