The number of Strong and Upper Mid performers has risen by two-thirds since 2020. This is driven primarily by small banks, whose median operating income margin reached by far its highest point last year since 2009. Large banks remain the strongest, however, with the lowest C/I ratios and posting consistently robust performances.
A radical shift in performance clusters
Number of private banks by performance cluster
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The number of banks in the strong and upper-mid clusters is up from 30 to 50 since 2020. Small banks made up 17 of the 20 increase. The best performing bank was a small one with a C/I ratio of 35.6%. Strong banks formed the largest cluster for the first time in the history of our study, at 27 banks, or 37% of our sample.
Bank size
- Small AuM < CHF 10bn
- Medium AuM CHF 10bn – 100bn
- Large AuM > CHF 100bn
The number of banks in the strong and upper-mid clusters is up from 30 to 50 since 2020. Small banks made up 17 of the 20 increase. The best performing bank was a small one with a C/I ratio of 35.6%. Strong banks formed the largest cluster for the first time in the history of our study, at 27 banks, or 37% of our sample.
- Small banks: big improvements
Small banks benefited more from high interest rates as they had a much lower interest expense than medium or large banks. Their median operating income margin jumped from 85bps to 113bps in 2023 to reach by far its highest point since 2009. Of the 45 small banks, 43 stayed in the same performance cluster or moved to a stronger one. Eight advanced by two clusters.
- Medium banks: the weakest performers
Medium banks remain the weakest size cluster. As in previous years, many are subsidiaries of global banks and do not seek to maximize standalone performance. The median C/I for medium banks fell by only 1.2 percentage points, from 83.1% to 81.9%.
- Large banks: still the strongest
Large banks maintained the lowest C/I ratios and posted consistently strong performances. Four large banks improved C/I by up to six percentage points. Overall, C/I did rise slightly, due mainly to one bank that booked a significant loan loss provision.
Median C/I ratio
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