Swiss and Liechtenstein private banks demonstrated resilience in a volatile geopolitical and economic environment throughout 2025. While asset growth remained positive and net new money inflows confirmed the continued appeal of Switzerland and Liechtenstein as trusted wealth management hubs, the exceptional tailwinds of recent years faded. Swiss interest rate levels returned to 0%, margin pressure intensified and banks had to focus more on scale, cost discipline and sustainable fee-based income. M&A activity remained selective, with transactions occurring at moderate levels rather than signaling a broad-based consolidation wave.
Market Update 2026
Private Banking Switzerland & Liechtenstein
Our analyses in the report are based on the 2025 annual reports of private banks in Switzerland and Liechtenstein and highlight the key financial developments observed across the sector up to 31 December 2025.
Swiss and Liechtenstein private banks continued to benefit from their reputation as safe havens for wealth management. Political stability, legal certainty and a stable currency remained key advantages in times of geopolitical uncertainty and market volatility. At the same time, the sector faced renewed pressure from declining interest income, rising personnel and technology costs, regulatory complexity and evolving client expectations.
Below are some key highlights from our latest Private Banking Market Update 2026 publication.
Moderate growth replaces last year’s exuberance
After the strong financial market-driven surge in 2024, assets under management returned to more moderate but still solid growth in 2025. All bank size clusters reported positive AuM growth, ranging from 5.5% to 8.0%, supported by financial markets and continued net new money inflows. Net new money remained positive across all clusters, with small banks achieving the highest inflow rate at 5.2%, followed by medium-sized banks at 4.3% and large banks at 2.8%. However, the strong Swiss franc, particularly against the US dollar, weighed on foreign-currency-denominated assets and tempered overall growth.
Looking ahead, we expect Switzerland’s safe-haven appeal to continue supporting positive inflows. However, competition for on- and off-shore client assets is likely to remain intense and individual bank performance will increasingly depend on clear positioning, strong relationship management, cross-border expertise and the ability to capture assets following liquidity events.
Structural margin challenges drive CIR increases
Cost-income ratios increased for small and medium-sized private banks in 2025. The main driver was not excessive cost growth, but the fact that operating income came under pressure as interest income continued to decline. With Swiss reference rates back at 0%, the interest income tailwind that supported profitability in previous years has largely faded. Large private banks, by contrast, maintained a stable CIR, reflecting their broader income base, lower reliance on interest income and scale-driven operating leverage.
In general, this divergence underlines the importance of scale in private banking. For small and medium-sized banks, future performance will depend on choosing the right strategic path: sharpening their product and service offering, pursuing further AuM growth, or combining both with disciplined execution. Strengthening fee and commission income, streamlining non-core activities and using technology to improve productivity will also be key enablers.
Profitability compression continues for smaller banks while large players hold firm
The profitability gap between large and smaller private banks widened in 2025. Large banks continued to generate attractive returns, achieving a combined return on equity of above 10%. This confirms their ability to maintain double-digit profitability despite margin compression and volatile markets.
The small and medium-sized bank clusters saw their return on equity declining in 2025. Their profitability levels remain below typical investor expectations and reflect the combined effect of lower operating income margins, rising cost pressure and the absence of the interest income buffer that supported results in 2023 and 2024.
Private banks remain well capitalised, which strengthens stability and client trust but also weighs on return on equity. For smaller and medium-sized institutions, the path to stronger profitability will require either higher volumes, improved income margins, more efficient operating models or a sharper strategic focus. Banks unable to generate sustainable returns may increasingly reassess their strategic options.
Selective transactions rather than broad consolidation
M&A activity in the Swiss private banking and wealth management sector remained moderate in 2025, with transactions occurring on an individual basis rather than as part of a broad consolidation wave. Profitability pressure, regulatory complexity and strategic repositioning continue to make M&A a relevant option for some institutions, but the market still points to gradual and targeted consolidation. The largest transaction by assets under management was EFG International’s acquisition of Cité Gestion SA (CHF 7.5 billion in AuM). In the EAM space, consolidation has gained momentum more recently and we anticipate it to become increasingly visible.
Outlook
Competition for assets is further intensifying, while margin pressure, normalised interest income, rising costs, technology investment and changing client needs make profitability harder to sustain. Although the number of private banks is expected to decline gradually, consolidation is likely to remain selective rather than accelerate sharply. Banks that combine disciplined cost management, scalable advisory models, regional diversification and Switzerland’s trust advantage will be best positioned for sustainable fee-based growth going forward.