The collapse of Credit Suisse last year fundamentally changed the Swiss banking sector. According to the latest EY Banking Barometer, there is still a risk of considerable adjustments in the corporate client business in particular.

The reorganization of the Swiss banking landscape since UBS’s takeover of Credit Suisse is likely to have a long-lasting effect. These were the findings of this year’s EY Banking Barometer, published on Thursday. It also suggested that a gap in the offering could open up in the corporate client business in particular if credit becomes tight.

The majority (66%) of the bank representatives surveyed anticipate that there will be adjustments in the medium to long term. For the 14th edition of the EY Banking Barometer, the authors contacted more than 100 Swiss banks in November 2023.

Tighter Regulation

The survey participants also stated that UBS’s takeover of Credit Suisse made a key contribution to stabilizing the financial markets. However, banks are expecting tighter financial market regulation as a consequence of the takeover. They mentioned stricter liquidity and capital requirements (62% and 40% respectively) and increased supervision by the Swiss Financial Market Supervisory Authority (FINMA) (67%).

This year’s EY Banking Barometer also shows that Swiss banks are starting 2024 with a healthy dose of optimism. They can look back on a year of very positive business performance and anticipate that the high profits made in 2023 will help to boost resilience.

Experts Amazed

Retail banks in particular want to retain their profits in order to strengthen capital and thus improve their own resilience, with the report indicating that this is the plan of 72% of regional banks and 42% of cantonal banks. Banks active in wealth management, meanwhile, intend to invest in developing their business models (38% of foreign banks and 30% of private banks).

The study’s authors were amazed to learn that only 8% of the banks surveyed want to invest in improving benefits for the customer, commenting that this is quite astonishing given that customer expectations are rising and customer queries have become more complex.

More to follow.