The Raiffeisen Group is moving one step further from its legacy. This comes from the founder, a pastor named Johann Evangelist Traber.
This was a commandment: no blank loans to companies and businesses. Anyone who wanted money from the Raiffeisen banks organized as a cooperative first had to provide collateral.
Now the “law” of prohibited blank loans, which is over 100 years old, is disappearing. In these weeks, the many Raiffeisen banks in the country, which form the third banking force, present their owners with a corresponding change in the statutes.
“Introduction of the blank credit concept – abolition of the Raiffeisen principle ‘loans only against security’,” writes the Raiffeisenbank Central Toggenburg.
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Immediately it sounds in other Raiffeisen cooperatives. The cooperative members as the owners of the banks should give the bank management the green light to cut off the supposedly old braid. This required collateral from a loan of CHF 250,000.
A spokesman for the Raiffeisenzentrale in St.Gallen confirms the introduction of loans without collateral in favor of corporate customers.
“The granting of blank loans to SMEs is customary in the industry”, he explains the step.
“The options available to the Raiffeisen banks for granting such loans are currently limited and will only be available to members of the cooperative within clearly defined guidelines in the future.”
It is not a big offensive in the fight for market share in the domestic credit business.
“The main goal of the change in the statutes is not to win new customers, but rather that the Raiffeisen banks can better respond to the needs of their local customers.”
“The change in the statutes does not entail any loosening of the lending criteria. The granting of unsecured loans is clearly limited, is only for corporate customers with a sufficient credit rating and can only be carried out within the risk-bearing capacity of the individual Raiffeisen banks. “
The switch to blank loans is fundamental. “The capital was made usable where it was developed,” was the core idea from the 19th century of the founder of Raiffeisen, Friedrich Wilhelm Raiffeisen.
“So he collected the money from the village community in the form of savings and borrowed it against collateral on favorable terms in the village.”
“Against collateral”. Not any longer longer. Away with rusty brakes.
The race for the Covid 19 loans showed just how hard wrestling is for companies with credit requirements. Led by CS and UBS, the banks outdid themselves with advertising that they would give everyone money quickly and easily.
Even then, the Raiffeisen threw a long-standing condition for lending overboard. SMEs did not have to become members of their local Raiffeisen bank for CHF 200 in order to receive a Covid loan.
By foregoing collateral, the Raiffeisen Group is taking a decisive step further. It is thus competing with the leading lenders in Switzerland: the two big banks and the regional cantonal banks.
The new blank loans show how much the Raiffeisen Group is trying to free itself from the dependency of the mortgage business. In the area of investment with investment ideas for private customers, she has not yet got very far. Now she wants to seize opportunities in corporate banking.
In its recent history, Raiffeisen Switzerland wrote inglorious headlines with blank loans. The headquarters had given Jan Schoch an unsecured loan of an estimated 30 million. At the same time, Raiffeisen held almost 30 percent of Schoch’s finance company Leonteq.
Although Schoch and Leonteq were interdependent, the Raiffeisen bosses “did not classify the two customers as linked counterparties,” Finma stated in her report on the turmoil surrounding ex-CEO Pierin Vincenz.
“As a result, the bank did not recognize corresponding cluster risks. As a result, she also incorrectly calculated regulatory capital. ”
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