Best Swiss Private Banks (2023) – Swiss Private Banking

1. Explanation – A few important Words you should read

According to the official Swiss private bank list of the Swiss Financial Market Supervisory Authority (, FINMA) there are 296 authorized banks and securities dealers in Switzerland (June 2018). This official list is of little help to a foreign client looking for the best private bank in Switzerland for a bank account opening. All types of banks and securities dealers in Switzerland are listed on the FINMA list of banks.

Many people are searching for the top 10 private banks. A potential foreign private client of a Swiss bank who is looking for the best private bank to invest his money in Switzerland and protect the assets needs a working tool in the form of a list with key figures of all private banks. He needs important indicators, criteria and key figures that make it possible to assess the soundness and creditworthiness of the private bank of his choice. He should be able to get a first overview and make a first judgement on a specific bank of his choice and that choice not only among the top 10 private banks but all banks offering offshore private banking services in Switzerland.
[Such a working tool does not exist on the Internet until today.]

Caputo & Partners is a specialized boutique law firm dedicated to advising high net worth individuals, HNWI. We advise foreign private clients of Swiss banks (including those who want to become one) in all matters relating to private banking.

We are the leading asset protection boutique law firm in Switzerland with a proven track record.

I had a fantastic consultation with the Caputo brothers. They gave me expert advice on asset management, banking strategies, and wealth management. The session was really insightful, covering everything from investment returns and fee structures to why external asset managers can be a better choice. I really appreciated their honest and transparent approach, pointing out the conflicts of interest in traditional banking and offering practical solutions for better financial management. Their knowledge is pretty impressive, to say the least :) Highly recommend!
Today, I had the distinct pleasure of speaking with the senior partner and council for the firm, Enzo Caputo.We spoke about a number of issues involving wealth Management, diversification of assets, diversifying fund composition, and the survivability of wealth in family office planning.Of course, dealing with a solicitor is not the same thing as dealing with an asset manager. Lawyers are required as a matter of ethics to only make suggestions to clients which in their view is beneficial to the client, and not self-serving.These types of ethical considerations do not exist with real estate agents, fund managers, Banks, financial institutions or other agents. So it was quite refreshing to hear Mr Caputo's analysis on fund diversification.We also spoke at length about the security of Swiss banks, and how the government protects investors and depositors in case of Bank defaults.We also spoke at length about relocation to different countries, and he provided me his honest opinion on the various jurisdictions that were available including the pros and cons of each jurisdiction.This is a completely unsolicited review. On the basis of full disclosure, I have not been paid, or otherwise compensated for making this review other than the fact that I was invited to write this review if I so chose.
Habe meinen ersten Anruf in der Kanzlei getätigt und direkt von Herrn Caputo eine kostenfreie erste Kurzberatung -ohne Schnickschnack- zum Thema privater Kontoeröffnung und Empfehlungen zu Steuerprofis aus seinem Netzwerk bekommen. Klar, freundlich und kompetent, so wie man es sich wünscht. Im Bedarsfall sehr zu empfehlen!
Mr Caputo knowledge of the Swiss system helped me to quickly identify the best solution suitable to my needs! Highly reccomended!
Wir waren heute bei Herr Caputo und sein Partner Roberto, Top professionale Beratung !!!Es wird alles gründlich erzählt, nimmt viel zeit. Top Profissionele Beratung !!
Herr Enzo Caputo hat mich sehr gut und kompetent beraten. Seine fundierten Kenntnisse und sein professionelles Auftreten haben mir das Vertrauen gegeben, dass ich die richtige Entscheidung treffe. Er nahm sich ausreichend Zeit, um meine Fragen umfassend zu beantworten und ging auf meine individuellen Bedürfnisse ein. Die Beratung war nicht nur informativ, sondern auch angenehm, da Herr Caputo eine freundliche und zugängliche Art an den Tag legte. Seine Expertise hat mir geholfen, die bestmögliche Lösung für meine Anliegen zu finden. Ich kann Herrn Caputo uneingeschränkt weiterempfehlen und bin mit seiner Dienstleistung äusserst zufrieden. Vielen Dank für die exzellente Beratung!
We have contacted Caputo & Partners AG when we needed a legal advise on a quite unusual matter.Mr Enzo Caputo kindly provided us with a very comprehensive response which really helped us in outlining our point of view.
Dear Enzo,dear Alessandro,Hope all is well.We got our bank account thanks to you and we would like to thank you a lot for that.It was a long process to complete the Know Your Customer enquiry and convince the bank that our net worth was legit.We hope to have you on our side if,later on,some problem show up with that relation.You are doing a great job and we will recommend you to anybody looking to open an account or solving a problem with a bank.Thanking you again.All the best.Albert
Habe Herrn Caputo, als zuverlässigen, Kompetenten und aufrechten Geschäftsmann kennen gelernt. Weiter so !!!
I miei genitori avevano un conto in Svizzera. L' avvocato Caputo ha accompagnato le complesse procedure di diritto internazionale. Ha condotto le trattative con la banca svizzera. Non dare mandato a Caputo per problemi con banche svizzere é un errore grave. Posso solo raccomandare lo studio Caputo & Partners di Zurigo.
