Swiss banks: less firms in 2016, profits drastically dropped

8 years ago - Published in Finance, Fundamental Analysis

Banks in Switzerland saw their profits nearly halve to CHF 7.9 billion in 2016 amid continuing global pressure on their famed secrecy walls. Surprisingly, the overall customer deposits, domestic as well as foreign, rose in Swiss banks.

The staff count, however, was down, as the number of banks, which declined again last year, from 266 to 261, for the fourth year in a row. While two new banks came up seven moved out from the list, as per the annual statistics released today by Zurich-based Swiss National Bank (SNB), the country's central banking authority.

Of the 261 banks covered, 226 registered profit. Their aggregate profit declined by CHF 7.8 billion to CHF 11.8 billion. The loss recorded by the remaining 35 institutions totalled CHF 3.9 billion (up CHF 0.1 billion). Taken together, the profits and losses produced an aggregate result of the period of CHF 7.9 billion. This marks a 50 per cent plunge from CHF 15.8 billion in 2015.

In the year under review, the aggregate balance sheet total for all banks in Switzerland rose by 2.5 per cent to CHF 3,100.8 billion (up 2.5%).

The breakdown by domestic and foreign segments shows that the rise in the balance sheet total occurred mainly in Switzerland, with domestic assets advancing by 6.8% or CHF 118.6 billion, and domestic liabilities by 4.6% or CHF 75.4 billion.

The increases were attributable primarily to amounts due from/to domestic banks in Swiss francs. Foreign assets, by contrast, declined (down 3.4% or CHF 43.8 billion), while total foreign liabilities remained almost unchanged.

Amounts due in respect of customer deposits registered an increase of CHF 47.4 billion to CHF 1,770.6 billion (up 2.7%).

Domestic deposits (up CHF 40.9 billion to CHF 1,135.7 billion) accounted for the largest part of this increase, with the big banks (up CHF 16.3 billion to CHF 340.2 billion) in particular recording higher holdings.

Amounts due in respect of customer deposits from abroad rose by CHF 6.5 billion to CHF 634.9 billion, with the increase of CHF 15.8 billion to CHF 366.6 billion in the big banks category standing in contrast to the decline of CHF 10.4 billion to CHF 111.9 billion in the case of the foreign- controlled banks.

Amounts due in respect of customer deposits represented somewhat less than 60 per cent of the aggregate balance sheet total for all banks in 2016.

Banks reduced their staff numbers – in terms of full-time equivalents – to 120,843 (down 2.5%). The number of staff employed in Switzerland declined to 101,382 (down 1.6%) and the number abroad to 19,461 (down 6.7%).