Out One Bank, Into Another

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.

(via MR)

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