Martin Schilling: «The Redistribution of CS Funds is Yet to Come»

In an interview with finews.tv, Martin Schilling forecasts that Switzerland will see the number of private banks halve within the next decade. He also predicts that, over the next two years, a significant portion of former Credit Suisse clients’ assets will migrate from UBS to other banks, as the PwC Switzerland banking expert explains.

In 2010, there were around 160 private banks in Switzerland; now there are just under 100. «It can be assumed that about five significant transactions take place each year,» says Martin Schilling, a banking expert at PwC Switzerland.

In light of this, he anticipates that within a few years, the number of wealth management banks will dwindle to around 60, as he further notes in the interview with finews.tv.

There is no real wave of consolidation, but rather the number of banks has been steadily decreasing over the years, Schilling adds. The reasons are diverse, including stricter regulations, rising IT costs, and the increasing effort required for digitalization. These increased expenses erode profit margins.

However, the PwC banking expert is cautious about setting a minimum size of assets under management as a criterion for a bank's viability.

Combining Tradition and Modernity

«There are plenty of examples of very small financial institutions with less than 5 billion francs in client assets that are highly profitable," Schilling emphasizes. "What matters is the bank's business model and its target clientele.»

In this context, the PwC advisor also does not believe that wealth management will only be conducted through digital channels in the future. «There will always be a need for client advisors, not least to advise clients on digital wealth management or investments in private equity. The future of banking will be a combination of tradition and modernity,» Schilling summarizes the banking world of tomorrow.

Redistribution of CS Funds in One to Two Years

Schilling acknowledges that growth dynamics in other financial centers like Singapore or Dubai are significantly higher than in Switzerland. However, new wealth continues to be generated in Switzerland, driven by the influx of affluent entrepreneurs from abroad and the country’s strong economic performance. As a result, there hasn’t been a significant outflow of funds, even in light of the sanctions against Russia.

The exact destination of Credit Suisse clients’ assets will only become clear in the next two to three years, Schilling notes in the interview. He explains that the current observation period is too short to draw definitive conclusions. "Many former Credit Suisse clients are initially moving their assets to UBS and adopting a wait-and-see approach. A broader redistribution to other banks is likely to begin only after one or two years," the PwC banking expert asserts.