Cantonal Bank

Cantonal banks are banks in Switzerland under public law or organized as stock corporations , whose owner - partly in full, partly as majority owner - is the respective canton . The history of the cantonal banks begins in the 19th century. The individual cantonal banks are independent and primarily operate in the economic area of ​​their home canton. Together they have a share of around 30% in the domestic banking business in Switzerland. Together they employ around 19,000 people and are part of the Association of Swiss Cantonal Banks .

Legal bases

The federal constitution gives the federal government the authority to draw up provisions on banking. The legislature is obliged to take account of the special tasks and position of the cantonal banks. What distinguishes a cantonal bank as such and what special provisions it is subject to is determined at the statutory and ordinance level. The Federal Law on Banks and Savings Banks specifies two essential features:

• The legal basis of a cantonal bank must be set out in cantonal law.
• The canton's participation must be more than a third of the capital and votes.

Cantonal banks differ greatly in terms of their legal and organizational structure, their size of operation or their business policy focus. Because the respective canton as its owner decides on the legal and organizational form, the ownership or sponsorship as well as the tasks and business area of ​​the individual cantonal banks on the basis of its specific objectives.

Public corporation or stock corporation

In the cantonal laws, the cantonal banks can be structured as a public corporation , as a special law, mixed-economy or private-law stock corporation .

The canton makes the equity available to a public corporation as so-called endowment capital. Some institutions also have participation certificate capital that enables private investors to participate (without voting rights) in the bank. In addition to paying interest on the endowment capital in line with the market, the cantons participate in the success of their bank through an additional profit distribution.

Designed as a public limited company Cantonal banks have a share capital , which in shares is divided. As a rule, the canton holds the majority of the capital and votes. As with other stock corporations, part of the profit is distributed as dividends .

State guarantee

Of the 24 cantonal banks, 21 have a full state guarantee (in the form of a guarantor liability of the relevant canton). With these, the respective canton is therefore liable for all liabilities of its bank on a subsidiary basis . Depending on the cantonal provisions, the bank pays the canton financial compensation for this. The Waadtländische Kantonalbank ( French Banque Cantonale Vaudoise ) and the Berner Kantonalbank ( French Banque cantonale Bernoise ) have no state guarantee , while the Geneva Cantonal Bank ( French Banque Cantonale de Genève ) operates with a limited state guarantee. Negotiations between Switzerland and the European Union (EU) over the market entry of Swiss banks in the EU are calling into question the state guarantee of the cantonal banks.

Former cantonal banks

Originally, each of the 26 cantons or half-cantons had its own cantonal bank. Due to the difficult economic environment in the early 1990s and self-inflicted mismanagement, the cantonal banks of the cantons of Solothurn and Appenzell Ausserrhoden went under in the mid-1990s . Since then there are still 24 cantonal banks.

The Solothurner Kantonalbank was taken over by the then Swiss Bank Corporation (SBV) on January 1, 1995 after a financial debacle and was run as a subsidiary under the new name Solothurner Bank SoBa. In the merger of the former Swiss Bank Corporation (SBC) with the former Union Bank of Switzerland (UBS) for UBS which placed Competition Commission , the support, the Solothurn Bank SoBa later than the spring of 2003 to sell. UBS met this requirement as early as autumn 2000 and sold the former Solothurner Kantonalbank to Basler Versicherung , which the bank now operates under the name Baloise Bank SoBa .

The Appenzell-Ausserrhodische Kantonalbank was dissolved after years of unsuccessful restructuring attempts at the end of 1996 or taken over by the then Swiss Bank Corporation (SBG) and fully integrated into the banking group.

History of origin

Most of the cantonal banks were founded in the second half of the 19th century. With the advancing industrialization of the Swiss economy, the demand for credit also increased .

Because the predecessors of today's big banks invested primarily in railway expansion as well as in trade and industry, capital for traditional branches of the economy - handicrafts and agriculture  - became scarce. Even the smallest loans were often not granted by the banks.

As a result, there was a growing desire in various cantons for state banks to meet the demand for loans by granting low-interest mortgage loans and to encourage the population to save with secure investment opportunities .

The activities of the newly founded cantonal banks were characterized by banking services for broad sections of the population, the development of the regional economy and ensuring competition. In the course of time, they continued to expand their range of services and products.

Business areas

Today the cantonal banks are generally considered to be strong competitors in the domestic market. Her field of activity has traditionally been in retail banking and banking with small and medium-sized companies within her own canton. The balance sheets and income statements of most cantonal banks are heavily influenced by the traditional mortgage and savings business.

