Swiss banks have never managed as much wealth as now
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In 2024, Swiss private banks managed a record CHF3.4 trillion of assets. This is the mind-boggling sum reached by consulting firm KPMG, which examined 71 Swiss private credit institutions in its annual analysis.
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Thanks to the positive development of the financial markets, private banks in Switzerland increased their assets by 14% last year. This is an unprecedented figure.
Net new money also contributed to the growth, albeit at a relatively modest CHF72 billion, KPMG said in a statement released today. Medium-sized institutions in particular attracted new money from clients.
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“The hiring of client advisors by UBS/CS had only a limited effect in terms of additional new funds,” says Christian Hintermann, head of the study and banking expert at KPMG Switzerland.
The revenues of Swiss banks increased from CHF20.5 billion in the previous year to CHF21.4 billion. The increase is mainly due to higher commission and trading income. The interest result, on the other hand, decreased by around 10% to CHF4.6 billion. Banks profits after taxes increased from almostCHF 3.1 billion in 2023 to over CHF4 billion.
Higher staff costs
Operating expenses increased overall by more than CHF500 million to around CHF15.3 billion. This was mainly due to higher personnel costs, which accounted for around two-thirds of operating expenses. According to KPMG, Swiss private banks now have more than 40,000 full-time equivalents for the first time.
Due to rising costs and declining interest income, the cost-to-income ratio increased slightly from a median of 74.3% to 75.5%. Nearly two-thirds of banks recorded a higher cost-to-income ratio in 2024 than in the previous year, where smaller institutions suffered the most.
Despite this increase, the index remains at historically low levels thanks to the thriving financial markets. However, this is likely to change in 2025, with a further decline in interest rates and a more challenging market environment.
“Since the benefits of the single interest rate environment have disappeared and the SNB has lowered its key interest rates to zero, banks need to focus more on their core fee business and think about how to develop it further,” says Hintermann.
For the periodic study, KPMG, in collaboration with the University of St Gallen, examined 71 private banks active in Switzerland.
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Adapted from Italian by DeepL/mga
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