Developing economy banks move to Switzerland

Banks from Asia, the Middle East and Latin America are slowly starting to plug the hole left by their European counterparts that have departed from Switzerland.

“Some banks may sell their Swiss private banking operations when they can achieve better prices so that they concentrate on core activities, such as investment banking.”

Private banking more expensive
While some crisis-hit foreign banks might be forced to erase their Swiss footprint to shore themselves up, others may be casting a worried eye over increased regulations for private banking activities.

The political storm surrounding banking secrecy and tax evasion has already led to a tightening of international compliance procedures, with more perhaps about to follow.

“Private banking has got more demanding under the new tax compliancy code,” said Maurer. “It has become more expensive and margins are lower, not just in Switzerland.”

But larger banks from developing countries have already displayed an appetite to reverse the trend. If it is successful in obtaining a Swiss license, Bank Itau would follow in the footsteps of Banque Louis from South Africa, the Bank of China and Abu Dhabi’s Falcon Private Bank.

European and United States clients may be withdrawing wealth from Switzerland in the light of increasing vigilance on tax evasion, but money is still flowing in from the likes of Asia and the Middle East.