No surprises for finding out that UBS and Credit Suisse were the two biggest Swiss banks in terms of private banking-related operating income in 2016.
UBS routinely comes out top in global private banking/private wealth management rankings based on assets under management and Credit Suisse, although much smaller, invariably makes the Top 10.
Both banks dominate their Swiss peers by a huge margins.
UBS generated CHF 15,073 from UBS Wealth Management and UBS Wealth Management Americas. This is 78.40 percent greater than the CHF 8,449 million of revenues generated by Credit Suisse’s.
Together the two banks accounted for CHF 23,572 million, or 67.4 percent of the CHF 34,960 million earned by twelve of Switzerland’s leading wealth managers, according to a private database currently being constructed.
This probably understates UBS and Credit Suisse’s dominance as the operating income generated by the other eight institutions is not just confined to private banking and wealth management-related activities.
Instead it encapsulates all of their activities. And some institutions, such as Pictet Group and Lombard Odier have significant institutional asset management and global custody or asset servicing businesses.
Nonetheless some of the other constituents of the ranking are still significant institutions, especially relative to their UK peers.
By way of comparison Julius Baer, Pictet, Lombard Odier and UBP all generated more revenue than the private banking activities of Royal Bank of Scotland (RBS) during 2016. And in the case of Julius Baer and Pictet they outperformed on this metric by a significant margin.
The ranking also illustrates the size in terms of earning power of Pictet and Lombard Odier, two Geneva-based former private partnership banks with unlimited liability. It was not until both institutions changed their corporate status in 2014 to become corporate partnerships that they published full accounting data.
All the other constituents of the ranking have extensive operations outside of Switzerland and have extended their international reach through acquisition. Indeed both UBP and EFG International are in the course of digesting significant acquisitions (Coutts International for UBP and BSSI for EFG International).
Nonetheless, size as represented by operating income does diminish rapidly.
Table 1: Top 10 Swiss Private Banks By Operating Income in 2016 (CHF million)
2.Credit Suisse, 8,449
3.Bank Julius Baer, 2,852
4.Pictet Group, 1,991
7.Lombard Odier, 1,039
9.Bank J. Safra Sarasin, 724
10.EFG International, 722
11.Banque Edmond de Rothschild, 598
Source: Annual reports and accounts and Ian Orton.
UBS data consists of the results for UBS Wealth Management and UBS Wealth Management Americas. Credit Suisse data encapsulates the private revenues of the Swiss Universal Bank, International Wealth Management (IWM) and Asia Pacific.
All other data consists group operating income.
The ranking is provisional and may be adjusted and refined as further data becomes available.