The number of foreign-owned Swiss banks dropped from 145 during the start of 2012 to 129 by the end of May 2013, Bloomberg reported quoting data published by the Association of Foreign Banks in Switzerland.
The data also shows that assets under management (AUM) slid by a quarter to CHF870.7 billion (US$921 billion) in the five years through 2012 as clients withdrew money or paid taxes on undeclared accounts.
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Citing the reasons why these bank exiting the Swiss market, Martin Maurer, secretary general of the Association of Foreign Banks in Switzerland, said some of the smaller ones are very focused on a particular market and are profitable, while others grew before the financial crisis by hiring relationship managers who brought in clients from all over the world.
"Now they don’t really have a good idea about why they should exist," Maurer said. "They’re not focused on any particular markets or countries, don’t have a long tradition, and in those cases shareholders may not be interested in supporting businesses that make losses or very small returns on capital here and be exposed to risks."
Crackdown on secrecy
Switzerland, the world’s biggest offshore financial centre, with US$2 trillion in assets, is under massive pressure from the US and EU as cash-strapped states seek to stop tax evasion and close loopholes.
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By GlobalDataLast December, Switzerland agreed to comply with new US disclosure rules on offshore accounts controlled by Americans, a new enforcement regime known as FATCA, or the Foreign Account Tax Compliance Act.
On 20 May, PBI reported that the Swiss government has agreed to create a legal basis that will enable its banks to settle investigations by US authorities into their role in assisting wealthy Americans in evading taxes, which may require lenders to pay up to billions of dollars in fines to the US authorities.
