Section:GDN 1N PaGe:29 Edition Date:190807 Edition:01 Zone: Sent at 6/8/2019 19:51 cYanmaGentaYellowbl
Wednesday 7 August 2019 The Guardian •
Financial^29
Super-rich clients
of Swiss banks
to be charged for
big cash deposits
Rupert Neate
Wealth correspondent
Swiss banks are to start charging their
super-rich clients to look after their
piles of cash – and the bigger the stash,
the higher the charge.
UBS, the world’s largest wealth
manager, told its ultra- rich clients yes-
terday it would introduce an annual
0.6% charge on cash savings of more
than €500,000 (£460,000). The fee,
to be introduced in November, rises
to 0.75% on savings of more than 2m
Swiss francs (£1.68m).
The minimum fee works out at
€3,000 (£2, 800) a year. Savings of
SFr2m would attract an annual charge
of SFr 15,000.
The 157-year-old bank, which holds
$2.3 tn (£1.9 tn) on behalf of many of
the world’s richest people , said it was
introducing the fee to pass on the
cost of negative interest rates set by
the Swiss National Bank (SNB) and the
European Central Bank (ECB). The SNB
interest rate is –0.75% and economists
polled by Reuters said they expected
the rate to stay in negative territory
until at least 2021.
“Conditions in money and capital
markets remain very challenging,”
UBS said. “Interest rates are lower than
expected, remaining in negative terri-
tory. We assume that this period of low
interest rates will last even longer and
that banks will continue to have to pay
negative interest rates on customer
deposits at central banks.
‘Buy now, pay
later’ company
Klarna receives
huge fi nancial
investment
Kalyeena Makortoff
Banking correspondentKlarna, the Swedish payments com-
pany with a “shop now, pay later”
model, has become the largest pri-
vate fi ntech company in Europe after
a fresh round of investor funding
boosted its value to $5.5bn (£4.5bn).
The blockbuster valuation comes
after the start up raised $460m (£378m)
from investors led by Silicon Valley-
based Dragoneer , alongside others
including BlackRock and Common-
wealth Bank of Australia.
It makes Klarna, which counts therapper Snoop Dogg among its share-
holders, the largest private fi ntech in
Europe and the sixth-largest in the
world .The fi rm has become a notable
disruptor in the payments sector , mar-
keted as an alternative to credit cards
and allowing users to shop now and
pay later – either in a lump sum or in
instalments, without interest on most
items, as long as they pay on time.
It is off ered alongside credit, debit
or PayPal options when shoppers reach
the online checkout at 130,000 retail-
ers including JD Sports, Topshop and
Asos. Since its launch in 2005, Klarna
has gained popularity among cash-
strapped millennials and GenerationZ – those born in the mid 1990s – who
want to shop before payday but either
don’t have, or would like to avoid, a
formal line of credit.
It now boasts 60 million users
worldwide, and with 1m transactions
a day online and in store, Klarna says
it is on track to make $1bn in annual
revenue. The company charges fees
to merchants, and customers who failto pay on time. Klarna, based in Stock-
holm , said it would use the funding to
expand in the US, where it partners
with 3,000 merchants including Toms,
Sonos and Superdry. Its US user base
is growing at an annual rate of 6m a
year. Yesterday it also announced an
exclusive partnership with Common-
wealth Bank of Australia that will help
it break into the Australasian markets.
The company says fl exible pay-
ments are boosting sales for its retail
partners. It says those accepting pay-
ments in four instalments have seen
the size of average orders jump by
68%, while consumers end up shop-
ping more frequently.“Following similar moves by a
number of other banks here in Switzer-
land, we confi rm that we’ve decided
to adjust cash deposit fees for Swiss
francs held in Switzerland. Begin-
ning 1 November, private individuals
holding large CHF [Swiss franc] cash
balances [above 2 million] with UBS
Switzerland will be charged a deposit
fee [0.75%].”
