By Brenna Hughes Neghaiwi and Saeed Azhar
ZURICH (Reuters) – Swiss wealth manager Julius Baer has halted any new business with wealthy Russians, two sources familiar with the bank’s operations said, as European lenders try to limit their exposure to the Russian elite. amid the tightening of sanctions.
Wealth managers in Europe have tried to distance themselves from the economic and political fallout of the Russian invasion of Ukraine, and Julius Baer this week began blocking any new business with Russian clients, people said.
Last week, the European Union imposed sanctions that prevent Russian citizens and residents from making new deposits of more than 100,000 euros ($ 109,160) into European bank accounts. However, Russian residents of an EU member state and dual citizenship citizens of a member state were exempted from this ban.
Switzerland on Monday followed the European Union’s lead in imposing sanctions against Russia and on Friday expanded its sanctions to include other financial restrictions already covered by EU moves.
This included blocking deposits of more than 100,000 Swiss francs ($ 108,885) from Russian citizens or individuals and corporations residing in Russia, as well as requiring banks to report existing deposits of Russian customers in excess of 100,000 francs.
However, even before this move, Swiss asset managers tried to limit their exposure to Russian clients after previously finding themselves in the crosshairs of US-imposed sanctions, including against Russia in 2014 and 2018.
“As a global company, we are used to operating in different jurisdictions and are obliged to comply with all applicable regulations. At the same time, we are well accustomed to operating in neutral territory as a Swiss company,” said Julius Baer, based in Zurich. , adding that you have taken appropriate measures if necessary.
Wealth managers say European banks are currently taking an even more cautious approach than that imposed by European sanctions by rejecting any new business with Russian clients, regardless of where they reside or whether sanctions are applied to their money.
“If you go to various custodian banks in Europe, no one wants to touch a Russian contact,” said a London-based wealth manager, who asked not to be named. “They are fine with their existing Russian customer base and the assets they hold. (But) if you go to all the obvious players, they will immediately say no (to hire new Russian customers).”
The uncertainty has prompted a number of Russian customers already banking in Europe to seek new relationships, the person said.
“In the past few weeks, we have received inquiries from a number of Russian families asking if they could work with us,” said the London-based wealth manager, who typically works with clients between $ 30 million and $ 50 million. “And generally we never get inquiries from Russian families. It is not the area where we have operated.”
In Switzerland, the world’s largest center for offshore wealth, major wealth managers are aligned to avoid doing business with new Russian clients, said another person, adding that doing business with existing Russian clients – including the wealthy not on the sanctions list – they could also currently be “challenging”.
Julius Baer, who operates in Zurich and Moscow, in addition to running a Russian desk in Dubai, declined to identify the extent of his exposure to Russian clients.
“Russia is one of Julius Baer’s core markets, along with several other large countries. We have been serving clients from Russia for over two decades. In Moscow we are represented by Julius Baer CIS Ltd, an investment advisory firm licensed by the Bank. central Russia, “the bank said in a statement.
($ 1 = 0.9184 Swiss francs)
(Reported by Brenna Hughes Neghaiwi; Edited by Susan Fenton)
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