I have been touch base with Mr. Caputo recently and I have been very surprised how keen this person was to answer my questions and give good advice without asking nothing in return, to be noted that Enzo was just recovery from a surgery can you imagine what this person can do in a normal day life?Bravo!!!
Excellent, fast, reliable , honest, human and spot on professional - Bravo - 5 stars 🌟🌟🌟🌟🌟👏
Ho sentito l'avvocato Caputo telefonicamente, molto professionale e gentile.Mi ha dato ottimi consigli su come risolvere il problema
Highly recommendable. Friendly and competent advice for company and account opening in Switzerland - directly from the owner (no secretary or junior partner as usual)
Highly recommended! I had a bad case during the holidays where I couldn't contact with any lawyer, luckily when I called Mr. Caputo he picked up the phone right away and listened to my problem and explained the issues. Right after that he gave me his a cell phone number and remind me if there is a problem call him immediately. Thank you very much!
The company has a competent and personable owner. We were able to quickly familiarize ourseves into the topics. Thank you for the syphatic and professional consulting. Respectfully yours, C.J
Enzo Caputo has an ability to cut to the essentials of an issue extremely quickly. His advice is practically based, and skillful.His experience in the sector has been very helpful, and he is not afraid to tackle difficult problems.Enzo's approach has been professional, and he was able to provide help in pointing out the key factors for success. He has been a very helpful ally. Also, Alex's operational experience was invaluable. Setting up any financial relationship correctly to avoid conflicts of interest is absolutely crucial. These conflicts are not always aobvious. Caputo and Partners have some very useful knowledge.
Coming to Switzerland and dealing with the local banks as a foreigner is a challenging task. However, if you are equipped with a proper advice the task is certainly doable. If you are solely dealing with the Swiss banking system and frustrated, look no further – call Alex or Enzo. What I personally like about this firm is that it is a one stop shop. What I mean by that? Alex and Enzo provide a sound advice not only on legal issues you may have but also, they are well seasoned bankers and trained as tax advisors. All the common issues could be resolved in one office, I did not need to go to multiple firms, everything covered in house. By the way, your coffee shop suggestion made my day. Well brewed and tasty coffee. Thanks Alex and Enzo!
We have a problem at the bank. Mr Caputo managed to solve the problem with the Swiss bank and we received the money back after his intervention with the bank. He figured out all compliance issues with the Swiss bank. We are happy to recommend his law firm for any issues connected with a Swiss bank.Not hiring Caputo & Partners will be a mistake. The compliance issues are complex today. You really need to engage an expert like Mr Enzo Caputo.
I highly recommend this trust worthy professionals, who are always there for you when you need them. And Mr.Caputo is the professional, who gets you the results you wanted.
Enzo Caputo is extremely professional, clear, quick, analytic and precise in his response in English and German. Client was very impressed.
I can report the best about Mr. Caputo. When it comes to highly complex and international structures, he is the lawyer I trust. Clear in his statements and very helpful to illuminate all aspects accurately and in depth.
Sehr empfehlenswert! Herr Caputo hat uns persönlich sehr gut beraten und geholfen (nachdem uns zwei andere Anwälte sehr viel Geld gekostet hatten ohne Resultate und wir nicht mehr weiter wussten). Er half rasch, unkompliziert und kompetent. Vielen Dank, Herr Caputo!
Enzo was very helpful in answering my questions about citizenship and investments. He spent time with me going over the options of Italian citizenship as well as other EU countries and giving me guidance as to what would be the best for me economically. His knowledge of Swiss banks is very helpful as well and I will be looking forward to working with him in the future to finalize my investment plans. His website and YouTube channel are great resources as well. Thanks again, Enzo!
Ciao Enzo,we wanted to thank you again for your quick and professional support for our request.And as we have already told you personally, we have saved you in our database as the first address for all financial transactions that we will and want to carry out in Switzerland, even if it is only when we need professional advice, we will contact you primarily, as we have greatly appreciated your work.Thank you again for your quick, human and smooth support in our best regards Umberto
Ich hatte heute eine kurze und effektive telefonische Beratung von Firma Capito, und er war profi und konkret ! danke euch nochmals von Tip Top Immobilien
Außergewöhnlich: man bekommt Herrn Caputo direkt als richtigen Ansprechpartner ans Telefon!Kompetente Auskunft ohne Umschweife, kein "Mauern" oder "Taktieren", dass man erst etwas bezahlen oder ein Info-Produkt kaufen muss...Er hat mir direkt im ersten Telefonat einen wichtigen Tipp gegeben, der mir weiter hilft! Super, vielen Dank!
An exceptional firm with highly competent and knowledgeable professionals . Mr Caputo ‘s knowledge of the Swiss Tax system is second to none and I would recommend this firm highly .
I sent a doc thru an email and called Mr. Enzo for a verification. He verified immediately. His swift verification is truly valuable ! Thank you so much !!

