Goldman Sachs has been in Switzerland for more than 45 years, but recently decided to bed down even further in Zurich.
The New York investment bank upgraded the Zurich office of its capital markets arm into a branch regulated by local overseer Finma. The move is counterintuitive: the trading powerhouse has been in Zurich since 1974 – but util now, Zurich had been a representative office only, Swiss head Stefan Bollinger(pictured below) said at a media event this week.
This means that the Goldman's traders in Switzerland accepted client orders, but sent them on to London to be carried out, according to Bollinger, who besides his Swiss role is also co-head of global sales strats and structuring together with Thalia Chryssikou. Bollinger, who has worked for Goldman for 15 years and made partner in 2010, said the Zurich upgrade is a strategic decision.
After long-standing CEO Lloyd Blankfein handed over to David Solomon last year, Goldman put client focus as its top priority, Bollinger noted. The Zurich move is an attempt to more closely link up trading services with Swiss clients.
Using Balance Sheet
In practice, that means Bollinger's man for security services in Zurich, Patrik Zumstein, enjoys more freedom, for example on pricing trades – until now, London had held the say-so. The upgrade comes as Goldman takes increasingly large trading positions onto its balance sheet – and authorizes its traders to do so.
The investment bank wants to differentiate itself especially with big clients, where some competitors have retreated from offering balance sheet and eased off trading.
Goldman Nomads
The move won't necessarily lead to Goldman hiring in Switzerland: the bank employs roughly 120 people between Zurich and Geneva offices. The bank's Swiss capital markets staff of roughly 25 are spread almost equally between Zurich and London. The Swiss derivative market, for example, is key for Goldman, but is handled from London – at clients' request, Bollinger said.
Goldman won a Swiss bank license in 1992, after opening in Switzerland in 1974. Wealth management, led in Switzerland by Marco Pagliara, has long been the American bank's focus. Asset management and investment banking in Switzerland are run by Pascal Mischler and Fedor Schulten, respectively.
Swiss Goldman Bankers
François-Xavier, or FX, de Mallmann is the most notable Swiss banker at Goldman: the veteran dealmaker was promoted to investment banking chairman two years ago. Last year Radovan Radman as well as Beat and Niharika Cabiallavetta were also recently promoted to partner – Beat Cabiallavetta is the son of former UBS Chairman Mathis Cabiallavetta.
In Switzerland, Goldman's focus is staunchly on trading and cash management for major clients, with few other strategic pushes of note planned. The bank's reported mortgage lending flirt is a canard, Bollinger signaled. And «Marcus» won't be expanded into Switzerland: the online-only retail bank has hoovered up £10 billion ($12.9 billion) in client funds since launching in Britain five months ago – deposits Goldman uses as a cheaper form of refinancing than in the bond market.
