Maerki Baumann, a Zurich-based private bank, is about to embark on a period of growth, CEO Stephan A. Zwahlen told finews.ch in an interview. It has settled most of its offshore legacies and invested in new technology bidding to widen its customer base.

Mister Zwahlen, Maerki Baumann has seen a series of new CEOs in the past years. How has this affected the business?

We have indeed had a number of changes after a long phase of stability. The changes had only a minor influence on the operative business. They didn't negatively affect the customers at all, because our customer adviser and the owner family didn't change.

The bank had to pay a relatively hefty fine of $24 million to settle the U.S. tax dispute. Why was that?

We told our untaxed U.S. customers really early to come clean. We closed the U.S. business in 2009. But the U.S. authorities chose a cutoff date for the tax program before 2009, which led to the fine you mentioned.

Do you have further liabilities?

We accelerated the clean-up for all countries, putting us into a position where we can enter the automatic exchange of information in a relaxed mood.

«The clean-up has been completed bar a few exceptions.»

Don't you face problems in Germany?

Regarding the past, we are – like many bank – in contact with the German authorities. We can't exclude a fine. The clean-up however has been completed bar a few exceptions. The process has been advanced to a degree that we will this year be able to apply for a facilitated exemption at BaFin.

Which means....

With the facilitated exemption, we are in a position to approach German customers and advise them comprehensively. We will always advise them from our offices in Zurich though and won't open a branch in Germany. It wouldn't make sense for us in business terms. The German clients also want to keep part of their assets in Switzerland.

Maerki Baumann hasn't been able to increase assets under management in years. Won't you have to turn this round soon?

We've given up more than a billion francs in recent years just because of the clean-up of the offshore business. At the same time, we received new money of a similar size from mostly Swiss clients. Some 72 percent of our 7 billion in client assets belong to Swiss clients, mostly from Zurich. About 12 percent belong to German citizens.

«Our problem is that hardly anybody knows about it outside the Zurich region.»

Where do you expect to be in terms of assets under management in three years time?

Those forecasts we never publish. I'm confident that our core markets in Switzerland and Germany will grow. We have big potential at our bank.

We invested substantially in the competence of our staff and the development of our IT. We have a product that comes very close to what the banking client is looking for in the market. Our problem is that hardly anybody knows about it outside the Zurich region.

How do you aim to change this? With ads in newspapers?

No, that wouldn't be us. We are trying to sharpen our profile. We invested a lot in our investment publications and are constantly organizing conferences. These allow us to meet potential customers and to try convince them about us. We also want to better use our network to acquire clients.

How do you approach the question of digitization?

The digitization is an opportunity to substantially improve the intensity of customer contacts and the frequency of the contacts. We are currently evaluating an upgrade of our online services. The aim is to give the customers not only the opportunity to check the performance of their asset modules but also to make investment proposals around the clock.

«We will probably exceed last year's the result.»

We also recently launched a big data project. It contains the systematic collection and processing of data regarding customer activities in a data warehouse. It allows us to analyze customer demands in detail and adapt our advice to individual needs. Companies such as Google and Amazon have been doing this for quite some time with success.

Some private banks are integrating roboadvisers in their concept. Do you consider this as well?

Absolutely. There are some good technologies available. If we launch such a service, it will complement our traditional private banking – a hybrid model.

And as such you would risk to cannibalize the customer advise?

Yes, but you need to allow it if you take seriously what customers want. At the end of the month, we will launch a passive asset allocation solution that will be cheaper than the classic, actively managed mandate.

How was your start into the new year?

This year, we will probably exceed last year's result. I'm convinced that we have reached a very good point of departure. The clean up is mostly completed and thanks to our investments in expertise and technology, we are at the beginning of a period of growth.

It seems that Maerki Baumann has decidedly cut costs?

For business reasons we indeed have made some adjustments, reduced personnel and cut the total compensation in comparison with before the financial crisis. This period is now behind us and will have a positive effect in the second half.


Stephan A. Zwahlen, 38, was appointed CEO of Maerki Baumann at the beginning of February. He had previously managed the Investment Solutions & Services unit. From September 2010, he also was deputy chairman of the executive board.

Zwahlen studied economics at the University of St. Gallen. He joined Maerki Baumann in 2005 as project manager for the strategic repositioning of the bank and the founding of sister bank Incore. Subsequently, he joined UBS Global Wealth Management before returning to the bank he now manages.