2. Best Private Bank List (Swiss Private Banks 2023)

Dear Investor,

Please find all existing 102 Swiss Private Banks listed. According to our definition of Private Bank, we mean all Swiss Banks offering private banking services. If you are unfamiliar with the Swiss private banking industry, I recommend our “Private Banking Guide“.

So that you can understand how we rate the banks, you should read this page carefully. I have been especially careful to explain complex things with simple words. It is important to me that everybody can easily understand why certain key-figures and factors are so important. After all, it’s all about securing your money and increasing your wealth.

Whether you are dissatisfied with your previous private bank, looking for alternatives or simply looking for more global diversification, do not hesitate to call me.

We offer comprehensive and individual advice at the highest level for protecting your assets globally.

My promise to you:
“From 102 private banks, we will help you find the best private bank for you. A bank which can satisfy your needs and expectations.”


Enzo Caputo
CEO & Owner – Boutique Law Firm Caputo & Partners AG

Click on the Play Button (Red Play Button) to start the Video

️ ⬇️Content of the Video⬇️

00:00 Which bank is the safest for your money?
02:04 How to reduce inflation?
02:59 The US dollar has lost 50% of its value against the Swiss franc in the past 20 years
03:40 Which Swiss bank is best for foreigners?
05:00 Select a pure asset management bank
05:15 What is a Tier 1 Capital Ratio?
06:47 What tells us the year of formation of a bank?
07:10 Avoid banks having a physical presence outside Switzerland
07:31 Avoid banks doing investment banking besides wealth management
07:50 Assets under management vs number of employees
08:32 The liquidity coverage ratio compares liquid assets to current liabilities
08:47 Risk-weighted assets meaning?
09:27 Net-profit per employee ratio meaning?
09:48 Return on equity is the net income divided by the shareholders’ equity
10:02 What is the cost-to-net income ratio?
10:45 What are structured products? How do they work?
11:49 Banks that do not create structured products are much safer
12:24 Best Swiss banks for non residents
13:26 Swiss banks without a physical presence abroad are safer
13:43 Which is the safest bank in the world?

Click on the bank name for more information
(102 Swiss private banks in alphabetical order)

S.P. Hinduja Banque Privée SA
(will be added soon)

Stop wasting your time researching on the internet.

