This year's turbulent stock markets made private banks' clients even more careful than they had been since the financial crisis. For the banks themselves the downturn means that growth will remain elusive. 

The marked stock market downturn toward the end of the year is bad news for Swiss private banks in more than one way: They felt the effect of clients holding back from trading, with activity slowing down even more after years of post-crisis reticence.

When markets are wobbling, wealthy clients prefer to hold cash, rather than taking risks by investing. That hurts private banks' revenue, which is driven in part by fees charged when clients trade. 

No Gains

At the same time, dropping shares prices around the world erode the very raison d'être of private banking: pile of money they manage. Despite positive net new money, many banks may not grow their assets under management this year. 

Even some conservative firms did not grow their client assets in the first half of the year, figures published in summer show. 

Geneva private bank Lombard Odier's assets under management stagnated in the first six months of the year. The lack of growth was due to the market environment, the bank said in its half year report. Net new money was positive in the period, it said. 

Local competitor Pictet had similar troubles. Assets under management grew a mere 0,6 percent in the first half of the year.

Big Banks Did Better

UBS's global wealth management did better by comparison. Despite net new money growth of only 1,8 percent in the nine months through September, assets under management grew 2,1 percent during that time.

At Credit Suisse's international wealth management division assets under management rose by only 0,4 percent, despite net new money growth of 5 percent in the first three quarters of the year. 

Elusive Growth

These figures indicate that sustainable gains in revenue or profit will remain elusive for Swiss private banks. They may have cut costs further this year, the foundation of their business has remained unchanged since the beginning of the year, however. 

Given the worsening outlook for the global economy, their assets under management are likely to continue stagnating in 2019.