A stagnant home market and declining prospects in western Europe have encouraged Swiss wealth managers to expand in emerging markets. But the strategy for success is not always straightforward, and now a number of regional players have come to the fore looking to challenge Swiss dominance in this field.
Contingent capital is still the subject of furious debate. Some have called it a dangerous instrument, while others say it may not do what regulators want. Some argue that it will be difficult to create a market big enough to absorb the needs of the banking sector if it becomes a compulsory part of the capital structure. But none of this stopped Credit Suisse's $2bn issue from being a storming success.
The other axis on which the fortunes of the two rivals have recently pivoted has been the quiet world of Swiss private banking. In 2004, private banking and wealth management contributed 38% of UBS’s pre-tax profits, almost matching the 40% from the investment bank. At Credit Suisse, the proportion is even higher, with the private bank alone accounting for 42% of the group’s net income last year.
chairman and CEO, wealth management and business banking, UBS “Meteoric rise” would be an appropriate phrase to describe Marcel Rohner’s ascent to the group executive board of Swiss giant UBS. At 40, the demure Swiss economist appears the type of Swiss banker that people would not hesitate to entrust with the family fortune.