Swiss banks again in the crosshairs after Zelensky speech

Switzerland’s role as a place for Russian millionaires to keep their money is coming under increased scrutiny after Ukrainian President Volodymyr Zelensky criticized the nation in a speech over the weekend.

On Monday, private bank Julius Baer Group Ltd. said it has lent money to a small number of people who have now been sanctioned, including for “residential properties in prime locations in Western Europe”.

UBS Group AG reported that it has outstanding loans to sanctioned individuals of less than $10 million, while its exposure to Russian assets used as collateral on loans to clients is about $200 million. At Credit Suisse Group AG, about 4% of the assets managed by its wealth management arm are from Russian clients, either in the country or nationals living abroad.

“There should be no doubt about the Swiss banks, where the money of those who have triggered this war is keptUkraine’s President Volodymyr Zelensky said in a live-streamed speech to politicians and protesters in the capital Bern on Saturday. “It is a fight against evil. Those people’s money should be frozen.”

Zelensky’s call came just a day after the Swiss banking lobby estimated that the country’s banks could hold more than $200 billion in Russian fortunes, a figure that dwarfs the official estimate. Switzerland’s discretion and loose regulation have long appealed to wealthy Russians, but the business of managing the money of the rich is drawing attention as Russia’s bloody war against its neighbor has drawn worldwide condemnation.

The assets of wealthy Russians with ties to President Vladimir Putin have been frozen around the world, while other wealthy clients of the bank who borrowed against Russian assets are having to post more collateral after those securities plunged. Julius Baer said on Monday that he wrote down the value of collateral on Russian assets in February.

However, Switzerland so far relies on banks or other holders of sanctioned Russian assets to report them to the government. It is still unclear how much money held by Swiss banks has been frozen to date. Swiss authorities have begun blocking sanctioned Russians’ access to properties they own in the country, the NZZ am Sonntag newspaper reported.

Zelensky also criticized Nestlé SA for continuing to do business in Russia, echoing comments made last week by Prime Minister Denys Shmyhal. He added that some 112 children and teenagers have been killed so far by Russian attacks.