Switzerland remains largest offshore financial centre

A huge global pressure to break secrecy veils of Swiss banks notwithstanding, Switzerland remains the world's largest offshore financial centre with client assets totalling over $2 trillion, a new study said on Thursday.

Besides the country is expected to remain 'the biggest offshore centre for private banking in 2018,' with emerging countries to continue to make largest contribution to growth in private banking segment.

Switzerland remains the 'biggest private banking financial centres for cross border wealth management' with assets worth over CHF 2.11 trillion ($2.2 trillion), as per the study conducted by the Swiss Bankers Association and the Boston Consulting Group.

The Alpine nation is ahead of many other jurisdictions, including Carribean and Panama' which has cross border invested assets to the tune of 1.07 trillion Swiss francs.

These figures are for the year 2013.

On the third place is Channel Islands and Dublin with assets worth CHF 1.05 trillion followed by Great Britain (CHF 920 billion), Singapore (CHF 880 billion), USA (CHF 650 billion), Luxembourg (CHF 520 billion) and Hong Kong (CHF 420 billion).

In recent times, Switzerland, long perceived as a haven for stashing unaccounted wealth, has been facing international pressure, especially with regard to its banking secrecy practices.

India is also looking to get details about its citizens suspected of having illicit wealth parked in Swiss banks.

Last year, the Swiss banking sector saw its gross revenues rise to CHF 54.4 billion.

As per the study, growth opportunities exist for the Swiss banking centre in specific segments such as with global UHNWIs and HNWI clients, as well as with customers from emerging countries.

HNWI (High Net Worth Individual) are those customers having assets between 1 and 20 million Swiss francs, while UHNWIs are those with assets of more than $20 million.

For this study, the regions designated as emerging countries are Eastern Europe, Asia Pacific, Latin America, West Asia and Africa.

According to the study, private banking would remain the largest business area, accounting for 50 per cent of total revenues, followed by the retail and corporate client businesses and asset management.

The large share of revenues forecast for private banking can be explained by Switzerland's long tradition in the business and its role as the most important global centre for the cross border wealth management business, it noted.

"It is in this business area in particular, however, that Switzerland stands in direct competition with other financial centres.

"In terms of cross border assets under management, the Swiss financial centre is expected to experience less growth than other comparable private banking centres," the study said.

The study said that private banking remains by far the most important pillar in the Swiss banking sector, accounting for about 50 per cent of revenues in 2013.

"Significant additional opportunities exist in all of the business areas, with the highest absolute potential in private banking (CHF 2 billion in 2018) and the highest relative potential in asset management (CHF 0.4 billion in 2018)," it added.

Image: A worker climbs on a ladder under the logo of Swiss bank UBS at the company's headquarters in Zurich. Photograph: Arnd Wiegmann/Reuters