In order to get inflation under control, the Swiss National Bank (SNB) gradually raised the key interest rate in 2022. The last increase for the time being was announced by SNB President Thomas Jordan (60) in mid-December.
Thomas SchlittlerBusiness editor Sunday view
In order to get inflation under control, the Swiss National Bank (SNB) gradually raised the key interest rate in 2022. The last increase for the time being was announced by SNB President Thomas Jordan (60) in mid-December. Since then, commercial banks have again had to pay 1.00 percent interest when they borrow money from the SNB – but their capital earns interest at the same conditions if they deposit it with the central bank.
This should result in Mr. and Mrs. Schweizer’s savings accounts also yielding a bit again. So far – four months after the end of negative interest rates in September – savers have felt little of this effect. The banks only pass on fractions of Jordan’s interest rate hikes to customers.
Interest rates are adjusted “asymmetrically”.
Martin Brown (52) says that if they have “a certain market power”, they always adjust their interest rates “asymmetrically”. The director of the Gerzensee study center, the SNB’s training and further education centre: “If the key interest rate falls, the banks’ savings rates are quickly adjusted. If the key interest rate rises, the adjustment in savings rates will take place only hesitantly.”
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A look at the past also shows that there is still a lot of room for improvement: in November 2008, when the mean value of the SNB target range was 1.00 percent for the last time, the average interest rate on Swiss savings accounts was 0.94 percent. In November 2022, on the other hand – more recent data is not yet available – the banks only granted 0.05 percent interest on savings deposits. This is shown by figures from the SNB.
Savings account interest always delayed
For example, in November 2008, Raiffeisen Switzerland recommended paying interest on member savings accounts at 1.5 percent. The head office of the cooperative group currently recommends an interest rate of 0.25 percent for amounts up to 100,000 francs and 0.1 percent for amounts above this limit.
The Raiffeisen media office justifies it like this: “The interest on savings accounts always follows the development of the SNB key interest rate with a delay, both when the key interest rate increases and decreases.” With the “massive reductions” in their savings accounts from the end of 2008, customers continued to benefit from a high interest rate, which was then successively reduced.
At Credit Suisse, UBS and Zürcher Kantonalbank (ZKB), the interest rate comparison with 2008 is similar – and the explanations are almost identical. A ZKB spokeswoman states: “The pricing of banking products is not based on the short-term key interest rate, but on the one hand on the long-term interest rate curve – these looked very different in 2008 and 2022 – and on the use of savings.”
In other words, because the banks have granted mortgages at low interest rates in recent years, some of which continue for a long time, they cannot now suddenly raise interest rates on savings. However, banks are not afraid to jump in interest rates when granting mortgage loans, as the past few months have shown.
The Swiss banks have therefore noticeably increased their profit margins from the interest differential business in recent months – and quite a few are likely to present record results in the coming weeks.