Switzerland: it’s hard to survive for private banks

Switzerland has seen disappear, as a result of sale or liquidation, 10% private banks in the course of 2015. Over the past year, their number dropped from 133 to 121, as revealed in a study by the consulting firm KPMG. The trend continued in 2016, with a further drop in July, with "only" 117 survivors.

Despite the disappearance of the companies less profitable in general the performance of the branch is not improved. Two-thirds of the 87 tested banks have seen their results deteriorate last year, as stated in the annual organized by KPMG and the University of St. Gallen, which excludes UBS and Credit Suisse.

Last year, KPMG had predicted the disappearance of up to 30% of institutions in a few years. Given the deterioration of market conditions, sandwiched between the strength of the franc and negative rates, such predictions are proving almost optimistic, suggest experts. In 2015 you were observed 15 mergers and acquisitions involving private banks in Switzerland, a record since 2007.

"The obligations in terms of transparency, the increasingly complex regulations, expectations of new customers and a challenging environment represent a poisoned mixture for private banks," according to Philipp Rickert, head of financial services at KPMG, quoted in a statement.

Overall, the assets under management decreased by CHF 100 billion last year, to 1449 billion. For a total of CHF 4.3 billion net of cash inflows reached their lowest level since 2009. Even worse, 54% of the banks surveyed have suffered net outflows and for 15 of them the departure of money exceeded 10 % of their assets under management.

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