BNP Swiss private bank upbeat, sales dip

By Sudip Kar-Gupta

GENEVA (Reuters) - French bank BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) said it had seen record inflows into its Swiss private banking arm, making it very upbeat for the fourth quarter, although revenues had slipped as clients switched into cash.

"What I see coming in October makes me very positive for the fourth quarter," Patrick du Saint, head of BNP private banking in Switzerland, told the Reuters Wealth Management Summit in Geneva.

"We had a huge level of cash collected in the first nine months of 2008."

Du Saint said he now expected an increase of 8-10 percent in assets under management for 2008 for his unit - up from a previous target of 6-7 percent.

He said that his division, part of France's biggest listed bank, had managed to win customers away from rivals, even during the turbulent month of September when markets slumped after the collapse of Wall Street bank Lehman Brothers.

"The month of September has been a very good month for us."

REVENUES SLIP

However, BNP Paribas Switzerland's private banking revenues fell by between 5-10 percent as clients switched into lower margin products and du Saint said he did not expect a turnaround any time soon.

"An increasing part of our revenues are coming from fiduciary deposits, instead of mandates, instead of funds, where the revenues are much higher. Obviously it will destroy a part of your return on assets."

He said BNP could consider more expansion in Switzerland once it had absorbed the parts of European bank Fortis which it bought recently.

"Buying Fortis will not be the end of our ambitions in Switzerland. Definitely we would be interested in growing more," he said.

Du Saint said BNP Paribas' Swiss private bank contributed roughly 4 percent to BNP Paribas' broader asset management services and wealth management division, which houses the group's private banking activities.

In the second quarter of 2008, pre-tax profit at the group's asset management services and wealth management division fell 19 percent to 217 million euros ($296 million).

(Editing by Jason Neely and Jon Loades-Carter)