Retail & Commercial Banking
The Swiss retail and commercial banking market is very fragmented. However, it is dominated by a couple of countrywide or regionally active players, such as the two big universal banks, the Raiffeisen group, the larger cantonal banks, but also PostFinance. Despite various attempts to diversify their revenue streams into commission-earning service models, most retail banks are still heavily dependent on the interest margin business. The product and service offerings are very similar whilst differentiating strategies are rather rare. The onshore business has seen very robust financial metrics over the last years, despite negative interest rates. We currently see the following main M&A trends:
- Hardly any M&A activities, except for occasional portfolio alignments, i.e. disposals of private banking subsidiaries or add-on acquisitions in the asset management and, lately, in the fintech space.
- The impact of digitalisation, the market entry of new, differentiating players or a sharp rise in the interest rates might trigger a consolidation in this very fragmented market.
- Balance sheet management, the alignment of on-site and virtual client service models as well as the search for further diversification of revenue streams are the main points on the managements’ agendas.