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Swiss bank Vontobel is to target US customers as part of an international expansion plan, as Switzerland’s private wealth managers search for fresh growth markets after the US-led global clampdown on clients who sought to evade tax.
Switzerland’s banks have overhauled their business models during the past decade to ensure customers are tax compliant — but the biggest banks, such as Credit Suisse, and Julius Baer, have largely focused expansion plans on Asia and other fast-growing emerging markets.
In a three-year strategy plan unveiled on Thursday, however, family-controlled Vontobel identified the US as a target market. “We love the US business,” said Georg Schubiger, head of private banking. “You can do very good business in the US, if you follow the rules and regulations.”
Vontobel, which has offices in New York and Dallas, expected net new money growth from US clients of 10 per cent a year over the next three years, compared with its 4 per cent to 6 per cent target for overall net new money.
Over the past decade, Swiss banks have paid more than $5.5bn in penalties and compensation related to claims that they helped US clients sidestep tax collectors. However, Vontobel determined that it had not committed any offences under US tax law, and last December announced that its discussions with the US justice department had concluded without it paying a financial penalty.
The Zurich-based bank, which also includes asset management and financial product businesses, is among the mid-sized operators in Swiss banking. Its US wealth management business remains modest — at present Vontobel manages only about SFr3bn ($3.1bn) of assets of US clients. But in terms of US business booked through Switzerland, it ranked number three after UBS and Pictet, according to Mr Schubiger.
Vontobel said its Swiss offering was attractive to US customers seeking to diversify the jurisdictions where their wealth was invested. Wealthy families in Europe and Asia also had children who wanted to study in the US, Mr Schubiger added. “What do they do when they study there? They fall in love. They start working, and you immediately have a link.”
Switzerland is the world’s largest manager of cross-border assets. Total assets under management rose last year by 1.3 per cent to SFr6.6tn, according to the Swiss Bankers Association in a separate report on Thursday. Since 2007, however, foreign customers’ assets as a share of the total have fallen from 58.1 per cent to 48.2 per cent, largely because customers have repatriated funds to “regularise” their position with tax authorities.
The total net operating income of Swiss banks fell last year by 3.2 per cent to SFr62.5bn — the first fall since 2012, according to the SBA.
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