Since 2009 the veil of Swiss banking secrecy was first lifted when UBS agreed to pay $780m in fines and pass on a number of information about tax-evading US citizens. With the Swiss banking secrecy under threat clients have withdrawn c.a. $381bn since 2008 according to an estimates from the accounting firm PricewaterhouseCoopers. Those outflows paired with the low-risk preferences from the clients have impacted the banks’ profits. Hence, according to a study by the firm KPMG, the number of loss-making banks rose to 34 out of 94 banks considered, a 50% increase from the previous year.
This situation created the need for private banks to reinvent themselves. Interviewed by Reuters Anthony Cerquone, the global head of human resources at UBS’s wealth management arm said “We’re moving from what we would call an asset-gathering business to an advice and investment management business”.
The private banks have also repositioned themselves with new structures. This is the case for example for Geneva-based Lombard Odier and Pictet & Cie who changed their structure to limited partnerships. This change prompted them to published financial results for the first time. It also ring-fences their partners’ exposure to potential fines from US litigations.
“The industry is still digesting the legacy situation,” adds Vontobel’s Staub.