2006 has so far been a very good year for Swiss bankers according to Geneva-based Lombard Odier Darier Hentsch partner, Jacques Rossier. ...

2006 has so far been a very good year for Swiss bankers according to Geneva-based Lombard Odier Darier Hentsch partner, Jacques Rossier. Although the second quarter was "very bad" this year has seen overall net profit growth across the private banking industry of 20 per cent – considerably above expectations, Mr Rossier told journalists at a meeting hosted in London yesterday by the Basle-based Swiss Bankers Association. "Private banking is a cyclical industry though," warned Mr Rossier. "The cycles depend upon the performance of the equities market. There is a strong correlation between the performance of the MSCI index and private banking results." "At Lombard Odier Darier Hentsch we have somewhat subdued expectations for the year ahead. The problems of the property market in the US may impact upon results across the industry for next year – we’re looking for stability rather than growth for 2007." According to Urs Roth, chief executive officer of the Swiss Bankers Association, assets under management at Swiss banks are now almost at the SFr5,000 billion level – a year on year increase of 13 per cent. "Performance acounts for around 50 per cent of the rise in assets under management," said Mr Rossier. "Of the net new inflows around 40 per cent come from domestic Swiss investment, and of the remaining increase only one third originates in Europe. The inflow of Near and Middle Eastern money is followed by Russian, Latin American and Far Eastern assets," he said. The prospects for Swiss private banking are excellent according to Mr Roth. Although people talk about Singapore rivalling Switzerland as an overshore banking centre, the city state has only 2 per cent of the world’s offshore assets compared to 30 per cent for Switzerland, he pointed out. In fact many Swiss bankers see Singapore as an opportunity rather than a threat. Mr Rossier said: "Swiss banks are seeing their Singapore branches increasingly used by their Japanese clients as a booking centre, but with the asset management side done out of Hong Kong. We have also seen clients transfer from Geneva to Singapore, mainly to diversify, but we’re not loosing them to local players." "The EU Saving Tax Directive has had little impact on clients of Swiss banks – we’ve not lost one client to Singapore because of this," he said. And the possibility of a UK offshore tax amnesty will not give any Swiss private bankers sleepness nights according to members of the Swiss delegation. "We’ve seen several tax amnesties before – take for instance amnesties initiated by the Italian, German and Belgian governments. These were executed with varying degrees of success but still the effect on client retention in each case was neglible," said Mr Roth.