Competition among Swiss mortgage lenders will hot up, Credit Suisse's domestic head Thomas Gottstein said. Credit Suisse has battened down the hatches as a result.
Mortgage lending is among the most fiercely competitive areas of Swiss banking: depending on the region, big banks like UBS go head to head with nimble regional lenders, cantonal banks, and a handful of nation-wide lenders like Raiffeisen for clients. Credit Suisse has identified an overheated housing market in 15 of the 20 regions it offers home equity loans.
«We've grown more cautious – especially with income properties», the Swiss bank's domestic head Thomas Gottstein said at a conference sponsored by «Finanz und Wirtschaft» in Zurich. State-backed lender Postfinance is about to enter the market by writing its own mortgages, which will further accentuate the competition (Postfinance has offered mortgages since 2003, but is forced to lean on third-party providers to do so).
Growth by Takeover
Postfinance has to alter its business model before it begins mortgage lending, Gottstein said: the institute is currently a «neutered bank». He called for Postfinance's lending to be linked to its privatization; otherwise, he argued, the lender will effectively operate with a state guarantee.
Gottstein said he believes Postfinance won't build up home lending organically, but take over a regional bank to kickstart its business – a sensible solution for its owner.
Branch Closures
He was optimistic for Credit Suisse's profits in Switzerland last year: «We'll report a profit of at least 2.2 million Swiss francs», he said, confirming earlier forecasts including to finews.com. «The important thing is that we play in a different league in terms of our spending and lower our cost-income ratio from 68 percent to less than 60 percent. I'm proud of that – nobody thought we could pull it off».
Credit Suisse reports full-year results on February 14. Gottstein said Credit Suisse was likely to shut more branches in Switzerland in order to hew to targets. The bank currently maintains 120 branches at home – Credit Suisse has roughly 30 of them in the last three years.
Bern Site Boost
Gottstein said Credit Suisse will seek closer ties to retailers and other firms with excellent client coverage in order to target prospective customers digitally. He wants to bolster digital solutions in particular with Switzerland's small- and mid-sized businesses, where Credit Suisse wants to speed up processes like digital «onboarding» through automation.
To do so, Gottstein said a Credit Suisse center in Guemligen, on the outskirts of Bern, will be beefed up.
