Swiss banks expect good business in 2024
Published: Thursday, Aug 29th 2024, 09:20
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Swiss banks' profits skyrocketed in 2023. The banks also expect a positive trend in the short and medium term.
Specifically, the aggregate annual profit of Swiss financial institutions rose to CHF 25.9 billion in 2023 from CHF 6.5 billion in the previous year. According to the Swiss Banking Barometer published on Thursday, this is a historic high. However, the increase in profit should be seen in the context of the one-off effects of the takeover of Credit Suisse by UBS, according to the report.
Aggregate operating profit, which is a measure of operating performance, rose by 2.9% to CHF 72.3 billion.
Despite the overall more successful interest business, the interest income of the Swiss banks fell slightly by 0.7 percent to CHF 172.4 billion. The high interest expenses of the big banks following the demise of Credit Suisse had a particularly negative impact on the result.
Income from the commission and services business also declined (-6.7%). By contrast, the trading business benefited from the volatile stock market year 2023 (+21.3%).
Assets under management increase
Assets under management increased by 6.9 percent to 8392 billion francs. Of this amount, 3,794 billion came from persons resident abroad and 4,597 billion from persons resident in Switzerland.
Mortgage receivables also increased by a further 2.3 percent. Cantonal banks accounted for two out of five mortgages and the big banks for just under a quarter.
Optimistic outlook
Despite the merger of CS and UBS, the number of employees in the banking sector continued to rise. The sector counted around 93,300 full-time positions in Switzerland in 2023, 1.4 percent more than in 2022.
The number of jobs was also stable until mid-2024. In the second half of 2024, half of the banks surveyed expect staff numbers to remain the same and a third expect them to increase.
For the current year, the experts surveyed by Swiss Banking expect business success to remain the same compared to the previous year. Interest business is expected to decline due to the renewed fall in interest rates. The decline should be partially or fully offset by a positive trend in commissions and services as well as the trading business.
©Keystone/SDA
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