Private BankMoving to the Bahamas
UBS, a major private bank in the CaymanIslands, plans shifting a significant part of its operations outof the country, but its Chief Executive Officer, Mr. Walter Eggenschwiler,is saying the move is strategic and not related to a recent hikein fees.
He said the private banking aspect of UBS'operations, with the exception of some Trust functions, will bediscontinued in the Cayman Islands by the end of this year leavingonly investment fund and administration in this country.
The banking operations are being transferredto the Bahamas and it remains uncertain how much effect introductionof new laws governing offshore financial operations combined withthe increased fees have influenced UBS' decision.
Among new regulations brought in by theCayman Islands to make it compliant with OECD demands is a stipulationthat all offshore banks must have a physical presence, an office.An official of the Cayman Islands Monetary Authority recentlytold Cayman Net News that private banks are the ones expectedto react negatively to that law along with the fee increases.
A report on the Internet website, Caypolitics,quoted Mr Eggenschwiler saying the aspects of UBS operations thatremain in this country will do so depending on what laws are applied.
" provided the current legal environmentof the Island would not change to the detriment of this particularaspect of operations, and if changes are made to legislation,that there is adequate communication with the private sector",he was quoted saying in regard to his company's continued presencein this jurisdiction.
"UBS Private Banking has reviewed itsactivities in the Americas and concluded to further streamlineoperational capabilities, namely the number and purpose of locationsin the Caribbean. The bank has decided to establish regional competencecenters. For Private Banking and Trust business, we will concentrateour activities in the Bahamas. For Investment
Fund Administration and other services forInstitutional clients, we will concentrate our activities in theCayman Islands.
"The Private Banking activities inCayman, with the exception of a small Trust operation, will bediscontinued by year-end 2002," he said.
Staff was told of the decision Wednesday,16 January, and apparently only a few of them will be laid offby year-end.
"We will stay on the island as a bankwith a significant presence here, mainly in investment fund andadministration UBS will continue to have a very adequate stafflevel."
He said staff should number about 60 persons.
It is understood that among the number ofstaff to be reduced in Cayman are 20 Caymanians. The, along withthe other 20 on work permits in Cayman have been offered positionsin the Bahamas, where the government is granting concessions toUBS, including ease of acquiring work permits.
Ironically, it was only last June some seven months ago when UBS was considering expansionlocally following a decision to consolidate in Caribbean and LatinAmerican operations.
If the Cayman Islands did not fall out ofthe Swiss banking giant's preference, these islands would haveseen the Bahamas downsized instead and a closure in Panama asthe operations expand in Cayman.