Speak to Mr. Enzo Caputo personally today and benefit from over 30 years of experience in Swiss private banking.

We help you invest your assets safely and for the long term.

Click on the Play Button (Red Play Button) to start the Video

🎞️ ⬇️Content of the Video⬇️

00:00 👉 The world is becoming more insecure
01:30 👉 Why Switzerland is attracting so much new money since Covid-19 crisis?
02:17 👉 Most countries are sinking deeper and deeper into insolvency
03:12 👉 How to circumvent Lebanese capital export restrictions?
04:14 👉 The last will be bitten by the dogs
04:27 👉 Capital export restriction are coming overnight – no announcement!
05:10 👉 Having a Swiss bank account is not illegal – hiding money is!
05:16 👉 How to circumvent OECD reporting obligations?
07:00 👉 How to tell if a bank is safe?
08:32 👉 Smart investors have a plan B
10:12 👉 The best asset managers of the world are located in Switzerland
11:04 👉 Why is the Swiss Franc so strong?
12:30 👉 Swiss asset managers achieve better results than banks
13:35 👉 Why you will make more money with your Swiss bank account?
14:25 👉 Since Covid-19, US investors are buying a second passport
15:00 👉 Here is the typical performance of a Swiss best in class asset manager
18:02 👉 A Swiss bank account guarantees a much better medical treatment
20:50 👉 Asset protection must take place before bad things take place
20:58 👉 Geographical diversification of assets is more important than diversification of investments
22:22 👉 How to avoid the risk of financial kidnapping?
23:20 👉 How secure are banks in Georgia?

Merges, closures and name changes of Swiss Private Banks

Name Changes of Swiss Private Banks

Berenberg Bank Switzerland Ltd name changed to Bergos AG

BLOM BANK Switzerland name changed to Banque Banorient Suisse SA

Hinduja Bank name changed to S.P. Hinduja Banque Privée SA

Van Lanschot Bank name changed to F. van Lanschot Bankiers (Schweiz) AG

Swiss Private Banks – Credit Rating Infographic

Swiss Private Banks - Credit Rating Infographic

We help protect what you’ve earned.

We’ve been advising people with asset protection and estate planning for over 30 years.

Are your assets really safe? Let’s find out and speak with Mr. Enzo Caputo today.

3. FAQ of Foreign Private Clients

  • Which Swiss private bank offers the best private banking services with the best private bank accounts?
  • Is there a private bank list tailored to the needs of foreign clients?
  • How can a foreign investor find the best private bank for private banking with information on the creditworthiness of a Swiss private bank?
  • Where does a foreign investor find the right criteria and key figures, with which he can estimate whether the best Swiss banks for private clients can meet the high expectations?
  • Which Swiss private banks ranking shows the requested services of excellent quality?

4. Why do we develop the world’s first “Swiss Private Banking Guide”?

There is no directory of banks offering private banking services with the best Swiss banks.
We asked the four major accounting firms KPMG, PWC, E & Y and Deloitte (“the Big Four Audit Firms”) if they had a list of all private banks in Switzerland and would allow us to see it. All Swiss banks are audited exclusively by the Big Four Audit Firms.

As private bank auditors, they have direct and unrestricted access to all the confidential information of the private bank they are auditing. In this respect, they have a monopoly position as international auditing companies. With the help of the auditing companies, we wanted to collect the data that is useful for finding the best Swiss bank for private clients.

It is evident that these companies keep internal lists of the key figures of the Swiss private banks, which they look after as auditors. These data are kept like state secrets. All answers were negative, except for one audit firm. Only one major accounting firm has admitted to owning an internal list of private banks with private banking ranking. She refused, however, to disclose these lists with the key figures. Our request was dismissed without explanation.

Unfortunately, this valuable information is kept secret. The accounting firms are not interested in making the private banking list, including key figures, accessible to the public. Obviously, they do not want the private investor to be able to get a first idea of the creditworthiness and quality of private banks. They want to serve the wealthy clientele (HNWI) alone.

