The Alternative Bank of Switzerland (ABS) has gone from strength to strength since it was founded 10 years ago. Confounding its critics, the bank has managed to pull in customers and make profits while holding fast to its founding principles.
Formed in 1991 by a group of like-minded people, the ABS then attracted the financial support of such organisations as the World Wide Fund for Nature (Switzerland) and other socially responsible groups.
The deputy chief executive of the ABS, Claudia Nielson, told swissinfo that business had grown tremendously in the past two or three years, both financially and in terms of personnel.
Assets under management were up seven per cent in 2000 over the previous year and stood at SFr443 million ($256 million) - that compares to just SFr57 million in the bank's first year of business. Profits were also up, coming in at just over SFr203,563, nearly double what the bank made in 1999.
However, as can be imagined from its name, there is more to the Alternative Bank than simply making money. In fact, when it started operations a decade ago, its aim was to stand apart from the existing banks in Switzerland.
"The goal of the ABS was to be a lot more transparent than the other banks in Switzerland," explained Nielson. "And we are alternative in the way that we have strong ethical guidelines."
Everything the ABS does has to be weighed up against a strict set of principles and these are carried through to every level of the business.
"If someone asks for a loan with our bank, the purpose of the loan is examined very closely," said Nielson. "It has to environmentally friendly and socially sustainable. If it doesn't cause any harm or even better improves matters, then it will be given."
"Whatever your ethics, unless a bank does its job, it's not going to attract customers and all too often the benchmark for that level of service is the major high street banks such as UBS and Credit Suisse," she added.
This is an area in which the ABS has improved its services to include not only bank accounts, but also ATM cards, loans and mortgages, she told swissinfo.
The only area she admits to shortcomings is in the field of Internet banking and of international money transfers that can cost a little more than in the high street.
Part of the bank's growth plan has been to look at new ventures which to a certain extent involve working with conventional banks.
"We want to sell, in cooperation with other banks, ecologically or ethically -oriented funds and we are currently checking the different funds and different ways of cooperating with other banks," explained Nielson.
These funds will have another dimension because the ABS promises to tell customers just how much they are paying for the advice given when investing in a fund. Normally, these charges are hidden when you go through the other major banks.
The Alternative Bank works as a limited company. However, shareholders are limited in the size of their shareholdings, preventing any big player coming in and trying to take over.
The rules governing the bank go further than that because the Swiss banking regulatory authority has limited the ABS, due to its small size, to work solely within Switzerland.
Although the bank is not complaining about this situation, it means that links with other alternative financial groups across Europe are rather limited.
Perhaps the most radical break the ABS makes from the usual business pattern comes when Claudia Nielson talks about the bank's future. She warns people not expect growth for growth's sake.
"We have grown very strongly over the past few years which is a strain on reserves and our personnel, so we have to come back to a slower pace of growth," said Nielson. "I know this isn't very usual for a bank to speak this way but here we think of ourselves as an alternative and we don't want to rush along too quickly and take too big risks."
Many people in 1991 expected the ABS to fold up and simply fade. Ten years later, the bank has attracted 16,500 customers who use its services.
Progress may be slow for the Alternative Bank compared to its bigger rivals but most people would now admit that it has established itself as a force to be reckoned with.
by Tom O'Brien