Cantonal bank

Cantonal banks are public or organized as joint stock companies Banks in Switzerland, whose owner - either totally or partly as a majority carrier - the respective canton. The history of the cantonal banks begins in the 19th century. The individual cantonal banks are independent and operates primarily in the utility room of their home canton. Together they account for around 30 % of the domestic banking business in Switzerland. They employ around 19,000 people.

• 4.1 IT and Back Office

Legal bases

The Federal Constitution gives the federal government the authority to establish rules on banking. The legislator is obliged to take account of the special function and role of the cantonal banks. What a Kantonalbank distinguished as such and which specific provisions it is subject, is set to legislative and regulatory level. The Federal Law on Banks and Savings Banks are two essential features before:

• The legal basis of a cantonal bank must be recorded in the cantonal law.
• The involvement of the canton has more than one-third are of capital and votes.

Cantonal banks differ greatly in terms of their legal and organizational design, their size of operation or to its strategic focus in part. Because of the legal and organizational form, ownership or sponsorship, as well as the tasks and business district of the individual Kantonalbank be decided by the State as its owner because of its specific objectives.

Public corporation or joint-stock company

In the cantonal laws, the cantonal banks can be configured as a public corporation, as special legislation, semi-public or private corporation.

A public body, the Canton equity as so-called endowment capital. Some institutes also feature a participation certificate capital, private investors permitted to participate (without voting rights ) on the bench. In addition to a standard market interest on the endowment capital, the cantons of an additional dividend on the success of their bank are involved.

As a public company designed cantonal banks have a share capital, which is divided into shares. The canton generally holds in each case the majority of capital and votes. As with other corporations, a part of the profit is distributed as dividends.

State guarantee

21 Of the 24 cantonal banks have the full state guarantee ( in the form of a guarantor's liability ). In these, the respective canton thus secondarily liable for all liabilities of its bank. Depending on cantonal regulations, the Bank paid the canton for financial compensation. No state guarantee has the Vaud Cantonal Bank ( Banque Franco Canto Vaudoise ) and the Berner Kantonalbank (French Banque Cantonal bernoise ), while the Cantonal Bank of Geneva (French Banque Cantonal de Genève ) operates with a limited state guarantee.

26 cantons, cantonal banks, but only 24

Originally, each canton and half-canton had its own Kantonalbank. Due to the difficult economic environment, early 90s and due to self -inflicted mismanagement mid-90s are gone, the cantonal banks of Solothurn and Appenzell Outer Rhodes.

The Solothurn Cantonal Bank was taken over by a financial debacle on 1 January 1995 shall go from the former Swiss Bank Corporation (SBC ), and under the new name of the Solothurn Bank SoBa as a subsidiary. With the merger of the former Swiss Bank Corporation (SBC ) with the former Union Bank of Switzerland (UBS ) UBS made to the Competition Commission, the edition, the Solothurn Bank SoBa until spring 2003 at the latest to sell. Already in the autumn of 2000, met the UBS this edition and sold the former Solothurn Kantonalbank Basler Versicherung, which now leads the Bank under the name Baloise Bank SoBa.

The Appenzell- Ausserrhodische Kantonalbank was disbanded after years of unsuccessful attempts at rehabilitation end of 1996, taken over by the former Union Bank of Switzerland (UBS ) and fully integrated into the Bank Group.

Genesis

The establishment of the cantonal banks falls mostly in the second half of the 19th century. With the progressive industrialization of the Swiss economy at that time also increased the demand for loans.

Crafts and agriculture - - Because the predecessors of today's big banks invested mainly in the railway development as well as in trade and industry, the capital for traditional industries was scarce. Even the smallest loans were often not granted by the banks.

As a result, grew up in different cantons, the desire for state banks that should be covered by granting low-interest mortgage credit demand and promote with secure investment opportunities the saving will of the people.

The activities of the newly established cantonal banks was dominated by banking services for broad sections of the population, the development of regional economy and securing competition. Over time, they expanded their services and product offering continues.

Divisions

Today, the cantonal banks are generally considered strong competitors in the domestic market. Its field of action is traditionally in retail banking and the banking business with small and medium-sized enterprises within the own Canton area. So the balance sheets and income statements of most cantonal banks are strongly influenced by traditional mortgage and savings deposit business.

Individual cantonal banks, such as the Zürcher Kantonalbank and the Vaud Cantonal have extended their field of activity in asset management and investment banking and created so important additional source of revenue.

According to Art 24Vorlage. Kind / Maintenance / ch- search SchKG denote the cantons the deposit institutions. Many cantons transferred this task to their cantonal banks.

Joint venture of the cantonal

Cantonal banks do not form a banking group, but are independent and partly to Competing banks. Yet they work together at different levels. Cooperation takes place one hand over the bandage founded in 1907 Swiss Cantonal Banks, on the other hand, around 20 joint ventures.

One of the main joint venture ever is specialized in investment funds and pension services Swisscanto Group. This is in the investment fund sector, the number 3, in the investment foundations, the number 2 and the collective foundations number 9 in the Swiss market.

Another very important joint venture is the Pfandbriefzentrale the Swiss cantonal banks, one of the main issuers on the Swiss capital market. About emitted from the Pfandbriefzentrale Pfandbrief bonds the cantonal banks cover around 14% of its mortgage business.

Also a very strong joint venture is active in the credit card business Viseca Card Services SA, number 2 in the Swiss credit card market, in which, however, in addition to the cantonal banks, the Raiffeisen Group, RBA banks, Migros Bank and Bank Coop are involved. Viseca Card Services SA is part of the specialized cashless payment services Aduno Group. Since 1 January 2008 the private credit and leasing business of the joint venture cash gate will be integrated into this. This Aduno Group positioned itself as number 3 in the Swiss consumer finance market.

Other joint ventures are in the areas of travel funds, monetary and interest rate derivative market brokers as well as other smaller but still important areas.

IT and Back Office

As the information technology and back office area is an always vital, yet highly cost-intensive area, the cantonal banks are forced to seek to work more closely in this area. In April 2007, had the two largest cantonal banks in Switzerland, the Zurich Cantonal Bank and Banque Cantonal Vaudoise, announced a close cooperation. The plan was to create a common IT and back-office service center, which will be operational from 2011. End of August 2008 gave the two institutes known, however, that the project will not be pursued. There are also several smaller regional cooperation between individual cantonal banks both in western Switzerland as well as in German-speaking Switzerland.