* No exodus of clients from Switzerland -Hinduja banking arm CEO
* Says stability, know-how will help Switzerland retain business
* Estimates 30-40 pct of Hinduja's assets undeclared
* Bank targets Russian millionaires with commods interest
By Emma Farge
GENEVA, April 10 (Reuters) - As much as half the assets stowed in Swiss banks, estimated by experts at $2 trillion, may be undeclared money, the Chief Executive of India's Hinduja Group's Geneva-based banking arm told Reuters in an interview.
But Switzerland's strategy of sweeping accounts of undeclared funds as part of its clean-money strategy is not likely to spark an exodus of funds in favor of rival offshore centers, Charles de Boissezon said.
"I am confident that they [clients] will continue to keep their money in Switzerland as opposed to repatriating it because they don't want to change bankers," he said.
"I've heard the comment that it's more difficult to change bankers than your wife or husband."
De Boissezon, an industry veteran and former head of Switzerland's Banque Piguet, cited stability, know-how and portfolio diversification as i m portant reasons why the world's mega-rich are likely to keep stowing money in Switzerland ev e n as banking secrecy is watered down amid international pressure on offshore money havens.
He added that his estimate that up to 50 percent of funds is undeclared may be considered conservative relative to those of his banking peers.
There are no official estimates on how much of Switzerland's finance industry is based on undeclared funds. De Boissezon's comments are noteworthy because they provide a rare inside glimpse into the secretive private banking industry.
De Boissezon said that big international banks like UBS UBSN.VX and Credit Suisse CSGN.VX with an international client base were likely to have a smaller portion of undeclared money than smaller Swiss banks, b ec ause the Swiss giants have poured resources into tapping newer markets in recent years.
"Secrecy and tax considerations were mainly the considerations of European clients. Of course, smaller Swiss banks have potentially a much higher percentage of European clients than larger international banks," he said.
Around 30-40 percent of Hinduja's Swiss-managed funds were probably undeclared, he said, adding that measures are being taken to address this internally now. He did not give details of the measures.
Hinduja Bank, part of an Indian family-owned conglomerate with around $3 billion under management, is a rare example of a private bank that is also active in the multi-billion a year commodity trade finance business.
De Boissezon said a recent decision to double its commodity trade financing team was part of a broader strategy to appeal to a rising class of emerging market entrepreneurs in central Europe and Russia who dabble in commodities trading.[ID:nL6E8F5AX5]
"We are also looking to hire private bankers in central Europe and Russia because clients there are looking for people to help on the [commodity] business side too," he said.
"Clients are looking for more than just a straight-forward private bank."
Traditional commodity trade finance heavyweights such as French bank BNP Paribas (BNPP.PA) have scaled back their activities in the sector due to a shortage of dollar funding and tough new capital requirements.
Like other banks in the sector, de Boissezon said uncertainty over the euro zone debt crisis and global growth meant that Hinduja's clients are still holding an unusually large portion of their investments in cash and similar products.
"A larger than usual portion [of investments] is still conservative," he said.
"People are not jumping onto the risk-on trade very quickly."
(Reporting by Emma Farge; Editing by Katharina Bart and Jon Loades-Carter)
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