By Oliver Hirt and Brenna Hughes Neghaiwi
ZURICH (Reuters) – Swiss secret banks hold up to $ 213 billion in Russian wealth, the country’s financial industry association estimates, as sanctions against Russia give a rare glimpse into Swiss vaults.
The Swiss Bankers Association (SBA) has estimated that banks hold between 150 and 200 billion Swiss francs ($ 213 billion) of Russian client money in offshore accounts.
This indicates that the scope of Russian wealthy business with banks in Switzerland, the world’s largest offshore center of wealth, is much broader than the on-balance sheet exposures that many of its financial firms have begun to detail.
SBA disclosure is rare for Switzerland, which has blocked many previous requests for transparency, and comes when it took the unusual step of applying EU sanctions to Russian cash following Moscow’s invasion of Ukraine. last month.
There is a growing Swiss public debate about his role, with Mattea Meyer, co-chair of the Social Democrats, calling on Switzerland to crack down on any money belonging to Russians close to President Vladimir Putin and his government.
“Part of it belongs to oligarchs loyal to the Kremlin. The money and their business … help finance the war,” he said, adding that Switzerland “must do everything possible to turn off the money taps.”
The SBA estimate, which belittles initial indications of credit exposure to Russia, clarifies the extent of the task of imposing sanctions, such as freezing cash.
The Swiss economy ministry said it has no significant estimates on frozen Russian assets as it records reports of banks facing a growing list of Swiss sanctions.
Despite its estimate of the Russian tally, the SBA pointed out that this was small compared to the overall assets held in Switzerland, which has been regarded by generations of wealthy people around the world as a safe haven for their money.
“The share of assets held for Russian clients likely represents a share in the low single-digit percentage range of total cross-border assets deposited with Swiss banks,” he said Wednesday in an emailed statement to Reuters, referring to the money held for customers residing abroad.
As Western governments roll out a growing list of sanctions in response to the invasion of Russia, banks see their businesses with Russian clients scrutinized far beyond the loans they have made or the business carried out by Russian branches that could lead to budget losses. .
Analysts said Swiss bank exposures directed to Russian clients seem manageable, based on what has been made public.
The two largest Swiss banks last week detailed “limited” exposures to Russia, with the largest UBS saying direct exposure of $ 634 million has been reduced since the end of the year.
On Tuesday, Credit Suisse Chief Executive Thomas Gottstein said about 4% of the assets managed by the second largest Swiss bank for wealthy clients belong to Russians, worth tens of billions of dollars.
This far exceeds the net credit exposure of 848 million Swiss francs in Credit Suisse’s annual report.
Although the bank has not provided an updated tally, it was managing CHF 827 billion in its wealth management businesses at the end of 2021, so 4% would amount to around CHF 33 billion in assets associated with Russian clients.
UBS and Switzerland’s third-largest listed lender, Julius Baer, have declined to detail the assets they hold for Russian clients, but UBS CEO Ralph Hamers indicated sanctions are keeping the country’s largest bank busy.
“New lists come out every night,” he said, adding that UBS was looking to protect itself not only from current compliance, but also from the risk of future sanctions.
($ 1 = 0.9395 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi and Oliver Hirt; Additional reporting by Michael Shields; Editing by John O’Donnell and Alexander Smith)