Moreover,
Zero rate policy switzerland: increased:
Swiss banks could soon seek new ways to compensate for the drop in their credit margins. For example, following the introduction by the Swiss National Bank (END) from a score rate. Consequently, According to analysts, this could increase the cost of certain banking services and certain types of credit for customers.
The decision made in June by the BNS to bring back its key rate to zero has made Switzerland the country displaying the lowest borrowing costs among large economies. Similarly, well below the deposit rate of 2.0 % set by the neighboring European central bank, for example.
After two drop drops this year. Furthermore, Swiss banks could see their net interest income decrease by around 660 million Swiss francs ($ 830 million) in 2024, estimates Daniel Geissmann, from Zeb bank consulting firm. Nevertheless, Banks generated around 20 billion francs thanks to zero rate policy switzerland: increased this activity in 2024.
“Zero interest rates represent the worst scenario for banks,” analyzes Geissmann. Furthermore, “Banks are losing because they cannot repercuss the drop in levels on deposits. Therefore, »»
During the previous period of rate close to 0 % – between 2011 and 2015 – the net interest of Swiss banks increased from 1.4 % to 1.1 %, which had weighed on their profitability, according to BNS data.
Geissmann estimates that the banks had then lost nearly 4 billion francs between 2011. 2014, but he specifies that the impact should be less marked this time, because the starting margins are already lower.
Little enclosures to bring this cost to their customers via negative levels on deposits. banks will have to find other sources of income to preserve their profitability.
Martin Hess. chief economist of the Swiss Banker Association (ASB), estimates that credit could become more expensive, banks that zero rate policy switzerland: increased should resort to more expensive funding, such as capital market instruments, replacing deposits.
“In the end. it is the real economy and the customers who will pay it,” he said, notably evoking a possible increase in the cost of mortgages.
REAL ESTATE
Ultra-basage rates tend to stimulate real estate demand: between 2011. 2015, residential real estate prices in Switzerland jumped 15 %, three times faster than between 2000 and 2005, according to BNS figures.
“This has increased the risks of overvaluation. correction on the real estate market, even if this did not occur during the previous cycle,” observes Gianluigi Mandruzzato, economist at EFG Bank.
“However, these risks could reappear. »»
The situation is also delicate for insurers. pension funds, which struggle to generate sufficient yields to honor their commitments, while bond revenues plunge, he adds.
Maxime Botteron. an economist at UBS, believes that banks could also be more reluctant to lend zero rate policy switzerland: increased if the rate curve was flat out or reversed, with zero rates.
The scholarship is also not spared by the impact of zero BNS rates. With official rates much lower than that of other European. North American central banks, the Swiss banking values listed already underperform their foreign counterparts.
UBS’s actions, which faces increased capital requirements after the repurchase of Credit Suisse in 2023, only increased by 2.2 % in 2025, while those of Julius Baer retreate 6.7 % while the new management tries to turn the page of a series of recent setbacks.
By way of comparison, the Stoxx index of European banks jumped 29.3 % this year, highlighting the Swiss underperformance.
Savings and credit banks are the most exposed to the erosion of credit margins.
Establishments like Raiffeisen. Valiant, specialized in the collection of deposits and the granting of mortgages, derive more than 70 % of their income zero rate policy switzerland: increased from the activity of interest, according to their figures.
Fortune. asset managers such as Julius Baer and Vontobel, of which only 10 % of income comes from interest, are less affected. Diversified banks like UBS (15 %) and ZKB (54 %) are between the two.
Andreas Venditti. bank analyst at Vontobel, believes that the extent of the impact of zero rates will depend above all on the duration during which they will remain in force.
“The problem worsened if the rates remain at zero over a long period,” he explains. “The margins of interest are much higher in Europe and especially in the United States. »»
(1 $ = 0.7966 Swiss franc)
Zero rate policy switzerland: increased
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