Safra Group’s Swiss unit agreed to buy Morgan Stanley (MS:US)’s private banking business in Switzerland, adding to the exodus of foreign banks from the country since it gave ground on its bank secrecy rules.
Bank J. Safra Sarasin AG didn’t disclose the terms of its acquisition. J. Safra Sarasin expects the transaction to be completed in the first half of 2015, the Swiss bank said in an e-mailed statement.
“We are determined to play a leading role in the consolidation of the Swiss private banking market,” Jacob Safra, vice chairman of J. Safra Sarasin Group, said in the statement. “The Morgan Stanley business is an excellent fit with our strategic focus on providing tailor made solutions to ultra-high net worth clients.”
Switzerland now has about 120 foreign-owned banks, Martin Maurer, director of the Association of Foreign Banks in Switzerland, said by telephone today. There were 145 such firms at the start of 2012, according to data from the industry group.
Profitability in Swiss private banking has come under pressure in recent years amid U.S. and European investigations into the use of Swiss banks by foreigners seeking to avoid taxes in their home countries. UBS AG in 2009 avoided prosecution by admitting it fostered tax evasion and delivering data on thousands of American accounts in Switzerland. France and Germany have used data stolen from Swiss banks to search for tax dodgers.
Switzerland is among about 60 countries that support a new treaty on exchanging banking data for tax reasons. Tax evasion is not a criminal offense in Switzerland, unlike in many countries.
Morgan Stanley’s unit is among Swiss banks taking part in the U.S. Department of Justice’s voluntary program to identify undeclared assets, three people familiar with the matter said earlier this week.
There are 106 Swiss banks participating in the program, which requires banks to disclose data on undeclared accounts by Americans and pay penalties in exchange for a non-prosecution agreement.
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