This week, the equity research team of Zürcher Kantonalbank (ZKB), which is not listed itself, examined 20 Swiss banks and financial services providers whose shares are traded on the SIX Swiss Exchange. ZKB analysts Ausano Cajrati Crivelli and Daniel Regli regularly analyze these financial institutions and make adjustments as needed.

The new study does not bring any changes to the stock recommendations Overweight (Top Picks), Neutral and Underweight. New, however, is the assessment of the sector environment and the inclusion of the half-year results.

Good Timing for a Status Check 

"The study takes into account the company-specific developments of the past few months and enables the reader to quickly get an overview of the sector and the 20 stocks," Regli, who wrote the study together with his colleague Cajrati Crivelli , told finews on request.

The timing for this review is well chosen. UBS will present its third-quarter results next week, but most of the other financial institutions covered by ZKB report in detail only on a semiannual basis. 

UBS Regulation with a Positive Side Effect for Other Banks?

The two analysts address three factors when discussing the environment.

• Interest-rate environment: The National Bank's zero-interest policy remains a burden for domestic banks, although it is manageable, as the first-half results show. The fact that the yield curve has become somewhat steeper and the stock markets are robust is having a positive effect on the sector. A possible increase in the Swiss key interest rate would also be positive.
• Economy: In view of geopolitical tensions, higher energy prices and trade disputes, the Swiss economy is proving remarkably resilient. Growth should be clearly positive in 2026 and 2027, which is also positive for banks.
• Regulation: The stricter capital requirements for UBS sought by the Council of States have "the potential to restrict UBS's capital flexibility and competitiveness." The side effect is favorable for banks focused on the domestic market, as it could strengthen their competitive position in relative terms.

The research recommends overweighting shares in seven financial institutions (the sector's so-called top picks, ranked by market capitalization), with the following arguments (selection).

• Partners Group: ZKB considers the market reactions to the negative news on gating and slow growth in evergreen funds to be exaggerated: thanks to a diversified product offering, Partners Group is likely to continue achieving strong growth in assets under management despite a temporary weakening in demand from wealthy private clients. 
• Julius Baer: Here, the study sees the start of a new chapter following the completion of the Finma investigation. "JB can now focus again on its normal business." It expects "an improvement in sentiment among both investors and employees" and a "gradual reacceleration of the bank's efforts to attract net new money." Also positive is the prospect of a high shareholder return (buybacks and dividends). 
• VZ Holding: The fears, possibly reflected in the lower share price, that artificial intelligence (AI) could impair the business model appear exaggerated to ZKB. "AI could even offer VZ opportunities to expand its offering and improve margins." The study authors also view the strong increase in advisory mandate volumes and the opening of a branch in Berlin as positive for the growth outlook.
• Swissquote: The customer and asset base continues to grow, while market shares in Switzerland and Europe remain low. Margins benefit from improved interest-rate prospects and increased volatility, which should boost customer activity. In addition, the growing online banking business (Yuh) is helping diversify revenues.
• EFG: The bank "has developed over the past 10 years from an outsider in Swiss private banking into one of the industry's flagship names." The brand has become better known, and net new money growth is attractive. Once the cost-cutting programs have been completed and old legal disputes settled, efficiency and return on equity should improve.
• St. Galler Kantonalbank: Here, ZKB emphasizes the bank's resilience and stability, supported by growing asset management activities. The earnings profile is solid, and the dividend profile is attractive.
• Banque Cantonale de Genève: The expansion of the wealth management business offers growth potential. The loan portfolio is well diversified. "We see a valuation gap versus competitors that appears difficult to justify given BCGE's above-average return on equity." 

Half of the covered financial institutions fall into the "Neutral" category. These include three cantonal banks (Vaud, Lucerne and Thurgau), the major bank UBS, broker CFT, Cembra Money Bank, Leonteq, Liechtensteinische Landesbank, Valiant and VP Bank.

The "Underweight" verdict applies to three institutions: Graubündner Kantonalbank, Glarner Kantonalbank and Vontobel.

Glarner Kantonalbank faces "structural challenges as a mortgage-focused bank with fintech attributes due to its small scale and low efficiency." According to the study, the Graubünden state bank is weighed down by its high valuation and the "asymmetric, downward-skewed risk-return profile," with the pending lawsuit by Remo Stoffel, involving a disputed amount of CHF 400 million to CHF 600 million, also mentioned.

At Vontobel, asset management, which continues to suffer from outflows, is identified as a weakness. The ZKB analysts also see room for improvement in cost management.