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Local Tie-Up?

Smuschkovich said Julius Baer might eventually link up with a local rival (the bank joined up with local lender Siam to tackle Thailand, a pattern it said it could pursue elsewhere). He prefers to establish the Swiss bank first, he noted. For now, average assets per client range from $5 million to $15 million.

Julius Baer's Russia play isn't just Moscow: Smuschkovich is ramping up Russian bankers in Hong Kong, Singapore, Dubai, Luxembourg, Vienna, London, Monaco, Geneva – as well as Zurich, where he is based. He declined to disclose how much Julius Baer has spent in the last four years for the expansion's hiring, marketing, and offices.

Happy to Invest

Even if Julius Baer's finance chief «probably smiles when he sees our numbers now,» Smuschkovich said eastern European clients typically cost the bank less in relation to revenue earned. Clients are also happy to invest, which in turn boosts the bank's returns and its managed assets.

He views a three-year bank-wide clean-up, which comes as Julius Baer grapples with a Latin American scandal, as favorable: «We've learned a lot of new things about our client's thanks to the Atlas compliance program. Many of them became emotional when looking back at how they had accumulated their wealth,» he said.

Learned From Past Mistakes

According to Smuschkovich, Russian clients are increasingly similar to their wealthy counterparts in western Europe: «The client has a family office, their children complete the best education possible on the continent, and often act as the family's financial adviser – they have learned from past mistakes, and accumulated finance expertise.»

This, he says, is where foreign institutes may have a leg up on local lenders – and may be a reason why the Russian central bank has actively chaperoned Julius Baer's efforts in the country. «A private banker who doesn't know their market or continue to educate themselves is walking in a minefield,» Smuschkovich said.

Family Ties

Julius Baer was ensnared in a Swiss weapons scandal last year, which drew the attention of Switzerland's prosecutor, as finews.asia reported. The banker's alleged deals were reportedly known to Julius Baer. The bank dismissed the banker last year, Smuschkovich confirms.

Smuschkovich is equally coy about assertions in popular Swiss banking blog «Inside Paradeplatz» (in German) that he married the daughter of a Belarus oligarch. The country, referred to as «Europe's last dictatorship» by detractors, is showing signs of moving closer to the west despite historically very close ties with Russia.

Very Transparent

«As to my familial relationships in the region which were reported by a Swiss blog, I can only say that I am very transparent towards the bank and to our chief risk officer, as every Julius Baer executive in my position is,» Smuschkovich said. His ability to pursue business in the region is not affected by his family ties, he said.

Additional reporting by Samuel Gerber