For a long time, UBS was an unavoidable presence in Swiss corporate banking. Back then, the major bank was still known as Swiss Bank Corporation, and offering corporate loans was its unique selling proposition (USP). This was during the era of Robert Holzach.

Today, others are in charge at UBS. While corporate banking remains a priority, international wealth management has become far more lucrative.

Painful market shakeout

This will not change with the integration of Credit Suisse (CS). In recent years, UBS's former rival had become the go-to bank for countless Swiss companies. However, it has emerged that CS was often too accommodating with its pricing in order to retain corporate clients and avoid losing market share.

Now, UBS is the new point of contact for these clients, and the bank is sometimes forced to raise prices significantly. Even the leadership of the combined bank, headed by CEO Sergio Ermotti, does not deny this. Although UBS reported a 42 percent increase in risk costs for SME loans in its half-year results, this does not mean that the interest rate hike for the affected companies will rise by the same amount. Loan prices depend on the macroeconomic environment, such as interest rate developments and regulatory costs, which are currently moving primarily in one direction: upward.

Raiffeisen, Zürcher Kantonalbank...

A painful market shakeout is underway for many companies. One beneficiary of this is Raiffeisen. The cooperative bank now earns one in every five francs from its corporate banking business, as evidenced by the figures presented on Wednesday. This is also reflected in the loan volume, which for the first time surpassed the 50 billion franc mark as of the end of June this year. Raiffeisen has skillfully positioned itself in the market, now offering capital market services, foreign exchange trading, and custody services in addition to loans and leasing.

Alongside Raiffeisen, Zürcher Kantonalbank is also attempting to capture a share of the market. Thanks to its position, it has the necessary resources to do so.

However, this should not obscure the fact that the corporate banking market is not homogeneous. For large, international players, a major bank will continue to be the first choice. In addition to UBS, the two German institutions Commerzbank and Deutsche Bank, as well as the two French representatives Société Générale and BNP Paribas, are likely to see opportunities.

The cards are being reshuffled in corporate banking. It remains uncertain whether there will once again be a dominant player like CS in this area. Just as in wealth management, diversification is key here as well. There must not be another «Credit Suisse» case. This also means that it would be desirable to avoid any significant dependency on a single bank in the Swiss corporate banking sector in the future.