Private banks leave Switzerland as secrecy erodes

Exit Sign

For European firms with private-banking aspirations, a presence in Switzerland used to be a must. Now, with bank secrecy eroding and rising compliance costs chipping away at profits, more are saying adieu.

Bloomberg News reports that the number of foreign-owned Swiss banks fell to 129 by the end of May from 145 at the start of 2012, according to data from the Association of Foreign Banks in Switzerland.

Assets under management slid by a quarter to $921bn in the five years through 2012 as clients withdrew money or paid taxes on undeclared accounts, the data show.

A crackdown on bank secrecy and increased regulatory scrutiny may unlock a wave of mergers and acquisitions in the next 12 to 18 months, according to bankers, consultants and analysts interviewed by Bloomberg News. While Switzerland remains the biggest center for global offshore wealth with $2.2 trillion, or about 26% of the market, according to Boston Consulting Group, departures may further chip away at the Alpine Republic’s status.

'There will be a bit of a shakeout among private banks', said Felix Wenger, a Zurich-based director and co-head of the private-banking practice at consulting firm McKinsey & Co. 'Specifically for Switzerland, some foreign players might conclude that an exit is a better option'.

Hit the link below to access the complete Bloomberg article:

Private Banks Leave Switzerland as End of Secrecy Hurts

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