The portfolio loan book of Smith & Williamson is due to be handed over to Hampden & Co later in 2019.

Smith & Williamson recently stated that it would be relinquishing its banking licence in a strategic more, before a £625m merger with financial planner Tilney.

The Scotsman reported that the loan book is secured against Smith & Williamson’s client investment portfolios.

Graeme Hartop, chief executive of Hampden & Co, said: “When we launched Hampden & Co we identified an opportunity in the market for a private bank that focused exclusively on high quality, service-led banking, and so would be well-positioned to work collaboratively with specialist wealth managers like Smith & Williamson.”

David Codd, co-chief executive of Smith & Williamson, added: “It is crucial that our clients continue to receive the same high level of service that they have been accustomed to. When we examined the market, we recognised the same culture and sense of commitment at Hampden & Co, and its clear focus on banking made the decision a relatively straightforward one.”

Hampden & Co posted a 48% year-on-year income growth in half-year results released in August, with deposits increasing by 39% and lending rising by 44%.