By Emma Thomasson
ZURICH (Reuters) -
Prince Max von und zu Liechtenstein, chief executive of Liechtenstein's
biggest bank LGT, said it was striking how fast opinions on tax evasion
had shifted since 2008, when stolen data revealed hundreds of Germans
had hidden assets in the principality.
But the Prince, who runs
the royal-family-owned bank, is not worried by an international push to
fight tax evasion and expects Swiss and Liechtenstein banks to flourish
if disputes over untaxed assets are settled quickly.
"The data
theft of 2008 was the first example of that change of attitude but at
least it put us ahead of the game. What doesn't kill you makes you
stronger," he said in an interview.
Discussing the outlook for
Liechtenstein banking over a lunch of monkfish and asparagus at a luxury
Zurich hotel, Prince Max was relaxed about the future. "People are
focusing on the threats but there are more chances than threats."
Secrecy
has fostered an usually large banking industry in the tiny principality
wedged between Austria and Switzerland, helping to make the 36,000
inhabitants of a territory slightly smaller than Washington D.C. among
the world's wealthiest. The banking sector contributes about a third of
national output.
But LGT was one of the first major banks to be
caught up in an international clamp down on tax evasion since the
financial crisis. In the lean times since then, governments from the
United States to Germany and France have had to try to boost tax
receipts to fill empty coffers.
LGT, which had expanded
aggressively overseas, suffered a client exodus in 2008 and 2009 after
it featured in a U.S. Senate report on tax evasion.
But the bank
has recovered faster than LLB and VP Bank, the country's second and
third biggest banks, reporting net asset inflows of 10.5 billion Swiss
francs (7.1 billion pounds) in 2012, taking total assets under
management to 102.1 billion.
Prince Max says customers are
attracted by LGT's "Princely Portfolio" that allows them to mirror the
strategy used for the royal family fortune, estimated to be as much as 8
billion francs.
"If you delegate investment decisions to
somebody else you should only do that if that person has his own skin in
the game," he said. "We offer our clients the same sort of deal."
"Having
been through ups and downs in our 900-year history, one of the things
that has helped the family survive is that we're well diversified."
Harvard
graduate Prince Max, 44, worked for JP Morgan for more than a decade in
New York, London and Germany before taking over at LGT in 2006 from his
uncle Prince Philipp. Prince Max is the second son of Prince Hans-Adam,
who handed over daily running of the principality to his oldest son
Prince Alois in 2004.
SUSPICIOUS MAIL
Prince Max said the
failure in December of a Swiss tax deal with Germany - which
Liechtenstein had hoped to mimic - and U.S. investigations into Swiss
banks - including the Swiss arm of rival LLB - could scare clients again
in the short term.
"Big clients have come back but smaller
clients are worried that they might look suspicious if they get mail
from a Swiss or Liechtenstein bank," he said.
That is why he is
supportive of attempts to settle those tax disputes. Liechtenstein's
prime minister told Reuters last month the country was prepared to
discuss an automatic exchange of client data with the European Union
after Austria and Luxembourg pledged to drop bank secrecy.
"If
information exchange comes with the EU it will strengthen our ability to
attract capital again from EU countries - because it provides legal
certainty," he said.
EU finance ministers gave their officials
approval in May to start formal negotiations with Switzerland,
Liechtenstein, San Marino, Andorra and Monaco about surrendering bank
data on an automatic basis, exposing savers to tax claims.
Despite
the upheaval in the private banking business caused by the tax issue,
LGT is not targeting more acquisitions after it bought the Swiss
business of Dresdner Bank in 2009.
"Why should we run the risk
and spend a lot for growth, which we can achieve ourselves in two or
three years if we let our people do their job?" he said.
(Editing by Jane Merriman
No comments:
Post a Comment