It surprised us that such private banking lists are still kept secret in today’s world of data transparency. That the Geneva private banks still do not publish their annual reports today, we can still understand to a certain extent. Geneva-based private bankers do not conduct banking business with the help of a corporation (a stock corporation limited by shares), but with a partnership. The bank’s owners are fully liable for the bank’s debts with their private wealth. They see themselves as private service providers who accept new customers only on personal recommendation. Therefore, the arch-conservative private banks are preventing the public to look in the cards. The client can only rely on the regulator, FINMA, which also oversees the Geneva private banks.

All business relationships are based on purely personal relationships with personal recommendations. All business is private as it was 200 years ago. For a businessman who is not familiar with the history of the old secretive banking business culture and the typical low-profile mentality among the Swiss population, it will be difficult to understand such a secretive business approach.

We had to find after extensive research that no helpful criteria, numbers and ratios are readily accessible. This means that an international investor will not be in a position to analyse whether his best Swiss bank for private clients is financially stable. There is no immediately accessible information available to the prospective customer, which will enable initial investigations and first valuations of top private banks. The client makes recommendations from private contacts that he trusts to invest money in Switzerland. Most private banks only accept new customers if they are privately introduced and recommended. For 200 years, the client on boarding procedure remained unchanged.

Our private bank list should be a substantial contribution to more transparency within the Swiss private banking industry. That is why we have launched this working tool, our list of 132 private banks, including the 16 most important figures and ratios per private bank, and made it freely available to the international business community on the internet making global private banking more transparent.

The frequently asked questions from our customers and the lack of helpful information have encouraged us to create the first Swiss private bank list showing the best private banks in the world. We are convinced that we have created a working tool that helps foreign investors find the best wealth management banks for offshore banking.

5. 115 Banks providing Private Banking Services

All 115 institutions providing private banking services have a brief description of the key metrics. The key figures were selected from the customer’s point of view. The private bank list is provided with key figures, criteria and information that help the client to make his judgment on his best Swiss bank.

The information was extracted from the annual reports. However, not all annual reports are publicly available. We will continuously collect more information, update and supplement our list.

Which “ratios” are important to the client to estimate the quality of services and the number of financial reserves?

Each Swiss private bank has 16 key figures

Each listed Swiss private bank contains 16 criteria and key figures explained in simple terms. The most important key figure for the customer is the Tier 1 Capital Ratio, better known as Tier 1 Ratio. That is why we have explained in detail the calculation method of this key figure.

Our goal is to make the private bank list as understandable as possible. The international investor should have a comfortable overview of all Swiss private banks and their key figures so that he can make an initial assessment.


The private bank list is not a substitute for personal advice.

Caputo & Partners is a law firm specializing in advising international banking clients. Although the list of 115 private banks provides the first overview of Swiss private banks, it can never replace our tailored advice.

6. The 3 most fatal Errors in Private Banking

We protect you from the 3 most fatal errors in private banking that can destroy your assets in no time.

  1. The choice of the wrong private bank
  2. Working with a greedy private banker
  3. The purchase of risky private banking products

If you make one of these 3 fatal mistakes, you risk losing your savings overnight.

For large assets over CHF 30 million, we recommend diversification for multiple banks. The service quality, the asset management fees and the performance of the portfolio can be compared and optimized.

7. Club Deals & Off-Market Real Estate Opportunities with Swiss Private Banks

We will introduce you to the best private bank and a top banker for Swiss bank account opening. The best private banks for high net worth individuals, including the largest private banks such as UBS and Credit Suisse are useless if the client will be served by a junior banker. That’s why we make sure you are served by a top banker. Our top bankers, with whom we have been working together for 30 years, demonstrably increase their clients’ assets. We are happy to explain to you the track record of the performance of our top bankers.

We give you access to exclusive club deals and off-market deals. These are very confidential business opportunities handled quickly and discreetly. The relationship of trust among the parties ensures above-average returns. Club Deals are exclusive deals that a top banker offers only to his best private clients and to us. The parties to such deals have already proven successful transactions. In many cases, prominent personalities are involved who attach great importance to the utmost confidentiality. Cumbersome credit checks with a proof of funds are not necessary since the money already lies with the private bank on the Swiss bank account. Being allowed to participate in such lucrative “club deals” is a privilege. Anyone who behaves unfairly has quickly lost his privilege.

