The possible impact of a surging currency on Swiss private banks’ profits is a subject that will occupy analysts and commentators in the months ahead. The reality is that foreign-currency denominated assets account for a significant proportion of client assets at virtually of the big Swiss banks, especially Credit Suisse, Julius Baer and UBS. But most of these banks’ costs are denominated in Swiss francs. This mismatch between costs and revenue earning assets will almost certainly have a malign impact on profitability going forward, unless the Swiss franc’s appreciation is mitigated or reversed.

Julius Baer...