Sarasin to shut out non-compliant clients by year-end
ZURICH, July 30 |
ZURICH, July 30 (Reuters) - Swiss private bank Sarasin said on Monday it would shut out clients who don't pay taxes on funds held in Swiss accounts, as it put its medium-term goals under review after a drop in first-half net profit.
The bank said it would stop dealing with clients whose tax compliance could not be verified. Clients from countries like Britain or Germany, where Switzerland has or is negotiating a double taxation agreement are not affected, Sarasin said, providing the agreements do come into force.
"If the agreements do not come into force, these clients will be subject to the tax due diligence process in accordance with Bank Sarasin's strategy for avoiding non tax-compliant assets," Sarasin said in a statement.
Sarasin sold its stake in Neue Zurcher Bank in December in an effort to isolate problem U.S. client assets within tax-probed NZB.
NZB is one of at least 11 Swiss banks targeted in the second wave of a U.S. tax investigation also probing Credit Suisse and Julius Baer.
Switzerland is partly acceding to international pressure to force its secretive banks to do more to ensure foreign clients' money is taxed, in a bid to shake off its image as a tax haven.
Sarasin, bought by Brazilian-Swiss private bank Safra for 1.04 billion Swiss francs ($1.07 billion), last November, said that acquisition would be finalised on Tuesday.
Sarasin's net profit dropped 29 percent from a year earlier on lower average client assets, reduced commission and service fees and weaker client trading.
The bank said it had cut its general and administrative expenses budget in response and would review existing medium-term goals.
After seeing heavy outflows in the second half of 2011 triggered by uncertainty over the bank's sale, Sarasin reported new client money of 472 million francs for the first half, which, along with positive market performance, lifted assets under management to 99.1 billion francs from 96.4 billion at year-end.
The bank said it expected inflows to remain positive, though slower than in previous years. The bank, which said in February it was targeting assets of 150 billion Swiss francs by 2015, did not provide an update on that target.
Last week listed rival Julius Baer said it had attracted money from rivals including Sarasin amid the Safra takeover upheaval. ($1 = 0.9708 Swiss francs) (Reporting by Martin de Sa'Pinto; Editing by Helen Massy-Beresford)
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