The Common Equity Tier 1 (CET1) ratio measures a bank’s financial strength. It shows the proportion of core capital relative to risk-weighted assets. A higher ratio signals substantial capital reserves and lower financial risk.
Swiss regulations demand stricter CET1 requirements than the Basel III minimum of 4.5%. Private banks, particularly those working with independent wealth managers, often maintain higher ratios. This extra capital boosts confidence among clients and partners.
Unlike some Geneva-based private banks, where available CET1 figures may be incomplete estimates or lack an annual report, the banks in the analysis below fully disclose their financials.
Top 5 Swiss Private Banks for Wealth Managers
| Bank | CET1 Ratio | Date | Source |
| Neue Private Bank | 53.37% | 31.12.2023 | annual report |
| J. Safra Sarasin | 47.00% | 31.12.2023 | annual report |
| Mercantil Bank (Schweiz) | 46.97% | 31.12.2023 | annual report |
| CBH | 43.04% | 31.12.2023 | annual report |
| Hyposwiss Private Bank | 37.00% | 31.12.2023 | annual report |
These banks provide tailored services for independent wealth managers while ensuring solid capital foundations.
Why CET1 Ratio Matters in Client Meetings
A high CET1 ratio strengthens trust. Clients see it as a sign of stability and risk control. For wealth managers, it reduces counterparty risk.
A CET1 ratio above 15% suggests a bank can withstand market shocks. If the ratio nears regulatory limits, it signals higher risk exposure or an aggressive growth strategy. Understanding this helps in assessing a bank’s long-term reliability.
Does CET1 Mean the Same for Large and Small Banks?
Yes, but context matters.
- Large banks have diversified income streams. Due to their broad business model, a moderate CET1 ratio might still indicate strength.
- Smaller private banks, however, rely more on capital buffers. A low CET1 ratio can be a warning sign, making them more vulnerable in crises.
Clients and wealth managers must interpret CET1 ratios carefully. A low ratio does not always mean risk, but understanding the bank’s business model and strategy is essential.
Conclusion
CET1 is a key financial indicator for private banks. A strong ratio means stability, trust, and resilience. Independent wealth managers should always check CET1 levels before selecting a banking partner. Size does not matter—capital strength does.
