Cantonal Banks
Cantonal banks are publicly owned institutions backed by the government of their respective Swiss canton.
There are 24 cantonal banks, each operating primarily within its own region. They focus on serving local businesses, individuals, and mortgage lending, providing traditional banking services such as savings accounts, loans, and investment products.
One of their key advantages is that most cantonal banks offer an implicit or explicit government guarantee, meaning that deposits are considered highly secure.
Commercial Banks
While cantonal banks are publicly owned and regionally focused, commercial banks such as UBS, PostFinance, and others operate on a national and international scale, often offering a broader range of services.
They are privately owned financial institutions and their services include personal banking, investment management, corporate banking, and international transactions.
Unlike cantonal banks, private banks do not receive government backing, so their financial stability depends on their balance sheets, risk management, and market conditions.
Key Differences
Cantonal banks primarily focus on local customers and regional economies, whereas private banks have a larger international presence. Major commercial banks, such as UBS, offer extensive global wealth management, investment banking, and corporate services, making them attractive to individuals and businesses with international financial needs.
Another distinction is the deposit security. While all Swiss banks provide deposit protection up to CHF 100'000 per person per bank under the esisuisse scheme, cantonal banks (except a few) go further by offering a full or partial state guarantee on deposits, which would make them even more secure in times of financial uncertainty.
Choosing between a cantonal bank and a commercial bank depends on your needs. If you prefer stability, strong local service, and government-backed deposits, a cantonal bank may be the best option. If you need international banking, investment services, or corporate banking, a private bank like UBS or PostFinance may be a better fit.
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Please note that all content within this response has been prepared for information purposes only. This response does not constitute financial, legal or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.