Swiss and Liechtenstein wealth management banks entered 2026 with substantially more client assets and strong capital positions. Yet the latest figures also point to a less favourable development: profitability and cost efficiency weakened. The contrast raises a question for bank leaders: how can growth be translated into sustainable returns?
A recent study of wealth management in Switzerland and Liechtenstein examines 70 banks using information from annual reports and official commercial registers. It compares 12 indicators across four dimensions: growth, prosperity, efficiency and capital adequacy. Three indicators are used for each dimension, with separate peer groups for private banks above and below CHF 20 billion in assets under management (AUM).
Growth was strong, but uneven
Combined AUM rose by 12% to CHF 9.7 trillion. Net new money reached CHF 138 billion, 9% more than in the previous year. These aggregate figures mask differences between institutions. UBS and the smaller private banks were important contributors to growth, while banks above CHF 20 billion in AUM expanded more moderately, by around 6%.
The median figures add useful context. Median AUM growth slowed to 6.2%, from 12.5% in the previous year. At the same time, median net new money as a proportion of AUM increased to 3.7%, from 1.5%. The market therefore attracted more assets relative to the size of the median bank, even as its rate of asset growth moderated.
These measures capture different things. Changes in AUM reflect both client flows and market movements; net new money offers a more direct indication of flows, though it does not by itself explain their source or future profitability. Nor does a rise in total assets imply that every bank gained assets at the same rate. The aggregate result is strongly influenced by the largest institutions, while median values describe the position of the bank at the centre of the distribution.
That distinction matters in a market with substantial differences in size and business model. A large international institution, a mid-sized private bank and a locally focused boutique may face very different costs, client needs and growth opportunities. A single market-wide average can obscure those differences. The study’s separation of banks above and below CHF 20 billion in AUM is one way to make comparisons more informative, although institutions within each group still differ in important respects.
Strong inflows did not ease the efficiency pressure
The median cost-income ratio rose to 83.2%, from 76.7%. Median return on equity also fell, to 6.40% from 7.18%, while median returns on AUM and total assets declined. In other words, the year’s growth in assets and inflows did not coincide with stronger median profitability.
The study points to spending on regulation, compliance, technology and talent as areas where costs continue to grow faster than revenue. The figures alone cannot establish which factors explain the change at individual banks. They do, however, make efficiency a central strategic question: are investments improving productivity, or are they adding to costs without yet producing measurable gains?
The distinction between revenue growth and productivity is important. A bank may report higher income because markets have risen or because clients have added assets, without changing the amount of work or infrastructure required to serve them. Conversely, an institution may invest in systems and processes that initially increase costs but produce benefits only over time. The indicators provide a basis for asking these questions, but they cannot by themselves identify the causes of a particular bank’s performance.
This is particularly relevant as banks adopt new technology, including artificial intelligence. Its effect on productivity will depend on how it is integrated into processes, skills and organisational structures, not simply on the level of investment. If new tools are added on top of existing ways of working, banks may carry the costs of both systems. If they are accompanied by changes to processes and responsibilities, they may eventually reduce repetitive work or allow employees to focus on higher-value activities. The reported figures do not yet settle that question.
The longer-term series in the study is useful here. A single year can be shaped by market conditions and one-off effects. Looking across editions makes it possible to ask whether improvements in efficiency persist when market conditions change, or whether cost-income ratios tend to move with the revenue cycle. That is a more demanding test than simply observing whether AUM or income increased in one period.
Capital strength and market concentration
Capital adequacy remains a clear strength. The median CET1 ratio stood at 27.2%, the median leverage ratio at 12.4% and the median liquidity coverage ratio at 270%—all well above Basel III minimum requirements. These measures describe different aspects of resilience: the quality of a bank’s capital relative to risk-weighted assets, its leverage relative to total exposure, and its capacity to meet short-term liquidity needs.
Strong capital provides a sound foundation, but it does not resolve the challenge of generating sustainable returns from the operating model. A bank can be well capitalised and still face pressure on profitability or efficiency. For boards, the relevant questions therefore extend beyond whether regulatory thresholds are met: how much capital is appropriate for the institution’s risks and strategy, and how effectively are people, technology and infrastructure being used?
The market is also geographically concentrated. Zurich and Geneva account for more than 70% of the banks’ Swiss headquarters and 85% of Swiss AUM. The AUM figures are assigned to each bank’s headquarters, however, and Zurich’s share is heavily influenced by UBS. The geographic comparison should therefore be read as a measure of where banks are headquartered, not where all their wealth management activity takes place.
The distinction is not merely technical. Wealth management is conducted through relationships, teams and operational platforms that may span several locations. Attributing a bank’s entire AUM to its registered or principal headquarters can help summarise the market, but it does not show the distribution of client-facing activity across Switzerland. Regional centres such as Lugano and Basel may also play a role that is not fully reflected by a head-office allocation.
What comparable data can (and cannot) tell us
The study uses public information to create a structured comparison across institutions. Its scope is deliberately defined: it covers banks whose activities meet the study’s wealth management criteria, rather than every firm or professional that provides services to wealthy clients. For Swiss- and Liechtenstein-headquartered banks, the figures generally reflect their global business; for banks headquartered elsewhere, they refer to their Swiss and Liechtenstein operations. This boundary is important when interpreting the total market size and comparing individual institutions.
Benchmarking can help boards and management teams identify where their institution differs from peers and where further analysis may be useful. But a ratio is a starting point, not an explanation. Differences in business mix, client segments, pricing, accounting practices and organisational choices all matter when interpreting a result. A higher cost-income ratio, for example, signals a relationship between costs and income; it does not reveal which cost items are necessary, which can be changed or what service levels clients receive in return.
The same caution applies to rankings. The study scores banks relative to their peer groups on selected indicators. The results can highlight strong performance within a defined category, but they should not be read as a complete assessment of a bank’s strategy, risk management, client outcomes or long-term prospects. Those questions require evidence beyond the financial indicators included in the comparison. The consolidated private banking benchmarks offer a useful reference point, while institution-specific analysis is needed to understand what lies behind each result.
The figures therefore point to a market that is both resilient and under pressure. Assets, inflows and capital remain substantial strengths. At the same time, weaker median profitability and a higher cost-income ratio suggest that growth alone will not secure the next phase of performance. For boards and executive teams, the task is to understand which parts of the business are generating durable returns, where operating costs are rising, and whether investment in technology and talent is producing measurable improvements.
The study is published by the private research company I lead. It is not affiliated with ZHAW School of Management and Law.
However, I believe the study’s findings and analyses are relevant for the readers of this blog.