The Basellandschaftliche Kantonalbank has founded a digital bank in Zurich and wants to grow in this way. But she gets a lot of criticism. Expansion projects by cantonal banks are generally controversial.
Just two days after the collapse of Credit Suisse, a new bank was launched in Zurich without much ado: Radicant, an online bank for sustainable investments. What they have in common is that the state has a hand in both banks.
While the federal government orchestrated and co-financed the rescue with UBS at CS, Radicant is a subsidiary of the Basellandschaftliche Kantonalbank BLKB, which in turn belongs to the state.
Another similarity: As soon as the state is involved, there is criticism. In the case of Radicant, for example, it is the Basel-based cantonal parliament that has overall supervision of BLKB and is concerned about the expansion with Radicant in Zurich.
SVP District Administrator Peter Riebli has major concerns: “I don’t quite understand how the bank should fly.” So there are already similar offers and also financially some things are unclear. “The fear is that the canton will eventually have to write off a three-digit million amount.”
Banking expert Monika Roth is also critical. She even speaks of a marketing gimmick. For example, Radicant offers investment products related to the 17 UN goals for sustainable development, including combating poverty and hunger, climate protection or the promotion of education and health. The fact that a product now contains shares in luxury goods manufacturers makes no sense to Roth.
It is illusory to fool the public into pursuing the UN’s 17 goals as an investment objective.
“It is illusory to pretend to the public that the 17 goals of the UN can be pursued as an investment goal. Because it’s obvious that you can’t fight poverty with a plant in Louis Vuitton, for example,» says Roth.
This makes perfect sense, Radicant defends. “We analyze whether a company makes a positive contribution to sustainability,” says Rouven Leuener. That is the case with Louis Vuitton, for example because the company produces sustainably and also does a lot for gender equality.
Boss released just before the start
Rouven Leuener is co-head of Radicant, but only on an interim basis. Predecessor Andres Bally was dismissed immediately a month ago. The bank’s mastermind had expressed disrespect in an internal email about critical district administrators. Bally wrote that these older gentlemen would not understand the disruptive nature of Radicant.
«This mail was clumsy. What he wrote does not correspond to our values, »says Thomas Schneider, explaining the exemption. However, the BLKB bank council president defends himself against the criticism that Radicant will not be able to fly. So far, the bank has achieved all of its goals and is on schedule. “We expect to break even in 2026 and start making money from then,” says Schneider.
So far, BLKB has invested CHF 70 million in Radicant. The new bank is based in Zurich’s posh Seefeld district and already employs 55 people there and a further 30 in Portugal.
Distortion of competition due to state guarantee
In addition, BLKB is also expanding beyond cantonal borders with other activities, recently with branches in the cantons of Basel-Stadt and Aargau or a partnership with Lombard Odier in order to look after very wealthy customers.
Monika Roth doesn’t like that either. She generally criticizes cantonal banks that expand beyond cantonal borders with a state guarantee behind them. “This leads to a distortion of competition and is actually a shifting of risk to the taxpayer.”
Thomas Schneider replies that the state guarantee would not even apply to Radicant, as reports have shown. In addition, the canton wants BLKB to do something about the decline in margins so that profits continue to flow back to the state in the future.
“We already have a strong market position in the Basel area and are limited there,” says the President of the Bank Council. That’s why you’re looking for business areas outside of the canton. The BLKB is doing what many cantonal banks are doing: the controversial expansion with a state guarantee behind it.