The Zürcher Kantonalbank ZKB once again made significantly more profit last year. The largest Swiss cantonal bank was particularly successful in the interest business. Its CEO Urs Baumann explains how much ZKB was able to benefit from the CS boom.
CEO of the Zürcher Kantonalbank
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Baumann has been CEO of ZKB, the largest cantonal bank in Switzerland, since autumn 2022. He previously worked at the consulting firm McKinsey and the credit company Swisscard. He also ran Bellevue Bank and an investment company for sustainable investments.
SRF News: ZKB has achieved a record profit. How much did you benefit from the demise of Credit Suisse?
Urs Baumann: We grow based on our strength and not because of the weakness of other banks. The so-called Credit Suisse effect is much smaller than is generally assumed. Our net new money of 37 billion is very broadly based, across all customer segments and channels – and largely independent of the situation surrounding Credit Suisse.
For us, the so-called Credit Suisse effect is relatively small.
But the CS effect probably didn’t completely bypass the ZKB, right?
The Zürcher Kantonalbank is a haven of stability. This has brought many customers to us, regardless of the situation surrounding Credit Suisse. A calculation example: In the first nine months of 2022, before the first Credit Suisse case, we had already attracted net new money amounting to 27.9 billion francs. In all of 2023 it was 36.8 billion. For us, the so-called Credit Suisse effect is relatively small.
The higher interest rates are extremely important for cantonal banks like ZKB. Was that the driver that gave you a big boost last year?
That’s right. The interest rate turnaround had a major effect on all banks. The change in interest rates means we can pay our customers interest again on savings accounts, medium-term bonds or fixed-term deposits. The margin has started to normalize.
A windfall for the canton of Zurich
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ZKB’s good annual results are also good news for the canton of Zurich and the municipalities: they will receive a record-high distribution of 528 million francs.
The interest margin didn’t increase much at all last year…
The interest margin in deposit business has normalized. The interest margin on the savings account has not increased. We were one of the first banks to increase interest rates on savings accounts after the interest rate change and made three further increases this year.
As the safest bank, they cannot offer the highest interest rates.
Nevertheless, ZKB does not pay particularly high interest on savings accounts compared to other banks. Although they have eliminated fees on the accounts, they have not increased the interest rates significantly.
Zürcher Kantonalbank is the world‘s safest bank with three triple-A ratings. As the safest bank, they cannot offer the highest interest rates.
They increase the profit distribution to the canton and municipalities. That’s actually appropriate for a state bank. What about the bonuses for your bankers and the remuneration for you as the boss?
The Bank Council has decided that the variable remuneration per capita for this year will be capped at the level of 2022.
The interview was conducted by Jan Baumann.