Swiss private banks are also benefiting from the changes in the interest rate environment. Smaller institutions in particular were able to significantly improve their earnings in the first half of the year thanks to strong interest business, as a study by the consulting firm KPMG shows.
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According to the half-year analysis by KPMG, there is a significant shift in the income structure of private banks in Switzerland away from commission business and towards interest business. This is particularly clear among small institutions: for these, the share of interest income in total income was 41% in the first half of 2023, after it was 24% in 2021.
The share of the traditionally more important commission business was also 41% compared to 58% in 2021.
In addition, according to the study, smaller private banks in particular benefited from an increase in trading income in the current year. This was primarily due to increased foreign exchange transactions as customers sought to benefit from higher US dollar interest rates, according to KPMG.
The medium-sized and large private banks also increased the share of interest income in their total income, but to a lesser extent than the small institutions.
According to the analysis, interest business accounted for around a third (2021: 16%) of income at medium-sized banks in the first half of 2023 and around a quarter (2021: 13%) at large institutions.
The bottom line is that 2023 has been extremely positive so far, especially for the small private banks. Your gross profit has already almost reached the level of the full year 2022. According to the study, the return on equity of small institutions was 10.7% in the first half of the year compared to 3.9% last year.
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