Individual cantonal banks, such as Zürcher Kantonalbank and Waadtländische Kantonalbank , have expanded their area of ​​activity to include asset management and investment banking , thereby creating important additional sources of income.

According to Art. 24 DEBA , the cantons designate the deposit institutions. Numerous cantons assigned this task to their cantonal banks.

Joint venture of the cantonal banks

Cantonal banks do not form a banking group, but are independent and sometimes competing banks. Yet they work together on different levels. The cooperation takes place on the one hand through the Association of Swiss Cantonal Banks , founded in 1907 , on the other hand through around 20 joint ventures.

One of the most important joint ventures was the Swisscanto Group , which specializes in investment fund and pension services . With retroactive effect from July 1, 2014, Zürcher Kantonalbank bought Swisscanto Holding AG on December 10, 2014 and fully integrated it.

Another very important joint venture is the Pfandbriefzentrale of the Swiss cantonal banks , one of the most important issuers on the Swiss capital market . The cantonal banks cover around 14% of their mortgage business through the Pfandbrief bonds issued by the Pfandbriefzentrale .

Another very strong joint venture is Viseca Card Services SA , number 2 in the Swiss credit card market , which operates in the credit card business, but in addition to the cantonal banks, the Raiffeisen Group , RBA banks , Migros Bank and Bank Cler are also involved. Viseca Card Services SA is part of the Aduno Group, which specializes in cashless payment services . Since January 1, 2008, the private credit and leasing business of the Cashgate joint venture has also been integrated into this. The Aduno Group is thus positioned as number 3 in the Swiss consumer finance market.

More joint ventures are in the areas of travel money , money - and interest rate derivative market - brokers , as well as in other smaller but important areas.

IT and back office

Since the information technology and back office area is an area that is increasingly important for survival, but at the same time very costly, the cantonal banks are inevitably striving to work more closely together in this area too. In April 2007, the two largest cantonal banks in Switzerland, Zürcher Kantonalbank and Banque Cantonale Vaudoise , announced a close cooperation. It was planned to create a joint IT and back office service center, which should be operational from 2011. At the end of August 2008, however, the two institutes announced that the project would not be pursued further. In addition, there are various smaller regional partnerships between individual cantonal banks in both French-speaking and German-speaking Switzerland.

Web links

Wiktionary: Kantonalbank  - explanations of meanings, word origins, synonyms, translations

• Association of Swiss Cantonal Banks
• Pfandbrief headquarters of the Swiss cantonal banks
• Viseca
• Yves Froidevaux: Cantonal banks. In: Historical Lexicon of Switzerland .

Individual evidence

1. ↑ Federal Law on Banks and Savings Banks, Art. 3a, Authorization for Business Operations, Cantonal Banks
2. ↑ ^{a b c} List of legal form, endowment / share capital and state guarantee of the individual cantonal banks. ( Memento from October 16, 2010 in the Internet Archive )
3. ↑ List of the year of establishment, total assets, branches and staff of the individual cantonal banks. ( Memento from October 16, 2010 in the Internet Archive )
4. ↑ Legal form and state guarantee of the cantonal banks. ( Memento from November 20, 2012 in the Internet Archive ) In: kantonalbank.ch, as of June 2013 (PDF file; 98 kB)
5. ^ State guarantee. ( Memento of April 7, 2017 in the Internet Archive ) In: kantonalbank.ch, accessed on October 29, 2013
6. ↑ Sebastian Bräuer: State guarantees in danger. In: NZZ am Sonntag of February 14, 2016, p. 31
7. ↑ Balance sheet and income statement of the individual cantonal banks as of June 30, 2007 ( Memento of January 31, 2012 in the Internet Archive ) (PDF; 163 kB)
8. ↑ cf. for example Art. 7 of the Glarus Act on the Introduction of the Federal Act on Debt Collection and Bankruptcy of May 4, 1997 (EG SchKG); Hunziker / Pellascio, p. 26
9. ↑ Press release on the purchase of Swisscanto by ZKB ( Memento from February 29, 2016 in the Internet Archive )
10. ↑ Media release of August 7, 2007: Planned merger in the Swiss consumer finance market  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.  
11. ↑ Media release of April 20, 2007: Joint IT and back office center  ( page can no longer be accessed , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.  
12. ↑ ZKB, media release of August 28, 2008  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.