Neuchatel's Banque Bonhôte is pushing for growth in German-speaking regions of Switzerland. To that end, the bank has built up a hub in Zurich, according to CEO Yves de Montmollin in an interview with finews.com. But there is a catch.

Yves de Montmollin steps into a Zurich-bound train every week now. The CEO of Banque Bonhôte, a Neuchatel-based private bank, crosses the linguistic and politically fraught divide between the French and German parts of the country for a very specific reason. About two and a half years ago, the institution bought and integrated Private Client Partners (PCP), which is ideally located in Zurich's sought-after Niederdorf neighborhood.

From there, Bonhôte client advisors stream out in droves across the eastern and central parts of the country, underlining the bank's efforts to increase its presence in the German-speaking regions of Switzerland.

Advisors Needed

In an interview with finews.com, the CEO, a Neuchatel citizen by birth, indicates that it is the newest milestone in its growth strategy. In 2002, the bank opened a branch in Biel followed by others in Geneva, Bern, and Lausanne. Business was so good that they opened further ones in Solothurn and then finally, Zurich.

As part of the expansion, the bank always builds a local network. «We want to get into the deep core of each regional market», he says. The institution is open to connecting with new client advisor teams as well as independent asset managers.

Attracting Wealth Managers

PCP is an important element in that. Before the takeover, the family office already had a system in place that allowed high-net-worth individuals and entrepreneurs a consolidated view of all their wealth and assets held at various custodian banks. That is now being used across the entire group from the Zurich hub, offering a platform for other wealth managers. The only thing they have to do is find them.

«We have looked at a few independent wealth managers», the CEO says. But linking up has proven to be a challenge for one specific reason: «There is one particular quality that stands out from the wealth managers I meet. They want to be independent.»

On Balance

The private bank can afford to pay for further takeovers. Although the level of assets under management fell to 5 billion francs from 6 billion in 2023, commission income showed more positive developments, not least due to PCP's consolidation system, he maintains.

The institution also profited as much as its peers from the inflection in interest rates a couple of years back even though it intentionally keeps that business under relatively tight wraps. Bonhôte wants to promote an image of safety, he says, and that means not using its balance sheet for credit.

Geopolitics

Given Julius Baer's Signa debacle, that could increasingly be something that wealthy private clients highly appreciate. 

Moreover, even though 70 percent of the bank's clients are Swiss residents, the bank also has a significant international business. It is important to have one if one wants to be a reference point for others, de Montmollin indicates. But there were also positive growth prospects abroad. «We are seeing increasing numbers of wealthy individuals who want the stability of a Swiss bank. That opens up interesting possibilities», the private banker maintains.

France Rediscovered

Ironically, the clients who feel unsettled aren't only from countries far away. According to him, French individuals are rediscovering Swiss banking.

«They had to regularize themselves during the white money era. But now they are shifting assets out of France back into Switzerland.» The bank manager knows the reason why. «They don't trust their government and are looking to diversify overseas. They remember the Swiss service they once received and the advisors who took the time to talk to them.»

New Banks

However, the clients are not going back to the institutes that disclosed their data to the French authorities. Because of that, the doors are wide open for other players, including Bonhôte. «In the western regions of Switzerland, we have a reputation as a private bank that provides personal, long-tenured stewardship. Clients are knocking on our door of their own will because of that.»

Despite that, acquiring new clients has become an increasingly difficult task. The shock of Credit Suisse's collapse sits deep, particularly with high net-worth Asian clients. They believe that the large-scale write-down of Credit Suisse's AT-1 bonds negatively impacted the country's legal framework and ownership rights.

Questions about Neutrality

Then there are the questions about Swiss neutrality in the context of the Ukraine war. «The clients ask themselves if their money is safe if there is a conflict in Taiwan. We see receding interest from that part of the world», de Montmollin indicates.

The versed private banker has also made his views about the Credit Suisse debacle known on «finews.TV», maintaining that it hurt the Swiss banking center as a whole. Still, the institution managed to profit from the bankers it was able to hire away from what was once Switzerland's second-largest bank.

No Hire and Fire

A total of seven former Credit Suisse staff joined Bonhôte in Neuchatel and Lausanne, the CEO said, and further potential recruits are on the radar.

He wants to make sure that they find a safe home. «We don't have a hire and fire culture – that is something that differentiates us from other banks.» It is a unique selling point, he maintains. «Otherwise, they wouldn't come and work for a medium-sized private bank from Neuchatel.»