An investigation into Raiffeisen Switzerland has ruffled feathers among the 255 banks which form the cooperative, a survey by finews.com revealed. They expect the headquarters to act swiftly and inform their members.
«We can’t comment on the ongoing investigation»: a standard excuse, but not the one that journalists receive following the revelation that banking regulator Finma is looking into Raiffeisen Switzerland. Instead, it’s the answer that Raiffeisen member banks receive when they inquire at the St. Gallen-based headquarters what the affair is all about.
The lender is structured as a cooperative of 255 member firms – all stand-alone banks. Together, they form the third-largest bank in Switzerland after UBS and Credit Suisse.
«We Know as Little as the Public»
And it is those members of the group that feel neglected and kept in the dark: «We know as little as the general public, and that is obviously regrettable,» said one such banker in an interview. The members are upset because Raiffeisen Switzerland, which is a service unit for the 255 banks, may taint the image of all involved.
«We demand from headquarters immediate transparency about the cause of the investigations,» the banker added.
Tradition of Non-Interference
Raiffeisen Switzerland has yet to answer to a request for information by finews.com. Patrik Gisel, the CEO of Raiffeisen Switzerland, yesterday told «Finanz und Wirtschaft» (in German, behind paywall) that the Finma inquiry is focused on governance issues relating to the bank’s majority stake in Investnet.
The autonomous business model of the Raiffeisen cooperative may hurt more than it helps: «We have our management, the headquarters has its own,» a banker says. And that also means that the various managements don’t interfere into what the others do.
No Revolt – Yet
The member banks elect the board of Raiffeisen Switzerland once a year, but the influence on the cooperative's business still remains relatively minor. «The board decides about strategy, but acquisitions and stakes remain in the domain of the executive leadership,» a Raiffeisen banker explains how the group operates.
The operative executives of Raiffeisen Switzerland, Pierin Vincenz until September 2015 and Gisel since then, are relatively free to do what they think is best. And Raiffeisen of course has been fairly successful and built its own wealth-management empire.
With this empire foundering and Finma investigators looking into the dealings of the bank, the hands-off approach suddenly appears outdated and naive. The member banks haven’t yet openly revolted but should the investigation reveal anything untoward, the mood among the traditional banks of farmers and small-time entrepreneurs may yet turn ugly.
