UBS expects Swiss deposit fall

City A.M. Reporter
SWISS banks are set to see European clients withdraw “hundreds of billions of francs” as a result of steps to stop foreigners using secret accounts to evade taxes, a top banker at UBS warned yesterday.

Juerg Zeltner, head of UBS wealth management estimates the country’s biggest bank alone could see outflows of SFr12bn (£8bn) to SFr 30bn out of total European assets under management of over SFr300bn.

“As a consequence of the realignment of the financial centre and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland,” he told the Schweizer Bank magazine.

“In the offshore business with European customers, I assume that we will have to live with significant outflows of wealth for quite a long time yet.”

German financial services consultancy Zeb/Rolfes Schierenbeck Associates estimates Swiss banks could see European clients pull up to SFr200bn by 2016 of the SFr789bn it believes they currently hold in untaxed assets.

Zeltner said he hoped the tax dispute with Germany would be settled and said he still saw a good future for the bank’s business in the country – and elsewhere in Europe – even after Swiss banks lost their tax evasion appeal.

“There are legitimate reasons to have money outside your home, for example due to the high level of training in Switzerland or currency and political stability,” he said. “In particular in the area of very wealthy customers, there is strong demand for diversification of booking centres for assets.”