Update on the Performance of Swiss Private Banks, 02/2022Download our update
In the latest edition of Clarity on Performance of Swiss Private Banks, KPMG Switzerland and the University of St. Gallen analyzed how 83 private banks in Switzerland performed across a range of measures in 2020. In a year dominated by the COVID-19 pandemic, the study found that the gap between Switzerland's strongest and weakest banks widened, with stronger banks proving remarkably resilient. The disparities can be described as follows:
Stronger banks benefited from efforts made in recent years to better control costs, improve client offerings, and grow Net New Money (NNM).
Weaker banks were hit hard by dramatic cuts in US interest rates and reduced commission income, also seeing significant falls in NNM and Assets under Management (AuM).
Banks of all sizes meanwhile acted to improve personnel expense efficiency. Personnel expense margins fell at most banks, and the median AuM per FTE rose to a 10-year high.
Christian Hintermann, Partner, Financial Services, explains in his video the trends behind the headlines, and shares his insights into what comes next.
New highs are hit as stronger banks pull ahead
In a year of record highs and record lows, some stark trends stand out:
- Consolidation surges to a record high
- Stronger banks pull ahead of the pack
- NNM reaches its highest point since 2010
- Operating income falls at eight out of ten banks
- Personnel efficiency grows as the number of employees stabilizes
- Only 20 banks say ESG is a key strategic priority for them.
The Environmental, Social and Governance (ESG) opportunity
No industry study would be complete without looking at the continued rise of ESG. By reviewing the annual reports and websites of all 83 private banks in our analysis, we identified how often and how prominently ESG is stated as a priority.
Swiss banks have a real opportunity to use sustainable finance to attract new generations of clients and reinforce Switzerland's position as the preeminent global wealth management center. But while a core group of banks has developed such client offerings over the past couple of years and is pulling ahead of peers, much more needs to be done.
We have talked to Reto Ringger, founder and CEO of Globalance Bank, a pioneer in sustainable finance, who already focused on sustainable investing 25 years before it became mainstream. Read the full interview in our study.
The following charts show samples of two key findings. More details and charts can be found in our study.
AuM development (CHFbn)
NNM hit a record high at 3.3 percent. It was the only positive contributor to Assets under Management (AuM) growth, which slowed significantly in 2020 compared to the previous year.
Meet our experts
For insights into our findings and more, download the study or contact us. We will gladly remain at your disposal to answer any further questions you may have.