(Bloomberg) Switzerland's role as a place for Russian millionaires to keep their money is coming under increased scrutiny, after Ukrainian President Volodymyr Zelensky criticized the nation in a speech over the weekend.
On Monday, the private bank Julius Baer Group Ltd. said it has lent money to a small number of people who have now been sanctioned, including for “residential properties in prime locations in Western Europe.” UBS Group AG reported that it has outstanding loans to sanctioned individuals of less than US$10 million, while its exposure to Russian assets used as collateral in loans to customers is about US$200 million. At Credit Suisse Group AG, about 4% of the assets managed by its wealth management branch is owned by Russian customers, either domestically or nationals living abroad.
“There should be no doubt about the Swiss banks, where the money of those who have sparked this war is kept,” Ukrainian President Volodymyr Zelensky said Saturday in a speech broadcast live to politicians and protesters in the capital, Bern. “It's a fight against evil. Those people's money must be frozen.”
Zelenski's call came just a day after the Swiss banking lobby estimated that the country's banks could have more than $200 billion in Russian fortunes, a figure that overshadows the official estimate. Switzerland's discretion and lax regulation have long attracted wealthy Russians, but the business of managing the money of the rich is drawing attention as Russia's bloody war against its neighbor has led to global condemnation.
The assets of wealthy Russians with ties to President Vladimir Putin have been frozen around the world, while other wealthy customers of the bank who borrowed against Russian assets have to provide more guarantees after those securities collapsed. Julius Baer said on Monday that he reduced the value of collateral on Russian assets to zero in February.
However, Switzerland is so far confident that banks or other sanctioned Russian asset holders will report them to the Government. It is not yet clear how much money held by Swiss banks has been frozen to date. Swiss authorities have begun to block access by sanctioned Russians to the properties they own in the country, the newspaper NZZ am Sonntag reported.
Zelenski also criticized Nestle SA for continuing to do business in Russia, echoing comments made last week by Prime Minister Denys Shmyhal. He added that some 112 children and adolescents have so far died from Russian attacks.
Original Note:
Russian Cash in Swiss Banks Back in Focus After Zelenskiy Speech
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