Watch Those Discreet Swiss Banks

Swiss-based global giant UBS may pursue the merely affluent through its U.S. brokerage operation, but smaller Swiss banks remain focussed on the really rich, The New York Times reports. And not just the European rich:

Switzerland is known for its banks, some of them now global giants . . . . But it is the smaller, more discreet banks that are changing the most these days.

[Pictet et. Cie.] once limited its investments to stocks and bonds — heavy on the bonds — but now has $10 billion of its clients’ assets in private equity and $15 billion in hedge funds.

From Geneva, a centuries-old fortress that has long protected the financial assets of the world’s wealthy, Pictet and other private banks have transformed this secretive Alpine cloister of “little” neighborhood banks into a more aggressive haven for the global elite.

For generations, Europe’s wealthy journeyed through mountains and valleys to quietly stash their money with Switzerland’s bankers, famed for taking their secrets to the grave. Now the Swiss can be found throughout the world, selling more sophisticated investment vehicles to attract high-net-worth individuals, mostly multimillionaires.

Competition isn't a one-way street:

As Swiss bankers penetrate markets abroad they are facing like-minded competitors from elsewhere in the world. Dubai and Singapore have cultivated sophisticated private banking hubs, offering discreet financial services and a tax haven aimed at luring away wealthy clients. And just as the Swiss have moved overseas, foreign banks like Citibank have flocked to Switzerland. Geneva, once a sleepy lakeshore town, now has branches of 100 foreign banks.

Speaking of Citibank, when the news broke that Citigroup was planning to shed thousands of jobs, Citi CEO Charles O. Prince was in India, talking to thousands of his employees:

Citigroup, like other global banks, has been expanding its outsourcing in India beyond consumer services like bill payment, to include highly skilled areas like research, investment banking and credit analysis of non-Indian companies and deals.

Citigroup has over 600 such employees in India, and it is growing that number gradually.

All told, Citi has around 32,000 employees in India. It's not known how many additional hires will be made as a result of downsizing Citi's U.S. work force.

Citi may find it easier to hire private bankers in India than in Switzerland. judging from the first Times article linked above:

In Geneva, bankers paid to create an institute at a university to train private bankers. The long-term goal foresees the banks helping finance as many as 50 chairs in finance at Swiss universities. Already, recruitment drives have taken them to the United States.

Just another indication that those hoping to make big money should go to work serving those who already have it.