2016

Global development was very fractured in 2016. In many industries and regions, there is a sense that things are taking a turn for the better, driven by optimism and an encouraging outlook for the future. Various developments and unresolved problems, such as political upheaval, government debt, negative interest rates, refugee issues, currency wars and terrorism, are otherwise a source of concern for people and markets. The relentless flood of information and resulting high levels of volatility are posing a serious challenge.

In this uncertain environment, we offer our clients security. Security in the form of a solid financial base – because we belong to one of the best-capitalised banking groups in Europe. Security in the form of trust – because our employees support our clients, are there for them and keep their eye on what is essential. Security in the form of expertise – because our relationship managers boast the best qualifications and can offer a wide range of individual solutions.

Thanks to this approach, 2016 saw Banque CIC (Suisse) continue its excellent performance of recent years. Our clients put their trust in us and tell others about our bank, thus enabling us to continually expand our customer base. Our existing clients are also intensifying their relationships with us. This has had a very welcome impact on volumes and earnings – our business volume having increased to CHF 2,2 billion and our profit to CHF 25,5 million.

Since its establishment in 1989, Gast- und Kulturhaus Teufelhof in Basel has earned an outstanding reputation. Seven years ago, two former employees, Nathalie Reinhardt and Raphael Wyniger, took over the business from Monica and Dominique Thommy-Kneschauerek. In culinary, architectural and publicity terms, Raphael Wyniger implemented new ideas and took the company forward with great verve. He put his business ideas to paper in exemplary fashion, persuading the advisors at Banque CIC (Suisse) to provide him with financing.

I don’t want to have to make choices as a bank client – what I need is the right recommendation for reasons that I can understand.

Expertise, not pick and mix

“Our customers at the Teufelhof appreciate a good selection of wines. But I don’t want to have to make choices as a bank client – what I need is the right recommendation for reasons that I can understand,” says Wyniger. In talks, it became clear that the bank and the client had differing views in this regard. The bank thought it was very important that Wyniger had a range of financing solutions to choose from. However, Wyniger was mainly interested in receiving specific and highly qualified advice from someone he could trust. Today, Wyniger stresses that his expectations were definitely exceeded in terms of benefiting from proactive advice, the transfer of knowledge, and a long-term focus. He feels that he and his bank are on the same wavelength – a seemingly banal but determining factor in every partnership. “It is important to me to know where interest rates are heading,” says Wyniger. “I receive updates without having to ask, even when my personal advisor is absent and his colleague takes over.” Wyniger points out that his financial knowledge is limited, which is why he particularly appreciates the fact that he receives precise information about the cost of his loans and is able to understand how this cost is determined. His expectations were exceeded in this regard, too.

Low interest rates, high prices and cautious banks characterise the current property market. Regulatory requirements are increasing in a bid to stave off the next credit bubble, which is why buyers are finding it more difficult to obtain loans. Compared to house prices, income levels have hardly risen in 2008, so the circle of potential buyers is shrinking. “Many interested buyers don’t know what to expect from a mortgage,” says Ronald Hofer, co-owner of BTG Immobilien AG. “They only see the low interest rates but have little idea of the conditions. Disappointed clients often have to give up on the idea of buying a property.”

High-quality properties

Hofer has been selling and marketing residential property in the Basel region for some 12 years. He knows the business and has an excellent network of contacts. Hofer specialises in premium-quality houses and apartments, and also has a broad-based portfolio of commercial properties. He has not suffered any decline in demand, even though the industry is experiencing sales difficulties. Multifamily dwellings are currently in demand as investment properties. However, purchase enquiries from expats have declined slightly since the adoption of the initiative on immigration by the Swiss population.

Emotions sometimes also play a role when buying a home. In Binningen, a vendor decided to have her parents’ home razed to the ground in order to make room for an apartment building. She could not bear to watch the demolition, but was very happy that 2 of the 5 apartments had already been sold before construction began – in a premium location where land costs more than CHF 2,000 per square metre.

The company premises of Swisspool Balneo AG are located in Cormoret in the Bernese Jura. Frank Schneider founded his company there in 1998, and has been manufacturing products to enhance body and soul ever since. Besides bathtubs and whirlpools, Schneider specialises in balneotherapy massage systems. His baths relax the muscles and joints, soften the skin and stimulate the blood circulation. The bathtubs cover 3,000 square metres of production floor. Sixteen employees make sure that these products are delivered on time across Europe. Customers mainly include hotels, healthcare facilities and construction companies. Schneider often visits his customers in person, so that they can see and touch the materials, colours and forms. He also believes that proximity to customers makes a big difference.

Factoring has changed my life. I couldn’t do without it anymore.

Efficient processes

Trust also plays a key part in his relationship with suppliers, partners and his bank. Schneider has 35 years’ experience of working with financial advisors. He says it was only four years ago that an “old-school banker” came on the scene again – a consultant from Banque CIC (Suisse) who is interested in his affairs and is honest and direct. The strong Swiss franc was a big problem for him at the time, and he had to adapt his processes to stay competitive. It was at this moment that one of his suppliers suggested he try out factoring.

What surprised you most on the stock markets in 2016?

C.F.: Extreme market fluctuations, considerable volatility in the oil price from the outset, and the outcome of the Brexit referendum were all things I did not expect.

What have you learned from the developments of the past year?

C.F.: To earn money on the markets, we need to be more creative without taking unnecessary additional risks. When interest rates are low, investors are mostly left with the equity market. They can either buy defensive stocks or systematically hedge themselves against unexpected price losses. Another sensible choice is to invest in precious metals, for example, as these usually benefit from market uncertainty.

Creativity is needed in order to earn money on the markets.

What will be the dominant theme in 2017?

M.G.: Political elections in France, Germany, Italy and the Netherlands on the one hand, Donald Trump as the new US president on the other. Both these factors are a source of uncertainty.

Will the first year under President Trump boost or dampen economic growth?

M.G.: Trump is likely to be economically successful. Many companies like Google and Apple have parked billions abroad and would not be averse to repatriating these funds to the US. Trump wants to accelerate this repatriation with a tax break. If these funds are funnelled into long-term investments, this will also help to create new jobs and boost the economy. However, it is hard to gauge what impact his policies will have on the US national budget and the sustainability of his programme. When you increase spending but reduce taxes, the money will fall short somewhere. He is cutting corporate taxes so that companies will earn more, which will then mean that tax income rises again. It this plan fails, the growing US debt burden along with stronger inflation will lead to higher bond market interest rates. Falling prices on the capital markets and price losses mainly affect bonds and, by extension, conservative investors. Rising interest rates dampen the economy, because most companies must borrow to fund their investments and growth.