Swiss banks are bracing themselves for changes in the industry as a result of a crackdown on tax evasion
THE TWO BIGGEST Swiss banks could lose as much as $65bn (£40bn) in deposits as part of growing international efforts to curb wealthy individuals’ use of the country’s banks to facilitate tax evasion.
Head of UBS Jürg Zeltner told the Schweizer Bank magazine this week that he expected any resulting changes to the Swiss banking sector would cause UBS’s clients to withdraw between SFr12bn and SFr30bn (£8bn-£19.9bn), predicting that the outflow would continue for “quite a while yet”.
The US is also investigating 11 Swiss banks on suspicion of helping US citizens dodge taxes, and has already indicted Wegelin – the oldest Swiss private bank – for allegedly helping Americans evade $1.2bn in taxes, according to the Financial Times.
Credit Suisse CFO David Mathers added that “cross-border transformation including new tax treaties could result in SFr25bn to SFr35bn outflows over the next few years”.
UBS paid some $780m to the US in 2009 to settle criminal charges, while Credit Suisse has reportedly set aside SFr295m to cover any potential tax settlement.
The UK, Germany and Austria have all struck accords with Switzerland, seeing a one-off reprimand imposed for unpaid tax at a rate of 41%, with a withholding tax levied on the income of the accounts thereafter.