Swiss banks: Assets of Pakistanis appear to be exaggerated

Published: February 10, 2015
As many as 338 clients of Swiss HSBC were associated with Pakistan, with 34% having a Pakistani passport or nationality. PHOTO: REUTERS

As many as 338 clients of Swiss HSBC were associated with Pakistan, with 34% having a Pakistani passport or nationality. PHOTO: REUTERS

Contrary to public perception, a recent investigation into Swiss accounts at one of the world’s biggest banks suggests the collective wealth stashed away by high net worth Pakistani individuals is nowhere near the purported figure of hundreds of billions of dollars.

In an investigative project dubbed ‘Swiss Leaks,’ the International Consortium of Investigative Journalists (ICIJ) recently accessed almost 60,000 leaked files that provide details of over 100,000 clients of HSBC, which is ranked as the world’s second largest bank by Forbes magazine.

With approximately $859.7 million by 2006-07, Pakistan ranked 48th on the list of countries with the largest dollar amounts in the leaked Swiss files.

As many as 338 clients of Swiss HSBC were associated with Pakistan, with 34% having a Pakistani passport or nationality. The maximum amount of money associated with a client connected to Pakistan was $133.5 million, it said.

Given that a bank as big as HSBC had about $0.8 billion of deposits belonging to Pakistani clients, it is safe to assume that the total assets of rich Pakistanis in Swiss banks should be substantively less than $200 billion – a figure that TV presenters throw around casually as the approximate value of politicians’ ill-gotten gains stashed away in offshore accounts.

Speaking to The Express Tribune, a former governor of the State Bank of Pakistan (SBP) said it is wrong to assume that the money deposited with the Swiss arm of HSBC is necessarily ill-gotten.

“Pakistan’s foreign exchange market is partially open. It is not illegal to keep a foreign account if the amount is formally declared to the local revenue authorities,” he said.

According to taxation expert, Dr Ikramul Haq, the amount of money belonging to Pakistani clients of Swiss operations of HSBC does not reveal the full extent of the issue at hand. He referred to the recent acquisition of Pakistani branch operations of HSBC by Meezan Bank as one of the reasons for the lower-than-expected estimate of Pakistanis’ wealth stashed in the Swiss bank.

Pakistani branch operations of HSBC Bank Middle East merged into Meezan Bank last October, which converted all its customers into Meezan Bank’s clients.

A wholly owned subsidiary of HSBC Holdings, HSBC Pakistan operated with 10 branches and total assets of Rs48 billion at the end of 2013. Its clientele consisted of mostly blue-chip companies and high net worth individuals.

Haq said HSBC targeted high net worth Pakistani individuals using its ‘premier’ banking facilities that allowed easy transfer of money from the local branch to a “corresponding HSBC account” anywhere in the world. Many high net worth Pakistani clients may have abandoned HSBC after its acquisition by the local Islamic bank, Haq noted.

When contacted for its version, Meezan Bank’s external communications team refused to comment on the issue.

Published in The Express Tribune, February 10th,  2015.

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Reader Comments (18)

  • objective observer
    Feb 10, 2015 - 1:35AM

    Swiss to Pakistan: Lets not get carried away here, you wish.Recommend

  • raider
    Feb 10, 2015 - 1:41AM

    one of the benefit of democracy in third world countries like Pakistan is awarding clean chits to the executive and stalwarts and to veil and relocate the looted money from one to other shelf, let see, at the end angels will likely to emerge from this system,Recommend

  • wb
    Feb 10, 2015 - 1:56AM

    So, Pakistan is genuinely poor!!Recommend

  • Feya
    Feb 10, 2015 - 2:13AM

    If I were to say the door closed, what would you imply?
    Whilst someone may have very well walked out of the room, there is also the other possibility, someone may have walked in to the room too.

    There is some extremely negligent extrapolating going on here. Just because the assets of Pakistani’s in the Swiss arm of a renowned bank are minuscule that by no means implies the same will be the case for other banks. Most of which, might I add, have significantly larger operations in Switzerland.
    Just a quick go- through of Wiki will show you that HSBC is nowhere near the top financial services provider in the region in question.

