Switzerland’s secretive banks hold up to £162BILLION of Russian wealth, industry estimates

Switzerland’s secretive banks hold up to £162BILLION of Russian wealth in offshore accounts, industry estimates

  • Swiss Bankers Association says up to £162billion of Russian money is being held
  • There are calls for Switzerland to clamp down on any cash belonging to Russians 
  • The SBA estimate dwarfs initial indications of the credit exposure to Russia 

Switzerland’s secretive banks hold up to £162billion of Russian wealth in offshore accounts, the country’s financial industry association estimates.

The Swiss Bankers Association (SBA) estimated that the banks hold between 150 billion and 200 billion Swiss francs (£121-£162billion) of Russian client money.

This indicates that the extent of wealthy Russians’ business with banks in Switzerland, the world’s biggest centre for offshore wealth, is far more extensive than previously known.

Switzerland’s secretive banks hold up to £162billion of Russian wealth in offshore accounts, the country’s financial industry association estimates (file image)

The SBA’s revelation is rare for Switzerland, which has stonewalled many previous transparency requests, and comes as it took the unusual step of applying EU sanctions to Russian cash following Moscow’s invasion of Ukraine last month.

There is growing Swiss public debate about its role, with Mattea Meyer, co-president of the Social Democrats, calling for Switzerland to clamp down on any cash belonging to Russians close to President Vladimir Putin and his government.

‘Part belongs to oligarchs loyal to the Kremlin. The money and their activity … helps finance the war,’ she said, adding that Switzerland ‘must do everything possible to turn off the money taps’.

The SBA estimate, which dwarfs initial indications of the credit exposure to Russia, makes clear the scale of the task of imposing sanctions, such as by freezing the cash.

The Swiss economy ministry said that it had no meaningful estimates on frozen Russian assets as it tallies reports from banks facing a growing Swiss sanctions list. read more

Despite its Russian tally estimate, the SBA stressed that this was small compared to overall assets held in Switzerland, which has been regarded by generations of wealthy individuals from around the world as a safe haven for their money.

Switzerland took the unusual step of applying EU sanctions to Russian cash following Moscow's invasion of Ukraine last month

Switzerland took the unusual step of applying EU sanctions to Russian cash following Moscow’s invasion of Ukraine last month

‘The share of assets held for Russian clients likely accounts for a share in the low single-digit percentage range of the total cross-border assets deposited with Swiss banks,’ it said in an emailed statement to Reuters on Wednesday, referring to money held for clients residing abroad. 

As Western governments unleash a growing list of sanctions in response to Russia’s invasion, banks are seeing their business with Russian clients scrutinised far beyond the loans they have granted or business done out of Russian subsidiaries that could lead to balance sheet losses.

Analysts have said direct Swiss bank exposures to Russian clients look manageable, based on what has been made public.

Switzerland’s two biggest banks last week detailed ‘limited’ exposures to Russia, with the largest UBS saying a £482million direct exposure had been cut since year-end.

Credit Suisse Chief Executive Thomas Gottstein on Tuesday said some four per cent of the assets Switzerland’s second-biggest bank manages for wealthy clients belong to Russians, amounting to tens of billions of dollars. 

That is far greater than the £688million net credit exposure in Credit Suisse’s annual report. 

While the bank has not provided an updated tally, it managed £671billion in its wealth management businesses at end-2021, so four per cent would amount to some £27billion in assets associated with Russian customers.

UBS and Switzerland’s third-largest listed lender, Julius Baer, have declined to detail assets they hold for Russian customers, but UBS CEO Ralph Hamers indicated sanctions were keeping the country’s biggest bank busy.

‘New lists come out every night,’ he said, adding that UBS was looking to shield not only against current compliance but also against the risk of future penalties.