ZURICH, March 27 (Reuters) - The largest of Switzerland's state-owned cantonal banks expects a boost in growth from the planned merger of UBS (UBSG.S) and Credit Suisse (CSGN.S), its chief executive has told Reuters.
Zuercher Kantonalbank (ZKB.UL), known locally as ZKB, is already winning customers looking for a safe haven, CEO Urs Baumann told Reuters.
Baumann said the bank had "received inflows from various sources" though he declined to provide detailed figures.
"You can presume that cantonal banks are being seen as ...safe havens," he said.
ZKB is coming off a record year having posted a profit of more than 1 billion Swiss francs ($1.09 billion) for the first time, and a 31% jump in net new assets with the bank disclosing strong inflows of client money.
Baumann, who joined ZKB last September, said he expected to attract customers who may have held accounts at both UBS and Credit Suisse, as they may not want to hold all their money in one bank.
"You can assume ...we will see clients who want to diversify their assets or their loans across other banks," he said.
"There is a chance that the situation might accelerate our existing plans," he added.
"We want to grow and we have stated that we are open to looking at external growth as well, regardless of the situation of Credit Suisse," Baumann said.
Vontobel analyst Andreas Venditti said ZKB "is likely to be one of the main beneficiaries in Switzerland, when viewed across all businesses," noting it has the broadest offering of any of the cantonal banks, including investment banking.
GROWTH LIMITS
Founded in 1870, unlisted ZKB it is owned by the Canton of Zurich, with a share of profit 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 Switzerland's newly opened No. 2 spot.
"It is the only universal bank left," he said.
However, he said the bank, which manages 400 billion Swiss francs ($437 billion) in assets, would face limits to growth, especially internationally, as a lender run by the Canton of Zurich's parliament.
"The parliament have been repeatedly critical of fancy new plans," Straumann noted.
The Canton of Zurich is liable under the state guarantee for any ZKB liabilities which the bank cannot cover in the event of trouble.
Deposits in Swiss bank accounts are usually only protected up to 100,000 Swiss francs.
(This story has been corrected to fix quote and delete reference to Credit Suisse in paragraph 8)
($1 = 0.9190 Swiss francs)
($1 = 0.9168 Swiss francs)
($1 = 0.9160 Swiss francs)
($1 = 0.9164 Swiss francs)
