AIG Sheds A Private Bank

AIG is shedding assets to help it ride through a bailout from Uncle Sam.

American International Group (nyse: AIG - news - people ) announced Monday that it had sold its wealth management subsidiary to Aabar Investments, a global investment company based in Abu Dhabi. A spokesman for AIG did not wish to reveal the value of the transaction, however Aabar said in a press release on its Web site that it had paid $254.0 million for AIG Private Bank, “subject to a post closing price adjustment based on the net asset value and assets under management of the bank at closing.”

Aabar said it would also assume $83.0 million in debt outstanding as a part of the transaction. AIG did not return phone calls to confirm the sale amount in time for publication.

AIG has kept taxpayers and shareholders, who own 80.0% and 20.0% of the firm, respectively, largely in the dark ever since the insurer received its first $85.0 billion lifeline back in September from the U.S. government. Details about the firm’s troubles and the government’s ad hoc bailout strategy have remained hazy even as taxpayer borrowings ballooned to $152.0 billion in early November.

AIG Private Bank, which currently has $8.3 billion in assets under management, will assume a new name, become an independent financial institution and will be headquartered in Switzerland along with offices in Hong Kong, Shanghai, Singapore and Dubai. It will continue to focus on providing wealth management services to high-net worth individuals in Switzerland, Western and Eastern Europe, Asia and the Middle East.

News of the sale might have boosted investor morale but not this time. New York-based AIG fell 7.5%, or 15 cents, to $1.86. The plan for the insurer to sell off its parts and pay back the the U.S. government and emerge as a profitable enterprise may be losing its credibility. (See "Ackman: Yes, we Have No AIG")