Swiss banks keep asset management levels steady despite attack on secrecy, study finds

Switzerland’s second largest asset manager Credit Suisse Group has reversed last year’s fall in client funds, while EFG International has more than halved last year’s asset decline, in a sign some banks are withstanding the threat of foreign money exiting as secrecy disappears.

Credit Suisse Group AG’s total client assets under management grew 2.4% this year to 30 June, to CHF 1.21trn, helped by a 2.11% rise in the value of assets.

This bank’s asset management volume still pales in comparison to rival UBS AG, which had CHF 2.163trn by mid-year.

Further down a ranking table, produced by US data analysts SNL Financial in August, Bank Coop continued its healthy asset growth of 5.89% last year, by increasing volumes by another 4.17% by June. It was helped by a 4.15% increase in the value of its clients’ assets.

And while EFG International AG continued to suffer a decline in total assets last half, the 2.62% fall was less than half the 8.06% fall of last year.

SNL Financial cited Swiss banks’ ability to attract fresh asset management business from wealthy Asians and South Americans as one reason the sector has kept total funds fairly stable.

Over the course of last year total client assets of the banks SNL Financial analysed stayed at around CHF 1.78trn. This excluded UBS, the only bank of 18 analysed for which SNL did not provide 2010 numbers.

The industry has faced severe threats from the erosion of client secrecy being forced upon it by tax authorities in the US and Europe.

Some foreign agencies are acting directly on the banks themselves to divulge client details, others are buying client data, while yet others have successfully pressured Bern to sign agreements for greater transparency.

Many onlookers expected foreign clients, particularly from the US and Europe to leave en masse.

But wealthy individuals in other regions, plus a healthy domestic market, has bolstered total assets, according to the research of 18 banks by SNL Financial.

Last year, as fears grew, eight banks saw their AuM fall, though no drop exceeded 10% and only two (EFG International AG with an 8.1% decline and Walliser Kantonalbank with -4.2%) were at all sizeable.

Graubuendner Kantonalbank did best, by growing assets 12.9%, followed by HSBC Private Banking Holdings (up 9.7%), Basler Kantonalbank (8.7% higher) and Zuercher Kantonalbank (up 7%).

Eight banks posted falls in the value of their clients’ assets last year, but none was greater than 5%, with EFG International AG (down 5%) and Luzerner Kantonalbank (a 4.7% fall) posting the sharpest results.

HSBC Private Banking Holdings (Suisse) AG did best in the markets, by increasing the value of its clients’ money by 11.76%, followed by Zuercher Kantonalbank (7% higher) and Bank Coop AG (5.9%).

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