Banque Syz is going through tough times and the first half of 2019 resulted in a substantial loss, information obtained by finews.com showed. The bank says that everything is going according to plan.

Syz, a Geneva-based private bank, had a loss of 10.6 million Swiss francs ($10.7 million) in the first six months of 2019, according to a document obtained by finews.com.

The document also revealed that revenues are declining at a faster pace than the bank manages to cuts its costs. Income from the commissions and fees business was 72.4 million francs.

The bank had operating expenses of 79.9 million francs and a value adjustment of 6.5 million francs – together they pushed the bank into the red.
Eric Syz, the owner of the bank, responded to a request for comment by finews.com with a written statement: «We are at exactly the point of our evolution where we expected it,» he wrote. He said that he had had many client meetings in the past six months which was extremely helpful in its quest to reach the financial targets of those clients.

Drop in Revenue

The comparison with the year-earlier period makes for sobering reading. In the first half of 2018, the bank had realized a small profit of 1.2 million francs on revenues of almost 100 million francs. In other words, the bank had a drop in revenue of more than a quarter year-on-year.

Costs also declined, to slightly less than 80 million from 95.7 million, but the decline wasn’t enough to make up for the drop in revenue.
The real reasons behind the substantial decline in revenue wasn’t available to finews.com. Several private banks have complained about a lack of activity by their clients and seen revenues drop – their concern about an impending crash overshadowed the more-or-less positive development of the market.

All According to Plan?

The figure for assets under management at Syz also isn’t available. The bank had assets totaling 28.8 billion at the end of 2018. The document seen by finews.com showed that the bank attracted net new money in both wealth management and private market investments.

Syz wrote that the development in asset management under new CEO Will Nott was in line with the strategic plan.

Long-Term Decline in Revenue

The drop in revenue comes at a difficult moment as Syz currently is undergoing a major reorganization in connection with the succession plan. The bank in spring installed a new CEO – Yvan Gaillard – who will take charge of the operational business.

Founder and owner Eric Syz will concentrate on the strategic level and meet with clients. Nicolas Syz, one of his sons, was made head of private banking. Marc Syz, the older son, has already been active as head of private market investments.

The bank needs to turn around the fortunes of the company. In 2016, the private bank generated a profit of 9 million francs. Assets under management measured up to about 40 billion francs. It came as little surprise that some observers suggested the bank was up for sale – a suggestion that the bank itself rejected out of hand.