“Foreign clients like our stable political system”

 

Adrian Noesberger is also the President of the Association of Foreign Banks in Switzerland.

 

It’s been about a year since the second-biggest Swiss bank, Credit Suisse, was absorbed into UBS. The immediate speculation was that foreign banks would be the big beneficiaries of this situation. What do their financial results show now?  Have they indeed benefitted?

When a large international bank like Credit Suisse disappears, with such a broad business model, obviously all market participants will benefit. Domestic banks, foreign banks – I think less in private banking and retail banking, but much more in investment banking and commercial banking, including lending and trade finance.

 

The number of Swiss banks has decreased since the financial crisis in 2008. The same is true for foreign banks in Switzerland. Do you see a possibility that this trend could even reverse now, based on the disappearance of Credit Suisse?

We follow this data very closely. The number of institutions – it doesn’t matter if it’s domestic or foreign-owned banks – has more or less similarly decreased. I think it’s more a consolidation and has nothing to do with the attractiveness of the Swiss financial center. Switzerland remains very attractive for doing banking. We see now there is a new bank joining us here in Switzerland, the Banca Generali from Italy. So I think this trend is not continuing, and Switzerland remains very attractive.

 

In times of globalization and international information exchange on bank accounts, what do foreign clients specifically seek from foreign banks in Switzerland?

First, I think this type of client wants to diversify their portfolio, not only in asset classes but also in jurisdictions where they do banking. And if they make a shortlist, Switzerland is always at the top. I think it mainly has to do with our political system. If you compare Switzerland’s political system to our neighbors or other large markets, it’s quite boring. But that’s what they like. It’s the sustainable and trustworthy system that we have in Switzerland. The infrastructure but also the multicultural approach – we speak many languages, we do international banking – and the talents that we have in Switzerland. So I think it’s both – it’s the clients that are looking for a jurisdiction like Switzerland but also international banks.

 

Looking at Schroders specifically, the British global asset and wealth management provider where you are heading the Bank’s Swiss branch with offices in Zurich and Geneva: What is Schroders’ specific strategic focus here in Switzerland?

As Schroders Group, we are a global investment house. We operate around the globe with almost 40 offices and have more than 60 investment teams. In Switzerland, we are not only here for our clients – we serve large clients but also private clients here in Switzerland – but also for the investment expertise that the group found in Switzerland. Besides the UK, Switzerland is the most important hub, especially when it comes to private markets, including private equity, private debt, insurance-linked securities or impact investing. For example, five years ago we acquired Blue Orchard, a very well-known company for microfinance and sustainable impact investing. So it’s both the clients and also the investment expertise that the group found here.

 

What developments do you anticipate for cross-border banking?

When we talk about cross-border business as a Swiss bank, it’s mainly Europe as a continent, and we have to distinguish between the EU and the UK. Now with the UK, we just recently signed a mutual recognition agreement, which now needs to be ratified in the parliaments. That will offer Swiss banks very attractive opportunities in the UK. Now with the EU, the Swiss Bankers Association and the Federal Department of Foreign Affairs seek to find an agreement on what is called an institution-specific approach. That means that the bank can have market access to the EU without having the entire financial industry adopting EU regulations.

 

Looking at banking more broadly, what future trends do you currently anticipate?

Well, as an engineer, I am interested in technology. I was fascinated by blockchain, but I am much more fascinated by artificial intelligence. Believe me, this will be a game changer – probably not only in our industry, but in general. Nevertheless, in the end, it comes down to trust. Clients are looking for a jurisdiction they can trust but also for an institution they can trust. That will not go away.

 

Adrian Noesberger, thank you very much for talking to us.

You are welcome, thank you.