Commerzbank is doing better than it has for many years. This could also be good news for small and medium-sized enterprises (SMEs) in Switzerland. Germany's second-largest bank wants to make a big push in the Swiss corporate client business and fill the gap that is gradually beginning to open up in the Swiss credit landscape twelve months after the takeover of Credit Suisse by UBS.

„We want a big slice of the cake,“ says Marc Steinkat, head of Commerzbank Switzerland. The 56-year-old came to Zurich almost ten years ago to offer export financing and related financial services to Swiss industrial and commercial companies. „We have grown in the double-digit percentage range every year and expect this to accelerate,“ he says talking to Börsen-Zeitung.

Steinkat speaks in the knowledge that foreign banks do not have an easy time in Switzerland: In October, the industry association Swissmem asked its member companies whether they trusted foreign banks to successfully step into Credit Suisse's shoes. Only about 30% said yes.

Jean-Philippe Kohl, Deputy Director at the important industry organization, knows why: „With their scepticism, Swiss SMEs are expressing the fact that they expect a long-term and weatherproof partnership from their lenders.“ Some companies are still reverberating from the negative experiences they had during the financial crisis. „The first to leave the country back then were the foreign banks,“ says Kohl.

Steinkat emphasizes even more the resilience of Commerzbank, which it has also demonstrated in the recent past in Switzerland. The negative interest rate regime in Europe hit the Frankfurt-based bank hard and drove the Group deep into the negative zone in 2020. This was followed by a far-reaching reduction in jobs and costs. In Switzerland the network of six branches that had been established in 2014 in almost all parts of the country had to be concentrated at the Zurich location.

„We have learned a lot, sharpened our business model, placed a stronger focus on trade finance and thus better differentiated Commerzbank's added value from other banks,“ says Steinkat, summing up his years of apprenticeship in Switzerland. The patience seems to have paid off. „Our clients are encouraging us to continue to grow in Switzerland,“ says the manager, who became Swiss himself in 2020.

According to Commerzbank, it has outstanding loan commitments to Swiss corporate clients amounting to 11 billion Swiss francs. That is no small feat. Private companies with 50 or more employees currently take out non-mortgage-backed bank loans in Switzerland totalling around 60 billion Swiss francs. Half of these loans are not collateralized.

The National Bank's statistics also show that the volume of unsecured loans to private-sector companies with 50 or more employees has fallen by almost 7 billion Swiss francs since the end of 2020. The reason for this is not a shortage of supply, but a decline in demand. Four years after the outbreak of the coronavirus pandemic, a large majority of Swiss companies – including SMEs – are still solidly financed. „Equity ratios are often above 40% and demand for credit is correspondingly restrained,“ Commerzbank also states.

However, this could change very quickly. Surveys and statistical observations in the export-oriented Swiss SME segment show that companies' demand for credit increases abruptly when they expect significant upward or downward changes in turnover. While sharp growth boosts typically generate higher investment requirements, abrupt sales losses can lead to a liquidity shortage.

With two major domestic, internationally active banks right on their doorstep, Swiss export companies have until recently enjoyed a privileged situation in terms of credit supply. This will change once Credit Suisse has been fully absorbed into UBS. „We are now de facto more at the mercy of a major bank, and we generally don't like dependencies,“ said Swissmem President Martin Hirzel in December in a debate with UBS CEO Sergio Ermotti in the NZZ.

With a view to the Commerzbank offensive, Swissmem Deputy Director Kohl says: „It is only to be welcomed if foreign banks want to get involved in financing industrial companies in this country.“ There is a particular need in the SME sector: unlike large global companies, they do not naturally have a network of banks with international experience. Kohl speaks for an industry that employs over 330,000 people and exports around 70 billion Swiss francs worth of goods every year, financing almost a fifth of Switzerland's annual imports.

Marc Steinkat is coquettish: „If Commerzbank could be founded again, it would have to be in Switzerland.“ Its „extremely strong export orientation“ is the cake from which the German corporate bank would like to cut a large slice in the next few years. „The disappearance of Credit Suisse is a misfortune for Switzerland, the bank was a pillar of the strong Swiss economy for a long time. But the changed situation is now a huge opportunity for us,“ says Steinkat, adding revealingly: „We are not limited when it comes to accepting clients and employees from Credit Suisse, provided they fit in with our export-oriented business model.“

Swissmem President Hirzel says that the medium-sized and large companies in his association have traditionally maintained relationships with foreign banks. „But in a downturn, we don't want to be dependent on them.“ In many cases, however, such dependence can hardly be avoided. Against this backdrop, Commerzbank's promise – „we have come to stay“ – certainly has its value, even if it has not yet passed the next bad weather test.