When you show the outcome of your Club Deal, for example, a newly acquired trophy property, to your friends, they will turn green with envy and be amazed. Astonished, they will ask you: “How did you manage to get access to such exclusive property?”

Choosing the best Swiss private bank is a very important decision on your financial life. According to a study by the Banking Institute of the University of Zurich, a bank account relationship with a private bank lasts an average of 17 years. The duration of an account relationship with a Swiss bank far exceeds the duration of a marriage. This comparison shows that an important decision with a long-term effect in your financial life should be well considered.

Financially successful people seek advice. Our advisory fee is nothing compared with the cost of a wrong financial decision.

8. How a Protector can protect your Wealth

Protect your assets by engaging us as the protector of your assets in Switzerland!

Every Anglo-Saxon offshore trust has a “Protector”. An offshore trust is an instrument of international estate planning for High Net Worth Individuals (HNWI). The trust has similar characteristics to a family foundation. The Protector is usually a lawyer who oversees the activities of banks and asset managers. Appoint us as the “Protector” for your offshore accounts.

We will negotiate better conditions for you. The bank charges are not set in stone. As we have placed several clients with the private bank, we are in the fortunate position of negotiating advantageous terms. We know the pricing standards of the Swiss private banking industry.

Thanks to our introduction, you can be sure that you will only be looked after by the best professionals for private wealth management – according to the “best of class” principle.

9. Facts, Figures & Criteria to find your Best Swiss Private Bank

9.1. Address
Address of the Bank

9.2. Phone
Telephone number at the reception

9.3. Website
Internet Domain

9.4. Year of foundation
Year of formation of the Bank

9.5. Subsidiaries
Controlled legal entities by the Bank

9.6. No. of employees
Number of staff

9.7. Rating
The rating agencies assess the credit rating, i.e. the creditworthiness of a bank.
The 3 Big Rating Agencies are Moody’s, Standard & Poor’s and Fitch Ratings.
These 3 agencies have a de facto monopoly, controlling 95% of the market.

Private Banking Rating Grade Table

9.8. Chairman
The Chairman of the Board of Directors

Here is a distinction:
Executive Director, the member of the Board of Directors, is active in day-to-day operations.
Non-executive Director, the member of the Board is not active in the operating business.

9.9. Shareholder’s equity

Share Capital with Reserves

Shareholder’s equity is calculated by subtracting all liabilities from the sum of all assets. Shareholder’s equity is the result of the share capital plus retained profits. Interesting to know is how has the bank used the money shown as shareholder equity. Where did the bank invest? Has the bank established a representative office in Asia? If a bank, instead of paying dividends, retains these realized gains as reserves, these funds become part of shareholder’s equity.

9.10 Assets under Management (AuM)

Clients‘ assets managed by the Bank

Assets under Management represents the market value of the assets that the Bank manages, either passively or actively, for bank clients. The assets under management cover all assets managed in the bank, including assets, where the customer decides on his own investments – with or without consulting or asset management agreement.

AuM extends to all types of assets in custody of the bank:

  • Asset Management Agreement, known as the Discretionary Asset Management Agreement
    The bank manages the assets for the customer. The bank makes all investment decisions.
  • Advisory Agreement, the Investor decides which investment products are taken
  • Pure Custody Agreement, known as “Execution Only” Agreement (Bank acts as Custodian)

9.11. Assets under Management : Employees = X

The managed assets of the private bank are divided by the number of employees. This provides an indicator for assessing the quality of care. The more assets an employee has to look after, the less attention he can give to his customer. To make more accurate statements about the quality of the service, one would need to know how many assets are serviced by a consulting mandate (customer makes investment decision) and how many assets are actively managed with an asset management mandate (bank meets investment decision).

9.12. Net Profit

Every investor wants to invest his money in a bank that generates as constant profits as possible. If the bank makes profits and loses, be careful. This could be an indication of risky investment banking activities. Those looking for the best Swiss bank for private clients should take a closer look at banks that are also active in investment banking. Investment banking means a high risk.

