Credit Suisse settles on Iran
Credit Suisse has agreed to pay $563
million for a settlement with authorities over an investigation
into dollar payments to countries sanctioned by the US
The bank performed thousands of wire transfers
executed through US banks to Iran, Sudan, Libya, Burma, Cuba and
the former Liberian regime of Charles Taylor over a 20-year period,
the majority to Iran.
The bank was criticised by the US Treasury
Under Secretary for Terrorism and Financial Intelligence Stuart
Levey for wilfully disguising transactions to sanctioned countries
and even making an acquisition to generate more of the
“Credit Suisse turned a blind eye to
indicators that should have led to these kinds of practices ending
much sooner,” Levey said.
“Credit Suisse learned that another
international bank had ceased to handle Iranian banks’ US dollar
clearing business. Instead of perceiving potential risk, Credit
Suisse saw a business opportunity and sought to take over the
In 2005, Credit Suisse exited the business in
question and undertook an independent investigation, working
closely with both US authorities and its own regulator, the Swiss
financial market supervisory authority, FINMA.
New UK tax may push clients
UK clients will look to offshore
investments to avoid the new 50 percent income tax rate for high
earners, according to industry insiders.
The tax, which comes in to play in April, will
affect those earning over £150,000 ($245,000) and will be levied on
all taxable income.
The 50 percent rate will apply not only to
earned income but to all taxable income, meaning those who earn
below the threshold may still be brought into the £150,000 bracket
via other taxable benefits such as a company car or an employee
“We have already started to see and hear of
intermediaries as well as individuals looking to transfer capital
to institutions, or work with structures here in Guernsey,” said
James Blower, managing director of Clydesdale Bank
“The knowledge that people earning less than
the £150,000 threshold may also be liable for the full 50 percent
tax rate could lead to even further enquiries.”
Martin Smith, head of private banking and
independent financial advice at Clydesdale and Yorkshire Bank,
added: “Our advisers are working with customers to identify steps
they could take as part of a tailored tax strategy, such as the
transfer of assets, the use of trust and tax efficient investment
vehicles and, for some, offshore planning.”
Italian tax amnesty raises
Wealthy Italians have declared €95
billion ($137 billion) worth of illegally-held overseas assets
following a government tax amnesty.
Private banks in the country anticipated
accelerated levels of asset inflows in the final quarter of 2009,
but the latest figures show the amounts Italian clients declared
were higher than expected. It is now believed 98 percent of Italy’s
undeclared overseas money has been brought under domestic tax
Private banks may also benefit further, after
the December 2009 deadline for the amnesty was extended until
Italy’s government clashed with Switzerland
last year when it announced money held in non-EU jurisdictions
would have to be repatriated while assets declared in EU countries
were allowed to stay put. It was also criticised for raiding
Italy-based offices of Swiss banks.
The €95 billion haul breaks the European tax
amnesty record, also held by Italy, of €72 billion from two
amnesties held between 2002 and 2003. It contrasts with a UK
amnesty which is expected to raise about £500 million ($816
million), with 10,000 investor disclosures.
PRODUCTS and SERVICES
HSBC sees increased demand for
There are early signs of an
improvement in commercial real estate after HSBC Private Bank
secured a 90 percent, $203.4 million stake in an office building in
Washington DC on behalf of clients.
The deal was supported by HSBC Alternative
Investments, an area the bank is increasingly focusing on as a key
differentiator for its private banking business.
The fully occupied building has 30,000 square
feet of offices and 15,000 square fee of retail space. The stake
was bought from Brookfield Properties, a Canadian firm which has
retained the remaining 10 percent stake.
The building was bought by forming a syndicate
of HSBC’s private banking clients to invest in the property. The
bank is reportedly looking at forming similar groups of investors
for other projects, including in US cities and London.
Alternative investments, including real
estate, has been central to HSBC’s strategy in private banking. It
is one of the world’s largest investors in hedge funds, with around
$30 billion invested.
De Weck calls for
The Swiss government must provide
more detail on the conditions under which it will share tax
information with other countries, according to the head of the
Geneva Private Bankers Association.
Anne-Marie de Weck, president of the industry
group, said a recent dispute between Switzerland and France, which
involved data stolen from HSBC’s Swiss-based private bank, had
highlighted the issue of tax information sharing.
The French public prosecutor Eric de
Montgolfier said his office had details of 130,000 HSBC Private
Bank account holders, 3,000 of them French, after Hervé Falciani, a
former employee of the bank, handed over information stored on his
French tax authorities have since returned the
information, but have approached the clients, asking them to
explain their tax situation. Details could be passed on to legal
authorities if they do not respond.
“It is essential the rules are clear and
everyone knows exactly what to expect,” said de Weck.
She said the current agreements were too
general, and there is a need for “substantive” and “formal”
conditions for the granting of tax information requests.
SG rebrands to Société
SG Private Banking has adopted the
brand Société Générale Private Banking to strengthen its identity
as part of the wider group and leverage its multi-service banking
model. The change took effect from 1 January.
This will enable Société Générale Private
Banking to offer high net worth individuals a wider range of
products and services available in the group worldwide as part of
its global approach to asset management.
By adopting the brand, the business will be
able to highlight both the visibility and the reputation of its
private banking activities, targeting in particular the ultra high
net worth clientele.
The private bank will use the Société Générale
Private Banking brand worldwide, except in the UK, Gibraltar,
Guernsey and Jersey, where it will operate under Société Générale
Private Banking Hambros; and Bahrain and Canada, where its services
will be offered under the Société Générale Wealth Management