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Median bank's performance

Clarity on Swiss Private Banks

In this section, we analyze the median – or middle – Swiss bank’s performance. This is based on our constant sample of 73 banks for 2018 to 2022, i.e. we analyze the performance of the same 73 banks each year.

For the purpose of this analysis, we attribute the same weight to each bank irrespective of the bank’s size or other characteristics.

This analysis is more representative of the number of banks in the industry, which is dominated by the development of small and medium banks as the largest segments (89% of the banks in our sample).

Christian Hintermann
Christian Hintermann

Partner, Financial Services

KPMG Switzerland

Negative market performance offset by boost in interest income

Many key ratios reflect how challenging 2022 was, especially those relating to AuM. Other ratios such as RoE and the cost-income (C/I) ratio deteriorated slightly, balancing out as the stronger and weaker halves of the industry moved in opposite directions.

Most banks benefited from a growing interest margin, with the weak performers gaining most from interest rate increases. However weak banks were steady at a very low level of RoE, while the strong performers significantly increased their RoE further in 2022.

Clarity on Swiss Private Banks
  • The individual performance clusters have been on different trajectories since 2016, with the gap between the strong and weak performers widening. Strong performers increased their RoE significantly further in 2022, while weak banks were steady at a very low level. Overall, median RoE was stable at 4.6%.
Clarity on Swiss Private Banks
  • Overall C/I remained stable at a very high level at 81.3%.
  • While the median C/I of medium-sized banks fell from 88.0% in 2021 to 83.9% in 2022, the large banks reported an increase from 67.2% to 69.7%.
Clarity on Swiss Private Banks
  • Although significantly lower in 2022, median NNM growth was still relatively strong. This was driven by small banks, which achieved record high median NNM growth of 5.4% - much more than at the medium-sized (0.6%) and the Big 8 banks (1.6%).
  • Median NNM growth fell in all regions, though Swiss-German banks performed best at 4.8% compared to 1.4% in French-speaking Switzerland and 0.8% in the Italian speaking part of the country.
Clarity on Swiss Private Banks
  • The high levels of volatility were driven by financial market developments.
  • Only 23% of banks saw AuM improve. All secured strong NNM and relatively good AuM performances compared to the market.
Clarity on Swiss Private Banks
  • A sharp rise in interest rates caused the net interest income margin to double, returning to pre-financial crisis level of 18bps in 2007 and 19bps in 2008.
  • Banks benefited from interest income from the higher interest rates, while payments on clients' deposits remained low.
Clarity on Swiss Private Banks
  • The median operating income margin was stable as banks benefited from interest rate hikes that more than offset the reduction in commission income. The median of strong banks rose by 9bps, causing all clusters to be aligned at around 80bps.
  • There was a significant change in the operating income mix as interest income grew by seven percentage points to 20.5%.
Clarity on Swiss Private Banks
  • More than half of banks saw costs per FTE rise, as employees benefited from a record-high median compensation per FTE.
  • The difference between banks based in Italian-speaking Switzerland (TCHF165) and the French and German-speaking parts (TCHF 265) was stark.
Clarity on Swiss Private Banks
  • Median operating income per FTE hit a new high at CHF493k. Strong and upper-mid banks are significantly more efficient than lower-mid and weak banks. The gap between them grew in 2022.
  • Different business and operating models have led to a continued increase in efficiency differences over the past few years. 

Study: Clarity on Swiss Private Banks

Read about the latest developments in the Swiss private banking industry.

Study: Clarity on Swiss Private Banks