Smaller banks in Switzerland are running at a
loss and the Swiss industry should expect to see more consolidation
driven by the higher cost of doing business, according to the head
of Pictet.
This month, Nordea Bank’s Luxembourg-based
subsidiary bought part of Sydbank’s private banking client base in
Switzerland. In August, ABN AMRO sold its Swiss private banking
business to Union Bancaire Privée.
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Jacques de Saussure, senior partner at
Switzerland’s third-largest private bank, confirmed Pictet was
grappling with the same currency mismatch as many of its Swiss
competitors.
De Saussure said two-thirds of Pictet’s staff
were based in Switzerland, while more than 80% of its revenues were
not booked in Swiss francs.
Tackling its cost base
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By GlobalDataOne way Pictet has tackled its costs has been
to offshore some operations. De Saussure said much of its fund
administration was carried out in Luxembourg and IT development is
done in Canada.
Assets under management are understood to have
grown modestly in the third quarter to CHF252bn ($285bn) at the end
of September, compared with CHF249.8bn in the second quarter.
Sticking to organic
strategy
De Saussure said, despite Pictet’s strong
position and the M&A opportunities available, the Swiss bank
would stick to its strategy of organic-led growth and would not
look to acquire any smaller rivals to boost operations.
“When competitors are consolidating, they
spend time focused on integration, not on their clients,” he
said.
“I prefer that we grow in quality, not
quantity.”
De Saussure added, despite these business
challenges, the bank was continuing to develop its business
outside Switzerland, recently hiring a new head in Asia and opening
asset management offices in Osaka, Japan and Taipei,
Taiwan.
The firm has also expanded its UK operations
to allow Scandinavian clients to be served from London.
