Postfinance should compete with the megabank: That is the wish of Cédric Wermuth, Co-President of SP Switzerland.
Photo: Peter Klaunzer (Keystone)
The new mega bank is scary. The XXL institute made up of UBS and Credit Suisse is too big for Switzerland and it distorts competition. Cédric Wermuth’s idea seems plausible at first glance: Switzerland as an economy must become more independent of UBS. You should therefore expand Postfinance to become a Swiss cantonal bank, “to become an SME bank – with a public state guarantee”. The co-president of the SP told CH Media.
The idea has supporters not only in left-wing parties. Opposite the “SonntagsZeitung”, Central President Gerhard Pfister hinted that Postfinance could play a role in avoiding UBS’s monopoly position. The lending ban for Postfinance is to be lifted and, with the state behind it, it is to grow into genuine competition for the new megabank.
In which area will the merger of UBS and Credit Suisse reduce competition? Small customers hardly suffer from the loss of Credit Suisse. When it comes to mortgages or savings accounts, there are numerous competitors. There is another problem here: Despite the many providers, there has long been criticism that they do not really hurt themselves. For example, when it comes to passing on rising interest rates to savers. (Read more here)
The concern is greater for companies that do business abroad. When it comes to trade financing, UBS and, to date, Credit Suisse have been the first point of contact. Only the second largest bank will soon be gone.
Postfinance would take years
Could Postfinance close this gap? She has been weeping for an end to the credit ban for years; she wouldn’t be able to do it anytime soon. She doesn’t have the skills to do that now. Anyone who asks around in the financial sector will not get any reliable information on how long Postbank would need to do this. However, it can be assumed that it would take months, if not years, to set up a suitable team.
Should Postfinance simply recruit a team for this, it would probably have to break its wage structure.
That could be expensive. Should Postfinance simply recruit a team for this, it would probably have to break its wage structure. Because compared to most other banks, the yellow bank pays modest wages: an average wage of CHF 115,000 per head. Only in comparison to the Zürcher Kantonalbank does it have a disadvantage here. This pays an average of more than 220,000 francs per person.
Now it can be argued that bankers earn too much anyway. The economist Adriel Jost adds that banks should actually be viewed as state-owned companies that operate the money and financial infrastructure on behalf of the federal government. If they get into trouble, they have to be rescued by the federal government accordingly. Banks should therefore be treated like other state-related companies when it comes to executive wages. Or in short: Bankers are actually state employees, which is why they should be paid as such.
But this is about a business area in which there is international competition and in which appropriate wages are paid. Deutsche Bank, the British HSBC and the French BNP Paribas have all been active in Switzerland for a long time. They will also be the first to benefit from the loss of Credit Suisse.
The strong lobbying of the cantonal banks
It is also certain that many commoners would object to relaxing Postfinance’s lending ban. The lobby of the cantonal banks in the Council of States is strong.
They have good arguments for that. The partial privatization of Postfinance was only buried last year. At that time, politicians decided that the basic service mandate of the postal service had to be clarified first. So, what should Swiss Post actually do and what not. Only then does the question of privatization come up and whether it should be allowed to grant loans. That will take years.
The Zürcher or the Waadtländer Kantonalbank are well positioned to benefit from the end of Credit Suisse.
The cantonal banks will use this time. The Zürcher or the Waadtländer Kantonalbank are well positioned to benefit from the end of Credit Suisse. On Friday, the Zürcher Kantonalbank published one on its website blog entry with the meaningful title: “We are the Swiss alternative for corporate customers.” The message: Dear unsettled Credit Suisse customers, we’re already in business today.
Does Postfinance have to stand by and do nothing? No, she doesn’t have to. Loans or mortgages can already be obtained from the bank today. However, it does not assign these itself, but arranges them through partner companies.
This model would probably also be conceivable in other business areas – only then it is not the state that grants loans, but a private company.
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– Postfinance is the wrong company to compete with the megabank
The left wants to use the merger of UBS and Credit Suisse to relax Postfinance’s lending ban. This idea has not only many enemies, but also many disadvantages.