Geneva cantonal bank's head said recently that only about five Swiss cantonal banks would survive in the country. Do you share this view, Kuno Kennel?

I don’t believe it, though the possibility can’t be excluded. For Schwyzer Kantonalbank the language barrier remains our biggest hurdle and so the German-speaking market will be key for our planned expansion over the 2019-2022 strategy period. With reference to U.S. President Donald Trump, we say: Schwyz first. We’ll keep our options open for the rest of Switzerland. We have been running our online portal e-hypo.ch, offering online mortgages, for the past four years and we will continue to develop our digital business.

Other cantonal banks are doing the same. Will this be enough to achieve your goals?

We plan to expand corporate business through our existing contacts with companies in German-speaking Switzerland. We continue to hire advisers in our asset management, and our institutional investor business is developing nicely, albeit from a low basis.

«No offices outside of Schwyz»

These will be based mainly in Zurich, Zug and Pfaeffikon, but also in Basel und Lucerne. But what we won’t do...

…is what?

We certainly won’t be opening offices outside of the canton. 

That has been an unwritten rule among cantonal banks up to now. However the Basler Kantonalbank has expanded across Switzerland through its takeover of Bank Cler, and the Geneva cantonal bank wants to expand into Lausanne and Basel. Why this focus on the national market?

I believe digitalization is the main driver for this development. The internet doesn’t recognize cantonal boundaries. This justifies the push across cantonal borders and now accounts for more than a fifth of our business. This is probably the same for other regional banks, but nobody talks about it. And given the low interest-rate environment we need to explore other opportunities.

Why so?

We’ve long enjoyed good growth in the canton thanks to the low tax rates, but this development has now peaked.

«We are not fishing in the other cantonal banks’ pond»

Our 2017 growth in the mortgage sector was only 1.7 percent, compared with a Swiss average of 2.7 percent. We need at least 3 percent growth in our interest-rate business to achieve stable profits. This means we have to look beyond our cantonal borders.