Almost CHF 5,000 billion in assets under management, mortgages totaling CHF 297 billion and loans totaling CHF 106 billion: These are the figures from the new megabank that are causing headaches. Could Postfinance help?
The Postal Organization Act prohibits Swiss Post and Postfinance from granting loans and mortgages, even though they have a banking license. With an amendment to the law, however, this ban could easily be lifted and Postfinance allowed to take action in these areas. Last year, the Federal Council tried to do just that – but failed because Parliament rejected the proposal.
With the takeover of Credit Suisse by UBS and the resulting megabank, the situation is new. This means that the discussions about postfinance are topical again. The chances of getting loans and mortgages through Parliament are probably better.
Wanted more competition
The first voices in politics are already calling for the ban to be lifted. As a result, Postfinance would then have a full banking license and could issue loans and mortgages. It is hoped that this will lead to more competition, which has been stalled by the takeover of Credit Suisse.
Other exponents even go so far as to call for the Swiss part of Credit Suisse to be spun off, which could then be merged with Postfinance. In an election year, however, such statements should always be treated with caution.
Full banking license may make sense
Maurice Pedergnana, Professor of Banking at the Lucerne University of Applied Sciences and Arts welcomes a full Postfinance banking license under certain circumstances. But he also says: “I don’t think it’s a good idea to simply equip the current Postfinance with a banking license so that it can then be even more active in the core business of the Raiffeisen and cantonal banks.”
However, if you are aiming for Postfinance to gain a foothold in the corporate customer business together with another international partner, then that is an idea that you have to pursue for ten to 20 years, says Pedergnana. “Then she has a right to exist.” But then it also makes sense to separate Postfinance a little more from the postal group, says the banking professor.
Pedergnana is skeptical about a merger between Postfinance and the Swiss part of Credit Suisse: “I don’t see that as an immediate option because it means that individual parts of one bank are combined with other parts of another bank.”
This simply shifts a business risk onto the federal balance sheet and income statement. That can not be.
Such combinations are extremely difficult and often not practicable: “I don’t think that this is ultimately effective.” He also doesn’t think it would be in the taxpayer’s interest. Because Postfinance is 100 percent owned by the federal government: “This simply shifts a business risk to the federal government’s balance sheet and income statement. That can not be.”
In the long term, Postfinance could therefore defuse the market if it sets the right priorities and works with international partners. In the short term, however, other institutions will have to step into the breach to slow down the megabank.