Outflows cause Basler KB assets to drop 8%

Basler Kantonalbank (BKB), a government-backed cantonal bank, has reported a fall of 7.9% in assets under management to CHF27.7bn (€23.1bn) for the first half of 2012.

BKB reported first half net outflows of CHF2.7bn. Despite the outflows, the bank reported a growth in net profits of 2.7%, reaching CHF44.1m.

The outflows, BKB said, were mostly due to institutional clients responding to liquidity needs. Of the total, about CHF200m was due to US-domiciled clients withdrawing their assets, BKB said. This follows an OECD-led campaign launched in 2009 and to crack down on tax havens.

In that year, the US forced UBS to hand over the names of 4,450 US-domiciled account holders, as part of a $780m settlement of criminal charges with the US authorities.

The bank said it had not set aside any reserves for the US investigation into Swiss banking secrecy. The investigation concerns 11 Swiss banks, including BKB and Credit Suisse, which the US claims have helped US citizens to avoid tax.

Gross profits were marginally up (0.2%) on the 2011 levels, at CHF129.9m. Revenues were also little changed over last year, at about CHF255.3m.

The BKB Group, which includes the Banca Coop and AAM Privatbank, reported net profits of CHF158.4m, a jump of 37.2%. This was due to extraordinary factors, such as sales of property.

The cantonal banks, one in each of the 24 Swiss cantons, are commercial banks that use cantonal assets to act as guarantee for the assets they hold. Together, they account for about 30% of the banking sector in Switzerland. 

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