Other risk indicators are lending and proprietary trading (proprietary trading). Only very few banks trade foreign exchange, which they take on their own books. Anyone who comes to Switzerland because he wants to secure and diversify his assets with the help of Swiss private banks avoids banks that are active in lending, investment banking and proprietary trading. These are all risk factors.

9.13. Net Profit : Employees = X

The net profit is shared by the number of employees. This metric shows the financial performance of the employees. An average indicator may exceed CHF 100,000, but should not exceed CHF 500,000. If the number is very high, investment banking businesses could be involved.

On average, Swiss private banks currently generate 0.8% of their assets under management. For example, if the private bank manages CHF 1’000 million in client assets, it makes an average of CHF 8 million in revenues from private banking services. Before the financial crisis in 2008, the revenues of the banks were much higher. Before the financial crisis, banks received 1.3% of assets under management (AuM). Bank charges have come under pressure. They will continue to decline.

Lower bank fees due to the elimination of Swiss bank secrecy in tax matters

Thanks to the strong banking secrecy, it had many customers with black money on an anonymous bank account. The bank was able to effortlessly enforce higher fees with the customer. Today, in the age of tax transparency, customers are increasingly negotiating the number of bank charges. We always negotiate the conditions for our customers. The higher the AuM of a customer, the better conditions can be negotiated with the private bank.

9.14. Tier 1 Capital Ratio

The Tier 1 Capital Ratio is the most important indicator for clients. It provides information on the indebtedness of a bank as a risk indicator compared to the own funds. That is why a detailed description follows.

The share capital and the retained profits are aggregated and shared with the liabilities.

(Share capital + retained profits) : Liabilities = Tier 1 Capital Ratio

The equity is in the ranking at the very end of insolvency-related repayability to the creditors. It stands at the end of the bankruptcy process and remains as a liability substrate for the creditors. Therefore, the shareholder’s equity in total capital is of great importance to the creditors of the bank. The most important creditors of the bank are the customers.

Investing money in Switzerland enjoys bankruptcy privilege with the right of separation

Bank customers in Switzerland do not lose their money when it is invested. Investing in a securities portfolio in Switzerland protects investors in the event of bankruptcy thanks to a bankruptcy privilege. The money invested in securities portfolio consisting of shares, bonds and other investments in Switzerland does not fall into the Bank’s bankruptcy estate. Only the liquid assets of CHF or EUR fall into the bankruptcy estate and form the liability substrate for the creditors.

In Switzerland, in the bankruptcy of the bank, the customer may remove and rescue his investments (shares, bonds, certificates, structured products, etc.) from the bank. He has a segregation and a right of protection against bankruptcy. The investments are privileged in bankruptcy. He only loses his positions in cash. The first 100’000 CHF in cash is guaranteed by the state. Anything over CHF 100,000 becomes part of the bankruptcy estate. The higher the bankruptcy dividend, the more the customer can save.

“Attention! Benefit from the bankruptcy privilege in Switzerland!”

If you invest your money with a Swiss bank, you will not lose your money in case of a bankruptcy of the bank.
You are exposed at risk if you hold EUR, CHF or other positions in currencies.

As banks worldwide operate with relatively little equity capital and their liabilities exceed equity levels by 6 to 15 times (“gearing” with non-banks usually only goes up to three times), banks’ risks are particularly high for investors. Too low equity ratios quickly lead to unstable banking systems in case of losses. These are so-called systemic risks. Banking supervision has learned from the lessons received in the 2008 financial crisis and from devastating leverage effects. It has set strict rules for the protection of equity.
In the 2007/2008 financial crisis, bank regulators realized that banks needed more equity.

Since January 2014, the Capital Requirements Regulation (CRR) has been applied primarily in relation to “hard core capital”, the purest form of equity:

  • „Common Equity Tier 1“ (Art. 25 CRR): hard core capital
  • “Additional Tier 1 Capital (Art. 51 CRR): additional core capital
  • „Tier 2 Capital“ (Art. 62 CRR): supplementary capital

The Tier 1 capital consists of the subscribed share capital, the premium (mark-up) from a super-premium issue (the market value is above the nominal value) and the earnings retention (retained earnings). Supplementary capital (Tier 2 Capital) is losing more and more importance.

