Barclays Says No Plans for Swiss Exit After Geneva Chief ResignsGiles Broom
Barclays Plc will retain its private bank in Switzerland after its Swiss chief resigned, according to an executive at the bank’s wealth management division.
“We’re here to stay in Switzerland,” Francesco Grosoli, head of wealth management for Europe, said by telephone on Monday. “It’s a good business.”
Barclays plans to announce a new management team for its Swiss private bank at the end of March and has hired a replacement for Simon Gaston, who ran the Swiss unit from Geneva since the middle of 2013, Grosoli said. He declined to identify the person hired.
Gaston told reporters in November 2013 that keeping a private bank in Switzerland is crucial to increasing business from rich individuals and families, even though the unit was unprofitable. The business managed 25.5 billion Swiss francs ($26 billion) of client assets at the time, including funds overseen from Switzerland and booked in accounts outside the country, according to Gaston.
Gaston didn’t immediately respond to two telephone calls and an SMS from Bloomberg News to a mobile number.
While Switzerland is the biggest center for offshore wealth with $2.3 trillion, or about 26 percent of the market, according to Boston Consulting Group, some non-Swiss firms have quit the country as banking secrecy crumbles and the cost of regulation increases. The number of Swiss private banks fell to 139 at the end of 2013 from 182 in 2005. About one-third are unprofitable, KPMG said in a report in August.
Denmark’s Jyske Bank A/S is the latest foreign lender to abandon Swiss operations after losing business there. Jyske plans to close its Swiss bank and combine services for wealthy clients at two locations in Copenhagen and Gibraltar, the bank said on Monday.
Barclays has had offices in Geneva for almost 30 years and is following a different strategy from U.K. rivals that are increasingly reluctant to service millionaires from Switzerland.
Royal Bank of Scotland Group Plc is seeking a buyer for its Zurich-based Coutts International private bank, while London-based Lloyds Banking Group Plc and Standard Chartered Plc exited the Swiss private banking market in the past two years.
HSBC Holdings Plc sold a portion of its Swiss private banking client assets last year and is battling a political storm in the U.K. where parliamentary committees have grilled executives about past practices. Geneva’s public prosecutor opened a money-laundering inquiry into HSBC’s Swiss bank last month.
The International Consortium of Investigative Journalists in February released new details from client data stolen in 2008 showing how HSBC set up Swiss bank accounts for drug cartels, arms dealers and others, and advised its customers on how to evade tax.
Bank of America Corp. and Morgan Stanley of the U.S. also sold their Swiss private banks in the past 2 1/2 years.