Tax compliance fears hit Sarasin bank

The private Sarasin bank says clients withdrew SFr2.4 billion ($2.6 billion) in the second half of 2011.

Its report on its annual figures issued on Thursday warned of further outflows in 2012 “owing to the implementation of its strategy focusing on tax-compliant assets”.

The total amount of new money coming into the bank over the year as a whole was SFr1.5 billion. Its net profit fell by 10.3 per cent in comparison with 2010, to SFr 111.7 million.

Swiss banks have come under pressure from the United States tax authorities who suspect some of them of helping wealthy US clients to evade their tax obligations. Although Sarasin is not one of the banks known to be targeted by the US, the Swiss government has also put forward proposals to ensure that banks accept only assets that have been declared to the relevant tax authorities.

On its website Sarasin described its current position as “a temporary halt on its growth path”, but added that it would stick with its growth strategy.

It listed a number of reasons to explain the outflow. While some clients withdrew money because of tax-compliance requirements, others had done so in anticipation of a national inheritance tax, not yet approved by Swiss voters, but which, if accepted, would be retrospective to January 2012.

The bank says that about 40 per cent of its clients are domiciled in Switzerland, and 37 per cent in the rest of Europe. Clients in the Middle East and Asia now account for 18 per cent, while the proportion from other parts of the world has shrunk to five per cent.