Swiss Bank Considers Selling Cross-Border Business of HyposwissGiles Broom
St. Galler Kantonalbank AG, which is majority-owned by the Swiss canton of St. Gallen, said it may sell part of its Hyposwiss private bank after reviewing its cross-border business.
“St. Galler Kantonalbank is reviewing the future strategy of its cross-border wealth-management business,” the bank said in an e-mailed statement. “This includes the possible sale of individual units of Hyposwiss subsidiaries.”
Switzerland, the world’s largest center for cross-border wealth, is trying to shed its image as a haven for undeclared funds amid a crackdown on tax evasion by the U.S. and European governments. Switzerland is in talks with the U.S. to resolve a Department of Justice probe of at least 11 Swiss financial firms, including Zuercher Kantonalbank, suspected of helping Americans hide money from the Internal Revenue Service.
Neither St. Galler Kantonalbank nor Hyposwiss have been cited by the Justice Department as part of its investigation. Swiss cantonal banks are mainly owned by regional governments and are backed by state guarantees.
Hyposwiss, established in 1889, had 7.2 billion Swiss francs ($7.6 billion) under management at the end of December, down from 9.1 billion francs two years earlier, according to a 2012 report, and has offices in Zurich, Geneva and Lisbon. Hyposwiss, which reported a net outflow of almost 1 billion francs last year, plans to focus growth on its onshore Swiss business and on Russia, according to the report.
Swiss prosecutors opened an investigation in January last year after they were alerted by a law firm that was offered data stolen from Hyposwiss. A former “external” bank employee was arrested, the office of the federal public prosecutor said in February last year. The stolen data related to a dispute between Russian billionaires Oleg Deripaska and Vladimir Potanin, according to a report in Handelszeitung newspaper.