UPDATE 2-Sarasin H1 disappoints, to shed untaxed assets

* Net new money 6.4 bln Sfr in H1, net profit 60.1 mln Sfr

* Reuters poll forecast 69.8 mln Sfr net profit

* Shares down 5.2 pct

* Striving to get rid of untaxed client assets by end 2012

* Confident it can win 9.4 bln Sfr net new assets in 2010

(Adds shares, analyst comments)

By Martin de Sa'Pinto

ZURICH, July 29 (Reuters) - Shares in Sarasin (BSAN.S) dropped on Thursday after the Swiss private bank reported first-half net profits below analyst expectations on sharply lower trading income and and shrinking margins.

Sarasin said it would strive to get rid of remaining untaxed client assets by end-2012, amid concerns that foreign clients who have not paid taxes at home could be targeted by their tax authorities as a global crackdown on tax evasion gathers speed.

The bank also pledged to woo 9.4 billion Swiss francs of new money this year despite dwindling economic growth.

Sarasin's bank's first-half net profit came in at 60.1 million Swiss francs ($57 million) including minorities after choppy markets led to a drop in trading income and as costs rose.

Analysts had on average forecast a net profit of 69.8 million francs in a Reuters poll.

"The sharp drop is a result of the bank's own financial investments and from treasury activities (hedging)," said Kepler Research analyst Mathias Bueeler in a research note.

"The gross margin drops from 82 basis points to 69 basis points and is as such nearly as horrible as EFG (International)'s margin decline yesterday," he wrote.

Shares were 5.2 percent lower, trading at 40.30 Swiss francs at 1119 GMT and underperforming a Stoxx 600 European bank index..SX7P which was up 0.5 percent.

STRONG INFLOWS

Sarasin, which was able to attract new client funds in the credit crisis while larger rival UBS (UBSN.VX)(UBS.N) struggled, said its net new money was 6.4 billion Swiss francs ($6 billion) in the first half of 2010, higher than the 4.8 billion francs it attracted a year earlier and beating forecasts.

"The proportion of undeclared assets deposited with the bank is negligible, which gives us significant advantages in the mid-term," Chairman Christoph Ammann said in a statement as the company released first-half results.

"No matter what happens on the regulatory front, we are striving for being rid of any undeclared client assets by the end of 2012."

Parent company Rabobank's [RABN.UL] AAA rating helped Sarasin attract client money during the financial crisis while many nervous investors were fleeing shakier rivals.

But investors were not convinced by the strong net new money flow even though it exceeded expectations for 5.33 billion francs.

"Growth is above the peer group no doubt but unless there is reason for much higher profit expectations, the stock doesn't deserve such a rich valuation," said Kepler's Bueeler.

He said Sarasin was trading at a forward price-to-earnings ratio of 17 against 15 for larger wealth manager Julius Baer (BAER.VX) and 11.4 for Vontobel (VONN.S), and at twice book value against 1.7 for Baer and 1.3 for Vontobel.

The specialised wealth manager's competitors also include EFG International (EFGN.S), which reported a large first half loss hit by impairment charges on Wednesday. Vontobel (VONN.S), due to publish results on Aug. 11.

(additional reporting by Lisa Jucca, Editing by Sitaraman Shankar)