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One year after Credit Suisse’s collapse, cantonal banks do not see themselves as profiteers. To this end, foreign banks are vying for former big bank customers.
Will the cantonal banks benefit from the CS shutdown? According to a study by the Lucerne University of Applied Sciences, customer funds amounting to 60 billion francs flowed out of the big banks in the period between the escalation of the CS crisis and the merger with UBS. Well over half of them go to the cantonal banks. The cantonal banks have the advantage that they act “like a safe haven” thanks to state guarantees, says Lucerne bank expert Simon Amrein. 21 of the 24 cantonal banks have an explicit state guarantee.
What do the cantonal bank bosses say about this? Urs Baumann, head of Zurich and therefore the largest cantonal bank, confirms that his bank has gained “an increasing number of CS customers”. However, there has been a “movement towards safe havens” in the past two years. “In general, the CS effect is overestimated, especially when we look at our institute.” Christoph Bugnon, head of Uri and therefore the smallest cantonal bank, says: “We didn’t profit a lot.” The reason: Credit Suisse was not very strong with one branch in his canton.
Legend:
The Credit Suisse branch in Altdorf was the only branch in the canton of Uri. No big competition for the Urner Kantonalbank.
KEYSTONE/URS FLUEELER
Which customers change? According to banking professor Maurice Pedergnana, cantonal banks are not the first port of call for customers with double-digit million assets. “They don’t necessarily switch to a small Swiss bank; they feel comfortable at a large, global bank.” For example at JP Morgan or Goldman Sachs. Cantonal banks have also become more selective in accepting new customers. “You don’t want to accept customer money because of a small improvement in interest rates that might flow out again in six or twelve months.”
Are companies now at the mercy of UBS as the only major bank? This is exactly what the Swissmem industry association feared after the CS exit. For many companies, export financing is an extremely important service and they receive this primarily from larger banks. Now, a year later, says Swissmem President Martin Hirzel, cantonal banks are jumping into the gap here and there. And: “In fact, we sense great interest from German banks, for example, in gaining more of a foothold in the Swiss market.”
Do customers also benefit from the success of the cantonal banks? Savers are clearly missing out, says consumer advocate Sara Stalder. The cantonal banks are doing great – not because of the end of CS, but thanks to the lucrative interest business. The 24 cantonal banks generated a profit of 2.3 billion francs in 2023, a quarter more than in the previous year. “On the one hand, the savers received too little interest, and on the other hand, they still have to pay fees,” says Sara Stalder. Fees that were imaginatively introduced during the low interest rate phase but were no longer reduced.