Swiss banks’ foreign client assets at 4-year low

Amid a growing global scrutiny of overseas funds deposited in Swiss banks, the quantum of total foreign assets managed by them has dipped by nearly 300 billion Swiss francs [about Rs 20 trillion] since 2008.

Also, the share of foreign client assets in Swiss banks dropped to 51 per cent of their total asset under management at the end of 2011 – the lowest in four years.

The foreign clients have traditionally been the mainstay of Swiss banks' wealth management business. But growing pressure from foreign governments for action against possible hoarding of illicit wealth in Switzerland has been acting as a dampener in the recent years.

As per the latest data compiled by Swiss Bankers Association [SBA], the apex body of banks in the country, the total asset under management in Switzerland stood at 5,300 Swiss francs at the end of 2011.

This included 2,700 billion Swiss francs [51 per cent] of foreign clients and the remainder 2,600 billion Swiss francs [49 per cent] of domestic clients.

The foreign clients' share has declined for three straight years in a row – from 52 per cent in 2010, 55 per cent in 2009 and 56 per cent at the end of 2008.

The total assets of foreign clients stood at about 3,000 billion Swiss francs at the end of 2008.

These assets include value of securities held in client portfolios, fiduciary deposits, amounts due to clients in savings and investment accounts, as also from time deposits. The decline in foreign client assets has come at a time when Swiss banks are recording an increased number of complaints from their overseas customers.

Switzerland's banking ombudsman said last week that the number of complaints from foreign customers rose in 2011.
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