The largest of the Swiss cantonal state banks expects a growth stimulus from the planned merger between UBS and Credit Suisse, the chief executive told.

The Zuercher Kantonalbank, known locally as ZKB, has already won customers looking for a safe haven, CEO Urs Baumann told Reuters.

Baumann said the bank ” has received inflows from a variety of sources,” but he declined to provide detailed figures.

“You can assume that cantonal banks are perceived as … safe havens, ” he said.

ZKB has had a record year with a profit of more than 1 billion Swiss francs ($1.09 billion) for the first time and a jump of 31% in net new assets.

Baumann, who joined ZKB last september, said he expected to attract customers who held accounts with both UBS and Credit Suisse because they may not want to put all their money in one bank.

“You can assume … that we will see customers who want to spread their assets or their loans to other banks,” he said.

“There is a chance that the situation will accelerate our existing plans,” he added, suggesting that the bank is open to purchasing operations from Credit Suisse should they become available.

“We want to grow and we have stated that we are also open to external growth, regardless of the situation at Credit Suisse,” said Baumann.

According to Andreas Venditti, analyst at Vontobel, ZKB “will probably be one of the main beneficiaries in Switzerland, looking at all activities” and the company has the widest offer of all cantonal banks, including investment banking.

Growth restrictions

Founded in 1870, the unlisted ZKB is owned by the canton of Zurich, with part of the profits flowing back to the Canton.

Tobias Straumann, professor of economic history at the University of Zurich, agrees that ZKB is the obvious candidate to take the newly opened number 2 of Switzerland.

“It’s the only universal bank that remains,” he said.

However, he said that the bank, which manages 400 billion Swiss francs (US $ 437 billion) in assets, would face restrictions on growth, especially internationally, as a lender run by the Parliament of the canton of Zurich.

“Parliament has repeatedly expressed criticism of beautiful new plans,” said Straumann.

The canton of Zurich is liable under the state guarantee for all ZKB obligations that the bank cannot cover in the event of problems.

Deposits in Swiss bank accounts are typically only protected up to 100,000 Swiss francs.

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