UBS advised its clients earlier this
summer that the SNB might lower its
rate on deposits to –1% in September.
The ECB deposit rate is –0.4%. Last
week the US Federal Reserve cut rates
for the fi rst time in a decade , reducing
its benchmark interest rate by a quar-
ter of a percentage point, to a range
of 2%-2.25%, in the fi rst reduction in
borrowing costs since immediately
after the fi nancial crisis a decade ago.
The Swiss franc hit its highest level
against the pound on Monday as inves-
tors bought the safe-haven currency
following the escalation of trade ten-
sions between the US and China. One
Swiss franc was worth 85p on Mon-
day, falling to 84p yesterday. It also hit
a two-year high against the euro, with
one Swiss franc worth €0.92.
The UBS move follows that of
Credit Suisse, Switzerland’s second -
largest bank, which said last week it
would charge its clients 0.4% on sav-
ings above €1m from September. The
smaller private Swiss banks Julius Baer
and Pictet already charge some rich
clients for large cash deposits.
UBS has been positioning itself
to attract more of the savings of the
global super-rich as they seek the
stability and privacy of Switzerland’s
banks at a time of growing fi nancial
instability across the world.
The world’s 500 wealthiest people
lost 2.1% of their collective net worth
on Monday as US stock markets suf-
fered their biggest one-day drop this
year. The richest person in the world,
Amazon’s boss, Jeff Bezos, swallowed
the biggest paper loss, with his for-
tune falling by $3.4bn, taking it down
to $110bn.▲ Rush Hour by the sculptor George
Segal outside UBS’s old London offi ces
130,000
Number of retailers off ering
Klarna’s option to pay at the
checkout, including TopshopChina’s Tencent set to buy
stake in Universal Music
Mark SweneyThe Chinese tech company Tencent is
in talks to buy a 10% stake in Universal
Music Group (UMG), the label of stars
including Taylor Swift, the Beatles ,
Lady Gaga and Drake, in a deal that
would value the world’s biggest music
label at €30bn (£27.5bn).
Universal’s parent company, Viv-
endi, which is controlled by the French
billionaire Vincent Bolloré , said the
companies ha d started talks about
a deal that would also give Tencent
an option to buy a further 10% of thebusiness in a year’s time, at the same
valuation.
Tencent is one of the most valua-
ble companies in Asia with interests
in a vast array of internet-based busi-
nesses, from WeChat social media
to food delivery, search engines and
retail. It operates China’s biggest
music-streaming service.
Vivendi said it hoped the deal would
“ improve the promotion of UMG’s art-
ists, with whom UMG has created the
greatest catalogue of recordings and
songs ever, as well as identify and pro-
mote new talents in new markets .”
Vivendi has been keen to sell a stake
in UMG since last summer, althoughinvestment banks placed wildly diver-
gent valuations on the business,
ranging from €17bn to €44bn.
Vivendi said it was still looking to
sell another small stake in the com-
pany to another partner.
Separately, Tencent plans to spin
off its music arm, Tencent Music, and
list it as a separate business in the US.
The potential deal comes as the
industry reaps the rewards of the
streaming music revolution after
struggling for years from the decline
of CD sales and digital piracy.
Last year global music revenues
grew at their fastest rate in more than
two decades. Worldwide, recorded
music revenues surged 9.7% to $19.1bn
(£14.6bn) in 2018. It is the highest
level of income earned by the music
industry since 2006, when CD sales
accounted for more than 80% of global
revenues of $19.6bn and when stream-
ing income was non-existent. Drake, one of
the artists signed
to the Universal
label, performs
at Coachella at
the Empire Polo
Club in Indio,
California
PHOTOGRAPH:
CHRISTOPHER POLK/
GETTY9.7
80
Percentage rise
in recorded
music revenues
worldwide in
2018, to £14.6bn- the highest
level since 2006
Percentage of
music industry’s
global revenues
of $19.6bn in
2006 accounted
for by CD sales,
before streamingРЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS