* Says assets bought from HSBC were among cleanest it viewed
* Net profit up 18 pct, assets under management up 20 pct (Adds comment from LGT CEO)
By Katharina Bart
ZURICH, March 23 (Reuters) - Liechtenstein's biggest bankLGT does not expect to suffer any fallout fromassets it bought from HSBC's private bank months beforethat business was embroiled in a scandal over allegedly helpingclients to dodge taxes.
Vaduz-based LGT, owned by the principality's royal family,snapped up 7.1 billion Swiss francs ($7.3 billion) of privatebanking assets last year that HSBC wanted to offload to reducethe size of its wealth management arm.
HSBC has since admitted past failings in compliance andcontrols in its Swiss bank. It also faces investigation by U.S.and French authorities and an inquiry by British lawmakers afterreports it helped customers to conceal millions of dollars ofassets in a period up to 2007.
"In our view, the HSBC portfolio was in comparison to otherswe saw in the market one of the cleanest portfolios in terms ofthe compliance risk," LGT's Chief Executive, Prince Max von undzu Liechtenstein, said at a media briefing.
"Overall our impression is a very positive one. We don'tbelieve that we have just acquired a heap of complianceproblems."
LGT was one of the first major banks to be caught up in aninternational clampdown on tax evasion, suffering a clientexodus in 2008 and 2009 after it featured in a U.S. Senatereport on tax evasion.
Since then the principality, wedged between Switzerland andAustria, has made efforts to dispel its image as a tax haven andreposition itself as a financial centre for clean money, movingahead of fellow microstates such as Andorra, which has beenswept up in a money laundering scandal at one of itsbanks.
"Some, and I count Liechtenstein among them, will have gonefrom A to B in a relatively smooth sensible way, understandingpretty early on in the process what the trends are andpositioning themselves accordingly, and others will strugglemuch harder," said Prince Max von und zu Liechtenstein.
LGT has seen net inflows of assets for the past five years.An expansion into Asia has been profitable, LGT executives saidon Monday, without providing details.
LGT said its net profit rose more than 18 percent last yearto 165 million francs, with assets under management rising by 20percent, helped by a combination of valuation gains, net assetinflows and the HSBC inflows.
($1 = 0.9674 Swiss francs) (Editing by Greg Mahlich and Mark Potter)
HSBC Holdings (HSBA)