* No exodus of clients from Switzerland -Hinduja banking arm
* Says stability, know-how will help Switzerland retain
* Estimates 30-40 pct of Hinduja's assets undeclared
* Bank targets Russian millionaires with commods interest
By Emma Farge
GENEVA, April 10 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
NEW CLASS OF ENTREPRENEURS
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
"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
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
(Reporting by Emma Farge; Editing by Katharina Bart and Jon
((firstname.lastname@example.org)(+41 22 733 38 31))
Keywords: HINDUJA BANK/SECRECY
(C) Reuters 2012. All rights reserved. Republication or redistribution of
Reuters content, including by caching, framing, or similar means, is
expressly prohibited without the prior written consent of Reuters. Reuters
and the Reuters sphere logo are registered trademarks and trademarks of
the Reuters group of companies around the world.