6 Comments on "Why Banks Say No to You But Yes to Me"

  1. Hi Streber, about the last paragraph of your response, could you tell me which private banks may well fit in that description ?

    • Hi Javier,

      I know it’s not a very helpful answer, but that would be in essence be all private banks. Their business model is conserving capital on your behalf, which is a very low-risk endeavour and therefore typically subject to comparatively lenient due diligence.

      I have an article coming next month which goes more in-depth about private banking, in which I will mention a couple of banks. The Swiss are the masters of private banking and you can’t walk more than a block in central Geneva or Zürich without seeing a private bank.

      One bank I’ve mentioned a lot in the past is Jyske Bank in Gibraltar and next week I will talk about Crèdit Andorrà which will include some praise for their private banking and wealth management services.

      Hope that helps; stay tuned!

  2. A few specific comments since being turned down by banks can be frustrating as they often don’t tell you why and often don’t tell you their requirements going in.

    1. Providing more due diligence tends to help – for whatever reason banks love paperwork even when it means nothing, burying them in it can be helpful specifically if it helps to make a reputable case for you. I’ve had senior bank people at for example Singapore banks tell me “I want evidence to show that you are who you are”, we’ve gone so far as to provide them with diligence packages that included recorded conversations with clients, copies of invoices, signed agreements with clients, etc. to prove our business activities are what we say they are and this has helped smooth the process over considerably. This is probably also where jurisdictions that require audited financial statements (Hong Kong, Cyprus, Gibraltar resident companies, etc.) have some advantages opening accounts over companies incorporated in countries without reporting requirements. This of course has some trade offs that come with it but it’s generally advantageous when opening bank accounts.

    2. Nature of business seems to be a big point of contention – the main decline reasons I’ve seen are:

    – No local connection (or regional, for example SEB wants to work with companies with a Baltic connection, Standard Bank wants to work with companies with an African connection, etc.)

    – Unfavorable jurisdiction this can be for the UBOs (most specifically for Americans, I had Investec Mauritius tell me they would go so far as to potentially deny companies because the company had clients in the US due to their fear of FATCA, and I have associates who have been flat out told by private banks in Singapore that if they were US residents they’d be denied and they weren’t excited about Australia or UK either but people from more remote less established countries they’d welcome with open arms) but also for the companies themselves (for example CIM seems to pretty much reject all tax haven companies, BOV has a lot of similar restrictions, etc.)

    – Nature of business this is a big one for example Lloyds in I believe it is Jersey only wants a very limited range of companies, a lot will decline online gaming companies, etc. but in general this seems to revolve around the AML, fraud, etc. concerns of certain types of business (you see this among CSPs and trust companies as well)

    I generally find it’s helpful to learn a bit about the bank in advance if possible (higher up personal relationships seem to help a lot as well) and to understand where they are coming from. If you can speak to their concerns and desires in advance you’ll have a much better chance for example understanding how they make money (there’s a reason it’s a lot easier to get set up at private banks where they are making money managing your money than in retail banks where your savings just sit there, commissions managing $250k are substantial when retained but just having the odd deposit and withdrawal hardly makes the investment of on-boarding a client worthwhile) and what their risks are.

    • All very good points. Thanks for your comment(s)!

      Due diligence is ultimately more about the bank protecting itself in case of a legal dispute or criminal investigation than it actually cares about who you are. You could walk into a bank to open an account for a run of the mill IBC, and most banks would trust you after you the usual corporate documents. The reason they would ask for more is because you seem off or the banks considers you or the structure risky.

      Bank business activity requirements tend to be fairly weak policies, at least with banks that engage in global banking open to anyone. In the case of Lloyds, they might not want your business in Jersey but would accept you in UK. If you can convince them why, it is sometimes possible to open an account effectively in the UK but domiciled in the Jersey for tax/secrecy/whatever purposes, or vice versa. HSBC, BNP, and other large banks do this from time to time. It’s a selective process, though.

      Private banking is indeed subject to more lax due diligence. Some private banks lock you in by only accepting incoming from and outgoing transfers to accounts in your own name, or from a list of pre-approved third parties. For private banking, that should be fine.

  3. “Some banks only cater to wealthy people. Unless you have a few million to deposit, don’t even bother contacting banks that clearly are only interested in wealth management and private banking services.”

    Do you know good (stable and great returns) banks which accept lower deposits for wealth management and private banking? For example, banks accepting 50k to 500k deposits. First bank that comes in mind for PB with a 200k deposit: jyskebank.com

    • If you can go up to 250,000 CHF or EUR, there are a couple of Swiss banks that will consider you, such as ZKB, Julius Bär, Heritage (starts even lower), EFG, Falcon PB, Pictet, and so on. I don’t have experience with all of them but I can’t imagine any of them being anything but good at what they do. National Bank of Abu Dhabi (NBAD) has a branch in Switzerland. If their UAE based private banking is anything to go by, they might accept you for under 500,000.

      I was recently in Andorra and opened a private banking account with a minimum deposit of 100,000 EUR. Both Crèdit Andorrà and BPA start their minimum around that amount (BPA will hint that they expect the capital to grow over time), and they both do a good job. For private banking, I’d say BPA has a slight edge of Crèdit Andorrà.

      There are a couple of banks in Monaco that might fit your bill. Monegasque banks usually start at around a million but CMB for example will settle for 250,000 in some cases.

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