Rich people eschew Switzerland for Asia

“It's a favorable trend,” Guzman said in an interview on Jan. 27. He takes the helm at the Singapore-based bank's unit Friday after having been ING's Asia private banking head since 2000. “Having a Singapore bank with no ties to Switzerland is an attractive proposition for a lot of them.”

Guzman, 59, is trying to capitalize on wealthy clients seeking to shift funds from UBS AG and other Swiss banks amid a dispute with the U.S. on disclosing client data to tax authorities. OCBC's US$1.46 billion purchase of ING's unit, which tripled its private banking assets, also reflects optimism that Asia's riches will grow faster as its economies outperform.

UBS Chief Executive Officer Oswald Gruebel said this month in a note to staff that it's “imperative” Switzerland's biggest bank halt withdrawals. Net redemptions by wealthy clients at UBS accelerated in the third quarter, bringing the total to 182.9 billion francs (US$179 billion) over 18 months and undermining profit at the bank's biggest division.

The Swiss government is seeking to avoid the re-opening of a lawsuit against UBS as the U.S. seeks information on as many as 52,000 bank clients suspected of tax evasion. A local court ruled last week that an August settlement, in which Switzerland agreed to process data on 4,450 client accounts, isn't fully enforceable.

Funds managed for such clients had accounted for about five percent of ING's Asian private banking assets, he said.

In total, funds attracted from Europe were at most 6 percent to 7 percent of the US$700 billion of private wealth managed in Singapore and Hong Kong at the end of last year, said Roman Scott, managing director of Calamander Capital, which advises private banks.

That share will likely shrink as wealthy Asians pour more money into private-bank accounts, he said.

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