Return to UBS tops private banking poll
Switzerland
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Despite still being overbanked, Switzerland will not witness a wave of consolidation in the coming year, say leading players in the market. “We will see some consolidation; we are overbanked to some degree in Switzerland,” says Urs Roth, chief executive officer at the Swiss Bankers Association. “But the domestic market is in very good shape. There is always potential for consolidation but we do not have that many players that we will see a wave.”
Barthélémy Helg, managing partner at Lombard Odier Darier Hentsch, agrees. “We have seen some consolidation but not the wave of mergers some had foreseen,” he says. “People were saying there would be 15 to 20 mergers this year but we haven’t seen them.” He adds that with 90% of the banks being privately owned, they are happy to run a stable business so see no need for mergers.
Helg predicts that, after lean times in the past four years, 2005 will be a good one for the Swiss market. “It will be significantly better for Swiss banks,” he says. “At the beginning of 2004, after the first quarter, some people thought the good old days were back. In the end it has been challenging but a good year after all.”
Both Roth and Helg say working conditions continue to get tougher. “The regulatory burden is getting enormous and getting heavier every day,” says Helg. On top of that, clients are increasingly demanding, forcing costs upwards.
However, he believes Switzerland retains a unique position in the private banking world. “There are only a few places where a private client can go and buy any type of product in any market reporting in any currency with the quality a Swiss bank provides,” he says. “We are performing very favourably.” Helg believes that evolution in technology means critical mass is no longer vital to survival. “Outsourcing allows you to fit your business model to your size.”
He adds that there is evidence of Switzerland’s health as a financial centre in the fact that his bank has been hiring new staff from London and Paris. “They see better career prospects and a better quality of life [in Switzerland] which is not to be underestimated,” he says.
