Italian private banks are exiting Switzerland in increasing numbers and could leave altogether because of a crackdown on tax evasion back home, stiff scrutiny of bank secrecy and poor returns after the financial crisis. In the past 18 months, around eight lenders in the Italian-speaking canton of Ticino have closed or been sold, half of them Italian-owned.
In the most recent departure, Italian insurer Fondiaria-SAI SpA sold its Banca Gesfid private bank to Switzerland's PKB Privatbank AG last month for 134 million Swiss francs ($136.6 million).
"The major Italian banks, I think they sooner or later will go away and close down or just sell themselves to other people," said PKB Vice Chairman Fernando Zari. "The banks that have been passing from one hand to another are all Italians, and this trend should continue, in my opinion. I think it's the thought of practically every bank in Lugano," Ticino's capital, he added
Ticino, just across the border from Italy, has served as an easy place for Italians to stash their money offshore. Its banking association has almost 40 members, with Italian names prominent. The trade group last year put its members' assets at $390 billion.
But the cash-strapped Italian government's crackdown on tax evaders - including police searches of Italians entering Switzerland and roadside cameras recording car license plates at the border - has lessened Switzerland's appeal.
Headed by Economy Minister Giulio Tremonti, authorities have tightened controls after Italy's most successful tax amnesty on money abroad. In the amnesty, concluded in April, led to the declaration of 97 billion euros ($132.5 billion) abroad - much of it in Switzerland - and the return home of 39 billion euros.
"What you have is an incompatibility between Italian regulation and the banks' presence in an offshore" banking centre like Switzerland, said Bruno Chastonay, a Lugano financial analyst and commentator.
The banks also have been hit by a drop in revenues since the financial crisis as wealthy clients prefer to hold on to cash or stay out of markets, he and other observers said. Italians facing a slow recovery from the worst recession since World War Two also have less money on hand to invest, which cuts into commissions and other revenue streams at banks.
Profits at BSI, Ticino's oldest bank, which is owned by Italian insurer Assicurazioni Generali SpA, fell 24 percent in the first half of the year. Assets under management slipped 3.5 percent to 75.4 billion Swiss francs ($76.9 billion).
Italian banks' dwindling presence "has a lot to do with the cost-to-income ratio. It's very simple; it just hasn't made any sense from a strategic point of view" to have small units in Ticino, said Martin Maurer, general director of the Association of Foreign Banks in Switzerland. Italy's biggest bank, UniCredit SpA, sold its Swiss unit in July to its management for 57.5 million Swiss francs. The operation, with 2.2 billion Swiss francs under management, had reported an 18 percent drop in gross profit last year.
Alessandro Profumo, recently replaced as UniCredit chief executive, told reporters last month: "We're really big on onshore activities and small in offshore. We're focusing on the first." Marco Mazzoni, head of the Magstat financial consultancy in Bologna, said Italian banks in Switzerland were being forced to rethink their future.
"I'm convinced that the closings, acquisitions and mergers in the Lugano market will continue over the next two years as well because the future of tax havens has changed," he wrote in e-mailed comments.
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