Hard core capital ratio = Common Equity Tier 1 / Total amount of liabilities x 100%
Additional Tier 1 capital ratio = core capital / total amount of liabilities x 100%
Total capital ratio = total capital / total amount of liabilities x 100%

Minimum Ratios in Europe – will start in 2019

As of January 2019, banks in Europe must comply with the following minimum ratios under Art. 92 CRR:

  • Hard core capital ratio: at least 4.5%
  • Additional Tier 1 capital ratio: at least 6%
  • Total capital ratio: at least 8%

If the total claim amount of a bank amounts to 100 million, the hard core capital must amount to at least 4.5 million. If the Tier 1 Capital Ratio falls below the 4% threshold several times, the bank license is withdrawn in the EU.

The Swiss private banks fulfil these requirements by far. With a Tier 1 Capital Ratio of 15%, you can certainly sleep soundly. If you make sure that you invest your money wherever possible in stocks, bonds, etc., not much can happen to you in Switzerland. Since Private Banking is considered a non-risky business for the banks, your money in Switzerland is safe with Swiss private banks with Tier 1 Capital Ratio of 15% – 30%.

Should a bank go bankrupt anyway, the Swiss government will intervene or the bank will be taken over by a sound institution. Since Switzerland is never in debt, there is always enough money to save a bank.

When a bank massively destroys money and the financial situation becomes precarious, the rumours will immediately seethe among the bankers in Zurich. Rumours spread like wildfire in well-informed circles. The bankers refer to the spreading of such rumours in banking as a “Bush phone”. If you subscribe to our newsletters, I’ll let you know about such rumours right away, so you have plenty of time to repost your money to a secure bank.

The core capital ratio (the Tier 1 Capital Ratio) is the most important balance sheet ratio of a bank. It is an indicator of banking supervision, of the reputation of the bank, of investors and always part of rating agency ratings.

FINMA, the watchdog of the Swiss banks, will withdraw the bank license from a bank that does not meet the minimum requirements.

The CRR apply in the EU. FINMA has set a hard core capital ratio of 10% for UBS and Credit Suisse, as both biggest private banks are classified systemically important (“too big to fail”). These specifications are known in relevant circles as “Swiss Finish”.

The Swiss public will demand a hard core capital ratio of 19% by the end of 2018. In the UK, only a core capital ratio of 9% has been required since the financial crisis. If the minimum quota in the EU is not reached by banks, there are state subsidies from the government bailout package, with which the state plays a part in the banks. I refer to the article “Private Banking”.

Tier 1 capital ratio explained in simple terms
The effectively available funds are divided with liabilities (debts).

Bail-In Legislation came into force since 2017 in the 28 EU nations
The article on Private Banking explains the Bail-In Legislation introduced in Europe, which has been in force since 2017. In the event of a crisis, bank balances of more than EUR 100,000 will be forcibly nationalized, as was already the case in Cyprus in 2013.

The next crisis will come for sure
If your money is still in a dilapidated country, it’s time to save your money. Bring your money to Switzerland before money transfers to Switzerland are banned by EU countries. It is never too early, but often too late. Capital transfer restrictions are sanctions that are often used in financial crises to stop capital flight.

“Save your money and not your bank”

9.15. Cost : Income Ratio = (CIR)

This cost-income ratio is an indicator of the bank’s efficiency. Cost divided by revenue yields a measure that shows how economically the bank is operating. The lower the value, the more efficient the bank is. This measure shows how many EUR cents are needed to earn one EUR. This consideration only makes sense in similar markets.

If you compare banks that operate in a different interest rate environment the key figure quickly loses its meaningfulness. That’s why you should never compare Swiss banks with banks in Turkey. In Turkey, interest rates are high. There does not need much capital there to generate high-interest income.

9.16. CEO

The Chief Operating Officer (CEO) is the managing director of the bank.
He leads the daily business.
If something goes wrong in the bank, then the CEO has to stand straight.

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