Mr Kuenzi, a German national who spoke excellent Russian, left UBS two weeks ago having built up the business from scratch since 2006.

A source close to the Swiss bank said Mr Kuenzi had been replaced on an interim measure by Russian Dmitry Fedossov, who has a background in products and services.

"UBS remains committed to this important and developing market and we are continued to build our presence," said the source.

Steven Meehan, recently appointed as chief executive of UBS in Russia, said growing wealth management would be one of his main priorities.

UBS opened a representative office in Moscow in 1996, and entered into a joint venture with local brokerage Brunswick in 1997. In 2004, UBS purchased the remaining stake in the joint venture, and re-branded the business as UBS in 2005.

In 2006, UBS received a banking license from the Central Bank of Russia, allowing it to offer wealth management, asset management, rouble fixed income and foreign exchange services onshore.

UBS declined to comment.

Despite projections of massive growth, the onshore private banking market remains small by international standards with many Russians preferring to keep their money in the Caymans or Cyprus.

Credit Suisse, one of the pioneers in Moscow, estimates the nascent Russian private banking market has about $15 billion in assets, with the potential to grow to $400 billion.

It is this potential which lured many international players such as HSBC and Union Bancaire Privée to set up private banking shops in Moscow last year.

The current credit crisis has put on the squeeze on Russia's billionaires who are facing depressed equity valuations, difficult refinancing activities and an increasing number of margin calls from Western financial institutions.

This environment, however, may ultimately benefit international private banks, according to Alexander Kotchoubey, head of international development for Russia and Eastern Europe at Lombard Odier.

"Family offices in Russia who have built up a staffing of 25 analysts and investment hurdles of 30-40 per cent are no longer sustainable," Mr Kotchubuey told WealthBriefing.

"I think we are going see many of these operations collapse into the arms of the banks," he added.