Notenstein La Roche has to urgently reduce its costs. CEO Adrian Kuenzi told finews.ch that he will have to cut jobs to do so. At the same time, the private bank still aims to invest in its future.
Notenstein La Roche private bank has started implementing a cost-cutting program that will affect all its units. Two-thirds of the targeted savings will be achieved by reducing the headcount, CEO Adrian Kuenzi told finews.ch on Friday, after being asked to comment on results of its investigation.
«Notenstein La Roche currently has costs amounting to about 135 million Swiss francs. We want to reduce them by 10 million francs, through savings for staff, but also on expenditure on material goods,» Kuenzi said.
Lay Offs, Early Retirement, Part Time
The private bank will fire ten to twelve people. A further ten employees will be taking early retirement and ten will reduce to part-time hours. In an additional measure, the bank won't replace some of the staff leaving the company outside this cost-savings program.
To reduce costs further, Notenstein will either stop or pare back sponsoring activities. In Geneva, it has leased out the Restaurant Nonolet, which it owns.
Sluggish Business
The bank has to reduce its costs not least because business is sluggish, Kuenzi told finews.ch. «It is no secret that 2016 so far proved to be a difficult year for Notenstein La Roche, much as for the entire industry,» he added, hinting at the difficulties on the equity markets and the strength of the Swiss franc.
The Swiss private-banking market, on which Notenstein La Roche concentrates, has seen very low growth rates for a considerable time and the structural and global changes affecting the business prompted many companies to refocus on the domestic market.
Investments in New Software
Kuenzi nevertheless holds to Notenstein La Roche strategy of a strong private-banking division within the Raiffeisen Group and to turn it into a dominating company on the domestic market. Thus, the CEO of the bank also wants to offset cost savings against investments in its future.
In doing so, Notenstein La Roche is accelerating the introduction of the Avaloq core banking software. The switch to the new system was originally planned for 2018, after a similar move at Raiffeisen. The move will cost about 30 million francs, which the private bank is financing from its own coffers.
Going Digital
«The move is very important for us because we will launch a series of digital projects in the near future,» Kuenzi told finews.ch. «We also want to make further acquisitions. For that we need the platform on which to achieve scales.»
Acquisitions remain core of Notenstein's growth strategy. They are a condition for the bank to achieve its target of doubling assets under management to 44 billion francs within three to five years.
Further Takeovers Remain a Target
Achieving organic growth of assets under management is currently seen as difficult. «This is also why we are so happy that the integration of La Roche has been met with such great acceptance among our customers.»
Kuenzi suggested that further takeover targets remained within the focus of the bank, but given the impending migration of the bank's IT, large deals currently take the back seat.
