Following UBS‘s takeover of Credit Suisse last year, global banks are expanding in Switzerland to capitalize on companies’ desire to diversify their banking relationships.
Major players such as France’s BNP Paribas, Deutsche Bank, and U.S. lenders Citi and Bank of America are increasing their presence and staffing in Switzerland, targeting smaller companies that are crucial to the Swiss economy.
“When one player is absorbed, the musical chairs are being rearranged and that creates opportunities,” said Enna Pariset, head of BNP’s Swiss operations. “Sometimes you’re lucky.”
Despite these expansions, it’s uncertain if they will significantly challenge UBS’s dominance.
UBS’s market strength has caused some unease and concerns at the Swiss competition watchdog COMCO.
Credit Suisse, once a natural partner for Swiss businesses alongside UBS, unraveled after a series of scandals.
“Shortly after the collapse of Credit Suisse, corporates immediately opened discussions with foreign banks like us,” said Jürg Hobi, head of Citi’s Swiss commercial banking arm.
Citi, which began serving smaller local firms with international business in September 2022, has benefited from worries about over-dependence on a single bank and a credit shortage.
Citi currently employs eight staff in Swiss commercial banking, aiming to double that by 2028.
Nicola Tettamanti, president of Swissmechanic, welcomed the moves by foreign banks, although he noted the benefits might take time to reach smaller companies.
“As a fan of competition, I am quite comfortable with more players in the market, which will lead to improved services and better prices,” he said.
At Deutsche Bank, 50 people work at its Swiss corporate banking arm, a 10% increase since early 2023.
The fall of Credit Suisse prompted Deutsche Bank to expand in Switzerland, targeting businesses with annual turnovers of at least 500 million Swiss francs ($560 million).
“We managed both to win new business and increase our business volumes with existing customers,” said Veronique Voser, head of the unit for Germany, Switzerland, and Austria, noting double-digit revenue growth in 2022 and 2023.
However, UBS, Switzerland’s largest bank, continues to dominate.
While there is broad choice for large corporations and retail clients, smaller firms feel less comfortable.
“In terms of the loans financing, I’ve seen instances where competitors have been increasing pricing, and clients have asked us to step in as an alternative,” said BNP’s Pariset.
Swiss financial regulator FINMA recently stated that the UBS-Credit Suisse takeover did not create competition concerns, despite COMCO’s warnings. COMCO urged authorities to foster effective competition, noting a lack of “fully-fledged alternatives” to UBS in corporate banking.
UBS’s Switzerland boss, Sabine Keller-Busse, acknowledged that rival banks have been trying to poach clients since Credit Suisse’s collapse.
Bank of America’s head of corporate banking in Switzerland, Brooke Wachtel, said the opportunity window for gaining new clients is closing.
“Corporates are seeking new banking partners and are expected to fill this gap within the next 12 to 18 months,” she said.
BNP, focusing on smaller exporters, has become number two in the Swiss franc-denominated bond market and aims to enter share buybacks.
Since 2022, BNP has hired around 50 staff in corporate and investment banking, including about a dozen from Credit Suisse.