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* Bank open to acquisitions worth up to 500 mln Sfr
* Vontobel could finance a deal from cash reserves
* Vontobel private bank currently has 47 bln Sfr in assets
By Joshua Franklin, Angelika Gruber and Oliver Hirt
ZURICH, April 13 (Reuters) - Swiss bank Vontobel is looking to make acquisitions worth up to 500 million Swiss francs ($499 million) to expand its private banking business, Chief Executive Zeno Staub told Reuters.
"We would like to make more acquisitions in private banking," Staub said in an interview, with a view to increase the amount of private wealth it manages to more than 50 billion francs from 47 billion at the end of 2016.
Private banking is a smaller business than Vontobel's asset management division, but the bank sees benefits from expanding it. "We would also like to buy something to be able to profit from higher volumes," Staub said.
Zurich-based Vontobel, in which the founding Vontobel family still holds a controlling stake, is dwarfed by Swiss banks UBS and Credit Suisse, but any acquisition would help it to catch up to mid-sized rivals like LGT Bank and J. Safra Sarasin.
Vontobel, whose cautious use of its deep cash reserves has in the past prompted questions from investors, could finance an acquisition of up to half a billion francs from its own pocket, Staub said. The bank's core capital (cet1) ratio was 19 percent at the end of 2016.
A rule of thumb in pricing private banking deals is to pay 1-2 percent for the assets being acquired.
Private banks in its home Swiss market are high on the list of potential targets, Staub said.
Switzerland's crowded private banking market is undergoing a gradual wave of consolidation as an international clamp-down on tax evasion has eroded Switzerland's position as a tax haven, pushing some private banks to sell up or close down.
The number of Swiss private banks will fall to fewer than 100 in the next three years from around 130, consultancy KPMG predicted in 2015.
Switzerland's decades-long role as place to shelter money from tax was back in the spotlight last month when the London, Paris and Amsterdam offices of Credit Suisse were raided as part of an international tax evasion investigation.
Vontobel faced its own high-profile tax case when it was fined 4.5 million euros ($4.8 million) over dealings with ex-Bayern Munich soccer club President Uli Hoeness, who was sentenced to 3-1/2 years in prison in Germany for tax evasion in 2014.
The bank is in talks with authorities in the German state of North Rhine-Westphalia to settle a tax investigation there and set aside 13.4 million francs for the case in 2016.
"We would be happy if this topic were dealt with for good in 2017," Staub said, declining to comment further.
($1 = 1.0019 Swiss francs)
($1 = 0.9368 euros)
Editing by Jane Merriman