South Africa’s overall economic prospects might not look great, but there are plenty of rich people around who might need a Swiss banker’s help in moving money abroad.
Julius Baer, a multinational Swiss bank specialising in managing the assets of “high-net-worth individuals”, has set up shop in Johannesburg - its second office on the continent after Cairo.
This is a step towards expanding into the rest of the continent, said Raoul Korn, Julius Baer’s head for southern Africa. The target market is “successful entrepreneurs looking to invest overseas”, he told City Press this week.
“Depending on which source you use, South Africa has about 40 000 high-net-worth individuals, defined as having more than R10 million in assets,” he said.
Korn said that “unlike other” private banks, there is no minimum wealth or income necessary to be a Julius Baer client.
The new South African office is situated in Sandton and has six employees recruited from South Africa’s major banks who have “expanded networks”, said Korn.
The bank already has South African clients, he admitted. “We do not talk about numbers, but there is a certain critical mass you require.”
Despite all evidence to the contrary, Korn said South Africa’s economy had a “very positive outlook”.
“There is great potential for growth and wealth creation,” he added.
The Swiss bank is not looking for a banking licence in South Africa, which Korn said had a “very well-developed banking environment”.
The opening of an advisory office follows the closure of the local representative office of a larger Swiss bank, Credit Suisse, late last year.
Julius Baer’s balance sheet is full of so-called Lombard loans, which is when the bank’s rich clientele use assets like share portfolios as security for loans. It does not lend to companies, only individuals.
Julius Baer is one of a handful of Swiss banks that have paid colossal fines in the US in recent years for their role in helping rich Americans evade taxes.
The bank settled for $547 million (R7.8 trillion) in 2016 and two of its bankers admitted to elaborate schemes to get Americans’ money hidden away, safe from taxation.
These included using code names for clients to create anonymous accounts and instructing employees travelling to the US to carry a tennis raquet to make it seem as if they were on holiday.