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It will be crucial for Swiss private banks to be able to position themselves against the remaining big bank and retail banks by offering clear unique selling points
In the IFBC Sector Report - Swiss Private Banking, we provide you with our latest assessments of the financial performance and value creation of Swiss private banks. In addition, current challenges and trends in the sector are analyzed. The published annual reports of 32 Swiss private banks provide a comprehensive data basis.
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The decline in the average RoA of large institutions is due to a decline in income coupled with an increase in average assets under management (AuM). Small institutions tend to show the same trend. However, very good results from a few institutions led to an increase in the average RoA. In order to strengthen the core business in the long term, growth in AuM must not come at the expense of profitability.
Profitable growth in the core business is of great strategic importance for Swiss private banks. Swiss private banks are particularly successful when they position themselves clearly – either as large, internationally active providers with a broad product portfolio or as focused niche players in their home market. Consistent positioning is a prerequisite for sustainable success.
Small private banks have fewer opportunities to scale their cost base. Against the backdrop of ongoing cost growth and a return to a low interest rate environment, cost efficiency is becoming even more important. If the growing cost base cannot be sustainably translated into higher revenues, there is a risk of accelerated consolidation among small Swiss private banks.
Greater involvement by retail banks in the investment business is intensifying competition for Swiss private banks. It is to be expected that established private banks will face greater challenges in further increasing their assets under management and maintaining their margins. It will be crucial for Swiss private banks to be able to position themselves vis-à-vis the remaining big bank and retail banks by offering clear unique selling points.
For detailed insights from the study and benchmarks, contact: Christian Hirzel and Noel Sager.
(The document is available in German only.)
More information about our offering for Financial Services.
Also of interest to you, our article on Value-based Management.
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