Leading finance company Kleinwort Benson is pulling out of the Isle of Man and 12 jobs are affected by the shock move.
The international firm is pulling the plug on the provision of banking and wealth management services from the island.
The company says that while the island business remains profitable, it lacks ‘critical mass’ and an ‘orderly wind down’ of the business is being put in place.
It says it will work with clients to ‘ensure a smooth transition’ of their business with a new service provider by the end of this year.
Kleinwort Benson’s offices are in St George’s Court, Upper Church Street, Douglas.
They are housed in the same building as the government’s Department of Economic Development and the news is sure to send shockwaves through the business community.
Rumours had been flying that a prominent finance business was planning to quit.
Now Kleinwort Benson has confirmed to the Isle of Man Examiner’s Business News section that it is leaving.
The company told the Examiner : ‘Following a strategic review of Kleinwort Benson’s Private Wealth Management (PWM) Business, we have decided to discontinue the provision of banking and wealth management services from the Isle of Man.
‘Our business in the Isle of Man, whilst profitable, lacks critical mass and we felt that in the long term we would not be able to continue to provide the high quality of service our clients expect.
‘We shall therefore effect an orderly wind down of the business and will work with our clients to ensure a smooth transition of their business to a new service provider over the coming months.’
Kleinwort Benson adds: ‘Our staff consultation period is almost complete.
‘There are 12 staff affected by this decision and we will work with all of them as they consider future career paths either with the Kleinwort Benson Group or on the Isle of Man.
‘We hope to be able to transfer clients to a new service provider by the end of 2014.’
Kleinwort Benson’s head office is in St George Street, in Mayfair, London and also has offices in Jersey, Guernsey and South Africa.
Prominent island business figure Mike Hennessy joined Kleinwort Benson as head of the Isle of Man operation in February 2013, although he was not entirely new to Kleinwort Benson as he was also the non-executive chairman of the bank in the island.
He was previously chief executive of the island’s chamber of commerce for three years and during this time won the Business Person of the Year title in Isle of Man Newspapers’ Awards for Excellence.
After announcing he was leaving the chamber for Kleinwort Benson he told Business News at the time that the private bank and provider of financial services had decided to grow its operation in the island and ‘as a result of that they have approached me to consider heading the Isle of Man operation’.
The decision to leave the island is yet another setback for the island’s banking sector which has suffered a series of hammer blows in recent months.