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Swiss bank UBS says ‘business as usual’ in China

Swiss banking giant UBS said Tuesday it was "business as usual" in China following reports that the company restricted travel there as an employee had to delay her return home after being asked to meet with authorities.

Swiss bank UBS says 'business as usual' in China
The UBS statement did not mention travel restrictions. File photo: AFP

The wealth manager, who focuses on China, delayed her return from Beijing to Singapore last week after she was asked to meet with local officials on an unknown matter, Bloomberg News reported, citing a personal familiar with the issue.

News reports said the incident prompted UBS to ask some bankers not to travel to China, but Bloomberg said Tuesday that the bank had lifted its restrictions.

“UBS would like to confirm that we allow all our staff to travel freely in and out of the country and it is business as usual for us in China,” the Swiss bank said in a statement.

“UBS has had a strong franchise in China for 30 years and remains fully committed to further developing our business on the mainland,” it said.

The statement mentioned neither the travel restrictions nor the situation of the Singaporean banker, who according to Bloomberg is due to meet with officials this week.

US banks Citigroup and JPMorgan Chase have asked wealth managers to reconsider travel to China following the incident, according to Bloomberg.

Chinese foreign ministry spokeswoman Hua Chunying told a press briefing on Monday that she was unaware of the situation and referred questions to UBS.

It is not uncommon for Chinese authorities to prevent foreigners from leaving the country due to investigations or legal matters.

The incident also comes as Chinese authorities have intensified a campaign against corruption within the Communist Party and seek to curb financial risks.

More than a million officials have been punished under the sweeping anti-graft drive launched by President Xi Jinping but critics say it has also served as a way to root out his political enemies.

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MONEY

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch 

Holders of other, temporary or conditional permits are not accepted.

READ MORE: ‘A feeling of belonging’: What it’s like to become Swiss

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

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