    Kudos on the misleading reporting.Recommend

  • optimist
    Feb 10, 2015 - 2:14AM

    I always knew that. We have a habit of proving ourselves worse than we actually are. It is a very negative thing to do.
    That $200 Billion dollar ‘Swiss Banker’ statement about Pakistan was a facebook ‘Photo news’. Even IK quoted that!!!Recommend

  • Pakistani
    Feb 10, 2015 - 2:30AM

    Pakistanis being ultra rich to stash away over 200 billions dollars in swiss banks….is a joke of century. Indeed there will be billion or two stashed but the Pakistanis nation dreams of being ultra rich (and all money plundered by few / stashed outside PAKISTAN) is just a dream.

    The real waster of Pakistan wealth are Pakistanis themselves. Reason is that Pakistanis love to have/buy stuff that is not bulit in PAKISTAN therefore transferring huge resources out of country than to bring it in country by exporting it.

    The biggest of all is the import of OIL and anything associated with it (CARS, Trucks etc). Second Biggest I believe is Tea (which Pakistan can certainly live without) that Pakistanis will die of headache if not taken 10 times a day.

    The List Goes On.Recommend

  • Nadir
    Feb 10, 2015 - 2:43AM

    Oh dear! So the Swiss banker didnt say that every Pakistani could be a millionaire then :(Recommend

  • Shah
    Feb 10, 2015 - 3:12AM

    Well Sharif’s and Zardaris’, two biggest culprits are investing intensively in UK, KSA and US markets, that may be the primary reason of declining ‘Swiss money’Recommend

  • Stewart J
    Feb 10, 2015 - 6:55AM

    The combined foreign holdings in Swiss Banks was $105 billion according to authorities and Pakistanis claim that $500 billion of their money is out there.
    Pakistanis are such fairy tale writers !!Recommend

  • Baloch
    Feb 10, 2015 - 8:36AM

    The names of the people holding these accounts should be disclosed. If they’re mostly politicians, then it is definitely ill gotten money.Recommend

  • iqbal
    Feb 10, 2015 - 10:07AM

    @Feya: Agreed. well said.Recommend

  • Sense
    Feb 10, 2015 - 10:08AM

    Meezan just took over HSBC Pakistan whereas the swiss data is from 2007Recommend

  • Fakhar
    Feb 10, 2015 - 10:55AM

    @Feya: Spot On. HSBC may be 2nd largest bank in the world but not the 2nd largest “Private” Bank in the world. Recommend

  • Riaz Ahmed
    Feb 10, 2015 - 2:15PM

    The difference between India and Pakistan media:

    Indian Express (second largest Indian Newspaper) explicitly declared the names of their Citizen whether they are resident or not with the amount of wealth stacked up in HSBC Switzerland Account, whereas, not a single newspaper or television channel has named any Pakistani.

    The difference between European and Pakistan media:

    According to Guardian (one of the newspaper involved in the leak) received severe threats for legal suits for defamation, Protection of Privacy Act etc from British top legal firms but it still kept on mining the data and exposed people across the Globe and didn’t care about the consequence whereas Pakistani Media…what to say about that !!! Recommend

  • reader
    Feb 10, 2015 - 3:36PM

    oh so it means that nawaz & zardari are not clients of hsbc swiss bankRecommend

  • OSD
    Feb 10, 2015 - 5:16PM

    Sir Ji the sharif’s and zardari’s might be the biggest thieves to have walked the face of this earth. But they are still not worth hundred’s of billions of dollars. Let’s not dump this on them. Are you a supporter of PTI??Recommend

  • AK
    Feb 10, 2015 - 11:54PM

    Title is misleading, Info provided is from only one bank in Switzerland where Pakistanis have accounts namely HSBC. How many other banks are there where Pakistanis have stashed their funds is yet tho be determined. At least print the names of the pakistanis who have the accounts there. Recommend

  • ishrat salim
    Feb 11, 2015 - 5:56PM

    This figure of $200 billion was quoted by our FM Mr Dar as soon as he took over & IK quoted same…you have so small memory…Recommend

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