Consolidation in the Swiss private banking industry has largely ground to a halt, with the exception of the forced sale of Credit Suisse. Now a foreign bank is fueling speculation.
In the home market, CEO Slawomir Krupa has already wielded the knife. As finews.ch reports, French major bank Société Générale (SocGen) plans to slash hundreds of jobs (in german only) in France. This comes after the new bank CEO jettisoned the goals of his predecessor Frédéric Oudéa overboard and promised shareholders he would simplify the financial group’s organization and make it more efficient.
Action is required, as the entire group’s operating profit has sunk by a quarter to 7.5 billion euros compared with the previous year.
Rothschild Investment Banker Apparently Hired
These intentions are now also apparently impacting private banking abroad. Citing anonymous sources, news agency «Reuters» reports that SocGen has appointed Anglo-French investment bank Rothschild & Co to initiate the sale of its British private bank Kleinwort Hambros. U.K.-based banking giant Barclays is tipped as an interested party.
But that’s not all. According to the report, the French are also mulling over whether to sell their Swiss private banking subsidiary. But the discussions in this direction are still at the early stages and the plans could fall through again.
Comprehensive Selection of Banks in Switzerland
In response to a request from finews.ch, SocGen’s Swiss subsidiary said the company does not comment on rumors.
The banking behemoth has a significant presence in Switzerland, particularly in the financing of commodities trading at the Geneva hub, in corporate banking and investment banking. An integral part of this is its own Swiss private bank, Société Générale Private Banking (Switzerland), which operates from Geneva and Zurich and whose leaders often have a say in other European countries as well. The bank offers a wide range of offshore services, while also serving local customers.
Focus on Financial Intermediaries
Current figures on the Swiss private bank’s business performance are not available. In 2023, SocGen’s entire private banking division increased managed assets by 4 percent – in line with the industry trend – and was managing 143 billion euros of client funds at the end of the year. Its wealthy private individuals business accounts for only 4 percent of the group’s total client deposits.
As for its strategic direction in Switzerland, it was recently said that the bank wants to bolster its presence with Swiss single and multi-family offices and increase business synergies with other private banking units in Europe, along with the group’s corporate and investment bank.
Change of Management in Private Banking
There have also been recent changes in leadership, which could also indicate that the business is on the move. Benoît Teutsch was named the new head of private banking last September, while Franck Bonin continues to serve as the top dog at the private bank. At the start of the year, Antoine Blouin was appointed as the new head of the (in german only). But this was on the grounds that his predecessor had reached the end of his term of office.
As the annual results of leading Swiss private banks such as UBS, Julius Baer, Vontobel, and Lombard Odier have recently shown, the industry is currently grappling with the impact of the pivot in interest rates, the strength of the Swiss franc, and cautious clients. It would not be a surprise if the head office of a foreign bank were to pour over the books.
