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“A normal bank pays an average of about 20 percent in taxes and about 50 percent of its profits to its shareholders. I don’t see any reason why cantonal banks shouldn’t do this as well. “So Thomas Gottstein, Credit Suisse (CS) chief executive officer, said in an interview on” Switzerland at the weekend “on Saturday.
Gottstein sees a distortion of competition in Aargau between the Neue Aargauer Bank (NAB), which is owned by CS, and the Aargauische Kantonalbank (AKB), which is wholly owned by the canton. On the one hand, AKB benefits from the state guarantee and, on the other, it is exempt from cantonal taxes.
AKB president does not see any distortion of competition
Dieter Egloff, Chairman of the AKB Banking Council, said on request: “We pay an annual compensation of 12 million Swiss francs for the state guarantee of the canton of Aargau.” It is calculated on the basis of regulatory capital and is the highest compensation compared to other cantonal banks in Switzerland.
“The federal government classified the CS as ‘too big to fail,'” says Egloff. In doing so, the federal government itself expressed that it would save CS in an emergency. “The big bank doesn’t pay anything for this factual or implied state guarantee, so I don’t see where there should be a distortion of competition,” Egloff replied.
A comparison of the results of NAB and AKB in the last financial year shows that the two largest banks in the canton made practically the same profit before tax, each of around CHF 148 million. The deliveries to the owners are almost identical: NAB paid a dividend of 67 million to CS as sole shareholder, while AKB paid the canton as sole owner a distribution of profits of 66 million.
There are differences in two other positions: The AKB is exempt from cantonal tax and only pays 8.1 million taxes in the municipalities of its branches. At the NAB, which pays cantonal taxes, 27.2 million were due. The AKB is now giving 12 million to the canton as compensation for the state guarantee, while this is not applicable to the private NAB.
AKB Bankrat Chairman Dieter Egloff emphasizes that you have to look further back to make a comparison. “Over the last two financial years, Aargauische Kantonalbank, in consultation with the governing council, has reduced its profit distribution to the canton by around 30 million francs a year.”
This is in order to further strengthen own funds with a view to the higher own funds requirements expected under the “Basel III final” regulations. However, for the previous financial years 2016 and 2017, the AKB paid significantly more, at CHF 99 million and CHF 96 million.
Canton taxes are only temporarily reduced
“And we will do it again in the future,” Egloff announces. In 2016 AKB achieved an annual profit of 142 million francs, in 2017 it was 146 million. “With the payment of the state guarantee of 12 million and taxes to local communities of around 8 million, our taxes to the public sector in these years exceeded even 70 percent of the profits that Mr. Gottstein demands,” says Egloff .
And he emphasizes: “In principle, every franc that the Aargauische Kantonalbank gives with its profits benefits the people of Aargau through cantonal and communal budgets. At NAB, most of it flows as dividends to CS and from there to mostly foreign shareholders. “
