List of Swiss banks and credit ratings in 2024

Switzerland’s banking system has long been recognized as one of the most reliable and stable in the world. However, significant changes occurred in the spring of 2023, impacting the landscape of Swiss banking. The country’s two major banks, UBS and Credit Suisse AG, underwent a major shift, with UBS planning to acquire Credit Suisse for a substantial $3 billion to prevent a global crisis. This acquisition might not eliminate the Credit Suisse brand but will undoubtedly increase UBS’s assets significantly.

Swiss National Bank and Major Banks

The Swiss National Bank stands at the center of Switzerland’s financial system, responsible for issuing Swiss francs and developing the country’s monetary policy. Besides this central institution, Switzerland is home to other significant banks, which can be categorized as domestically significant and those with substantial assets and both domestic and international presence.

Key Banks in Switzerland

Switzerland’s banking sector includes some crucial internal banks that play a significant role in the domestic market. These include Zurich Cantonal Bank, Raiffeisen, PostFinance, and Banque Cantonale Vaudoise. Additionally, banks like Julius Baer Group, Lombard Odier, Vontobel, EFG International, and Pictet Group have a considerable presence both domestically and internationally. As of end of 2023 ( same as begining of 2024), there are 237 banks operating in Switzerland, ranging from international banks to cantonal banks and many private banks owned by families for generations

List of the banks in Switzerland as of 1.01. 2024

This list represents a portion of the diverse and extensive banking sector in Switzerland. The complete list of 237 banks as of June 1, 2023, includes a wide range of banks from different categories, providing a glimpse into the vastness and diversity of the Swiss banking system.

The 25 largest banks in Switzerland by asset size as of 01.01.2023.

Understanding Credit Ratings in the Swiss Banking System

A credit rating is an evaluation of the credit risk associated with a bank’s ability to repay, including an implicit forecast of the likelihood of default. The highest rating is AAA or Aaa, while an investment rating below BBB- is considered speculative. Securities with investment ratings are typically accepted as collateral. A credit rating is an estimate made by a credit rating agency. The estimate is based on both qualitative and quantitative information about a potential borrower. This information includes data provided by the borrower and non-public information obtained by the credit rating agency’s analysts.

Different agencies use different designations. For example:

Unveiling the Process of Bank Credit Rating Assignment

In finance, leading rating agencies play a crucial role. They determine banks’ credit ratings using established criteria. These criteria assess a bank’s financial reliability and stability. Though methodologies differ slightly, common approaches exist for analyzing a bank’s credit rating.

Deciphering Financial Indicators: The Foundation of Credit Ratings

The evaluation process starts with analyzing a bank’s financial metrics. Agencies focus on a bank’s revenue, assets, profitability, debt, liquidity, and capitalization. These indicators shed light on the bank’s financial health and stability.

Risk Assessment in Assets: A Key Determinant in Rating

Next, asset risk evaluation is crucial. Analysts rigorously assess the bank’s loans, investments, and other assets. They look at quality, structure, and risks. Banks with diverse, high-quality assets are seen as more stable.

The Importance of Effective Risk Management

Risk management is also vital. Agencies examine the bank’s risk management strategies, evaluation methods, and regulatory compliance. Banks with strong risk management often receive higher ratings.

Market Reputation and Stability: A Reflection of Trust

Analysts also consider a bank’s market reputation and stability. They look at historical performance, market presence, and crisis responses. Client and partner relationships reflect the bank’s trust and support levels.

The Role of Macroeconomic Context in Credit Ratings

Finally, analysts incorporate macroeconomic factors. They analyze economic conditions, inflation, unemployment, interest rates, and national financial stability. This shows how external factors affect banks.

Each agency has its methodology, tailored to banking sector specifics. Despite different algorithms, common principles guide these methodologies. These include financial indicators, asset risk, risk management, reputation, stability, and macroeconomic context. This thorough approach aids investors and creditors in making informed decisions.

Credit Ratings of Banks in Switzerland and Liechtenstein

Our compilation of long-term credit ratings encompasses banks from Switzerland and Liechtenstein, particularly noting that some of these institutions also operate in Switzerland through their subsidiary banks. It’s important to understand that not all banks in these countries possess credit ratings. The need for such ratings commonly arises for activities like borrowing funds through bond issuance or engaging with governmental entities.

Credit rating of Swiss banks as of 1st january 2024

The Global Influence of Swiss Banks

Swiss banks have a substantial global influence due to their significant international presence, assets under management, and reputation for privacy and stability. This global reach is not only important for Switzerland’s economy but also plays a key role in the international financial system.

Conclusion

Switzerland’s banking system, with its blend of traditional stability and modern financial services, continues to be a pivotal part of the global financial landscape. The consolidation within the banking sector, exemplified by the UBS and Credit Suisse merger, and the diverse range of banks present in the country, demonstrate the dynamic nature of this financial powerhouse.