That changes with the new UBS Monster Bank

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The takeover of CS by UBS seems necessary to save the Swiss financial centre. However, forced marriage raises many questions. What are the effects of the new monster bank on Swiss small savers, pension fund buyers and mortgage holders?

“Conditions are already bad for small savers at big banks,” says consumer protection director Sara Stalder, 56. “Now they’re getting worse.” Additionally, the monster bank raises the risk of the government having to intervene with tax money again.

According to Dirk Renkert (58), a finance expert at the Comparis comparison service, account holders and savers don’t have to worry too much about drastically rising fees. “The big bank is already in strong competition with the cantonal banks Raiffeisen and Postfinance,” says the expert.

What it means: The new monster bank is unlikely to afford to raise wages. Because then more customers will enter the competition.

On the other hand, it may become more difficult for companies to apply for a loan. “It’s getting harder and harder to negotiate and negotiate,” Renkert explains. “I can’t imagine Swiss SMEs wanting to go to foreign banks.”

ZKB also wants a piece

As for pension funds, Renkert doesn’t see a big change for buyers. With the forced marriage of two big banks, money from pension funds is distributed to fewer banks. However, this will lead pension funds to make new tenders when authorizing. “This could put pressure on prices again,” says Renkert.

“Foreign providers like Blackrock may now be gaining ground in asset management,” Renkert says. As a result, Swiss pension funds will have more foreign providers managing them. Big investors like Publica are already doing this.

Broad-based mortgage market

There are also many players in the mortgage market. “This market is very large in Switzerland,” Renkert says. Mortgage interest rates are determined by the general level of interest rates, banks’ refinancing options, and the margins banks receive. “With so many players, the margin on UBS is unlikely to increase because of its new size,” says Renkert.

Martin Tschopp, director of the comparison service Moneypark, does not see any major changes in the competitive situation. “The market shares of the two big banks have dropped to 25 percent in total in recent years,” he says. At the same time, the mortgage market is growing at a rate of 3 to 4 percent per year.

Moneypark alone works with more than 100 financing partners. “If someone has very high interest rates or sets very restrictive conditions, they quickly go off the grid,” explains Tschopp. This also applies to monster banks.

Source :Blick