Zurich cantonal bank joins the big league

Zurich Kantonalbank looks to spread its wings Keystone Archive

Unlike its counterparts in Switzerland, Zurich Kantonalbank is expanding its reach far beyond the local market. It's the third biggest bank in Switzerland after UBS and Credit Suisse and has aspirations to become a national and even global player.

The ZKB had a very impressive millennium year, revealing its best set of results since it was founded 130 years ago. Gross profit jumped 12 per cent to SFr751 million ($457 million), with net profit up 45 per cent.

The bank, which is more than double the size of its nearest cantonal rival, said the strong economy and above average growth had contributed to making last year such a success.

Cantonal banks are traditionally seen as local players, focusing on home and business loans for local residents. However, the ZKB has been working hard to expand expanding both its services and geographical scope.

“We are moving more towards the asset management and investment counselling business, and also increasing our international activities,” ZKB board member Hans Fischer told swissinfo.

While its local business remains an important market for the ZKB, the bank is now the number one player in the Swiss derivatives market, handling 30 per cent of all transactions.

The bank’s record in the asset management field has also been impressive – it won the Standard and Poor Investment Performance Award for 2001.

“We are managing SFr1 billion for the Swiss National Pension Fund,” Fischer explained. “We didn’t win this award because of one lucky day; it’s because of many years of professional work.”

Last year, the ZKB increased its workforce by 200 staff, and it is now in talks with its cantonal banking counterpart in canton St Gallen about closer co-operation.

The group has also opened an offshore banking arm in the Channel Island of Guernsey.

In the case of ZKB, the word cantonal already seems a misnomer.

by Tom O’Brien