Published September 10, 2008

New banking hubs like S'pore on radar screen


TRADITIONAL offshore banking centres face a number of challenges as tighter tax codes and the emergence of new banking hubs like Singapore prompt the wealthy to re-think their banking arrangements.

But Switzerland and other traditional centres are not about to give up their leadership positions, says Boston Consulting Group in its latest wealth report. 'They remain formidable offshore hubs given their experience and talent, as well as the quality of their advice and services.' Still, the centres should take steps to ensure that they stay competitive, said BCG.

BCG has estimated the total offshore assets under management held in private banks centres at US$7.3 trillion. Switzerland's share of this is US$2 trillion or 27 per cent.

The UK, Channel Islands, Isle of Man and Dublin have a combined US$1.7 trillion, or 24 per cent share.

Singapore's offshore AUM is estimated at US$500 billion, and Hong Kong's at US$200 billion.

BCG said some high net worth individuals may consider relocating to foreign offshore centres as 'a roundabout way of complying with domestic tax regulations'. They are more likely to relocate to places with a high quality of life and large business communities such as Switzerland and Singapore, rather than to small offshore centres such as Cayman Islands or Guernsey.

Investors from China, Taiwan and Hong Kong are gravitating towards Singapore, said BCG, rather than traditional European offshore centres.