Banking in 2019: And the Winner Is...

2019 has been a successful year for the banking industry, an analysis of preliminary figures by finews.com revealed. One company excelled in particular, even though its newfound self-confidence had received a knock along the way.

The year hasn't come to its close yet and late negative surprises can’t be excluded for the remainder of 2019. Still, banking had a business year that ranked somewhere between the respectable and good for most of its members.

The analysis included the biggest banks in Switzerland and Liechtenstein and used the figures available so far for profit, net new money, cost-income ratio as well as share price.

A Clear Winner Emerges

Nine-month, half-year and interim figures available for UBS, Credit Suisse, Julius Baer, Vontobel, EFG International, VP Bank, Liechtensteinische Landesbank as well as unlisted LGT, Pictet and Lombard Odier were looked into.

The (preliminary) winner was a clear-cut choice: Credit Suisse. The bank had the strongest increase in profit, collected the biggest amount of new assets and cut its costs all the same. The share price reflected the strong performance of the bank with a 22 percent jump.

Scandal That Left CEO Unscathed

The good business also was reflected in the confidence with which CEO Tidjane Thiam took to the stage in September and the positive prevailing mood among staff. The news that the bank had mandated a team of private detectives to tail its star performer Iqbal Khan after he decided to join UBS dampened the mood somewhat but Thiam emerged more or less unscathed from the scandal. The dent in the share price was quickly recovered thanks to a good quarterly result.

Credit Suisse isn’t spared from the effects of ultra-low interest rates, which is why analysts expect it to revise some targets at the upcoming investors’ day in London. But Thiam’s plan, devised in 2015, has come to fruition after three years of lower revenues and profits, which was due to a decision to forego income from investment banking.

Net New Money Boost

Now, the bank is growing again. Pretax profit was 26 percent up from a year ago and net new money of almost 72 billion Swiss francs ($72 billion) was impressive. The 5 percent increase in net new money was a top performance in comparison with peers. Only LGT had stronger growth, measured in the first half.

Arch-rival UBS by contrast had a drop in profit and net new money increased by 1.5 percent, markedly less than at Credit Suisse. The cost-income-ratio of UBS was 80.6 percent, which compares with 77.4 percent at Credit Suisse.

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