According to ZKB CEO Martin Scholl, mortgage interest rates are likely to rise in Switzerland this year. Refinancing is becoming more expensive for the banks and the market is becoming more demanding, Scholl said in an interview with “Finanz und Wirtschaft”.
In addition, there is the anti-cyclical buffer, the cost of which the consumer has to bear at least in part: “Everything tends to point to higher mortgage interest rates,” said Scholl.
Real estate prices continue to rise
Despite higher interest rates, the CEO of Switzerland’s largest cantonal bank was convinced that real estate prices would continue to rise. “When high demand meets too little supply, prices rise.” Prices increased last year and will increase again this year and next. “We have an undersupply of home ownership. Construction projects take a long time.”
Because of the Ukraine war, ZKB is currently seeing some fluctuations in the income statement, according to Scholl. Because ZKB is broadly diversified, the overall effects are currently manageable. «
Everything gets more expensive
The Zürcher Kantonalbank is doing quite well. However, we cannot estimate the second and third round effects at the moment,” he said. For example, ZKB does not know what the war means for the economy and for the bank’s customers. “One thing is certain: everything will be much more expensive.”
With regard to the sanctions against Russian oligarch assets, the ZKB is implementing what the western states decide, emphasized the ZKB CEO. At the latest since the US tax dispute, it has been clear that measures by the USA and the EU, such as sanctions, must be implemented “completely and without delay”. “All banks have done that.”
No activities in Russia
The concrete implementation of the sanctions is often not easy, but feasible, according to the ZKB boss. However, ZKB does not have a Russian private banking team and the bank has never permitted activities in the Russian market, stressed Scholl. ZKB also has no private banking in London, where many rich Russians live.
Scholl has headed the ZKB since 2007. It has been known since last May that he will resign as ZKB CEO at the end of August 2022. Urs Baumann has been appointed as his successor.
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