Julius Baer stops business with new Russian customers – sources

Julius Baer stops business with new Russian customers - sources

ZURICH, March 4 (Reuters) – Swiss wealth manager Julius Baer (BAER.S) has suspended 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 as part of tougher sanctions. .

Wealth managers in Europe have sought to distance themselves from the economic and political fallout from Russia’s invasion of Ukraine, and Julius Baer this week began blocking any new ventures with Russian clients, the sources said.

Last week, the European Union imposed sanctions preventing 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 citizens of a member state have been exempted from this ban.

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Switzerland followed the European Union’s lead on Monday in imposing sanctions on Russia and expanded its sanctions on Friday to include other financial restrictions already covered by EU measures. Read more

This included blocking deposits over 100,000 Swiss francs ($108,885) from Russian citizens or natural and legal persons residing in Russia, as well as requiring banks to report existing deposits from Russian customers over 100,000 frank.

However, already before this decision, Swiss wealth managers sought to limit their exposure to Russian clients after having already found themselves in the crosshairs of sanctions imposed by the United States, in particular against Russia in 2014 and 2018.

“As a global company, we are used to operating in different jurisdictions and are required to comply with all applicable regulations. At the same time, we are well used to operating in neutral territory as a Swiss company,” Julius said. Baer, ​​based in Zurich. , adding that it has taken the appropriate measures as necessary.

Wealth managers say European banks are currently taking an even more cautious approach than that dictated by EU sanctions by refusing any new business with Russian clients, regardless of where they live or whether any sanctions apply to their money. .

“If you go to different custodian banks in Europe, nobody wants to touch a Russian contact,” said a London-based wealth manager, who requested anonymity. “They’re okay with their existing Russian customer base and the assets they hold. (But) if you go to all the obvious players, they’ll immediately say no (to accepting new Russian customers).”

The uncertainty prompted a number of Russian customers who already bank in Europe to seek new relationships, the person said.

“Over 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 and 50 million. of dollars. “And we usually never got inquiries from Russian families. That’s not the area we operated in.”

In Switzerland, the world’s largest center of offshore wealth, major wealth managers are trying to avoid doing business with new Russian clients, another person said, adding that doing business with existing Russian clients – including wealthy individuals not on the sanctions list – could also currently be “difficult”.

Julius Baer, ​​which operates out of Zurich and Moscow and operates a Russian office in Dubai, declined to state the size of its exposure to Russian clients.

“Russia is one of Julius Baer’s main markets, along with many other major countries. We have been serving Russian clients for more than two decades. In Moscow, we are represented by Julius Baer CIS Ltd, a consulting firm in investment approved by the Central Bank of Russia,” the bank said in a statement.

($1 = 0.9184 Swiss francs)

($1 = 0.9161 euros)

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Reporting by Brenna Hughes Neghaiwi; Editing by Susan Fenton

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