UBS is trying to turn the corner — it recently reported a profit, as well as a big government-backed aid package. But the bank is still wrestling with its core problem: getting customers to stay. Part of the problem is that other state-owned institutions just seem more secure, and why take any risks.
Bloomberg offers a stark illustration of what’s going on:
Swiss clients have increasingly turned to state-owned institutions, such as Zuercher Kantonalbank, which added 8.5 billion francs in new assets in the first eight months of this year, compared with 2 billion francs for all of 2007.
Clients seeking to open an account last week at ZKB’s central branch on Bahnhofstrasse in Zurich, a block from UBS’s headquarters, had to wait as long as an hour.
“We don’t know what to do with all the money right now,” ZKB spokesman Urs Ackermann said.