Banking Barometer 2017: Stability despite unfavourable environment
In 2016, the banks in Switzerland reported a total annual profit of just under eight billion Swiss francs. “In an environment where banks have to cope with negative interest rates, strict regulatory requirements and strong international competition, this can be considered a positive result”, says Martin Hess, Chief Economist at the Swiss Bankers Association (SBA). “This speaks for the resilience of the banks in Switzerland and their ability to adapt.”
An overview of the key figures for the 2016 business year:
In 2016 and the first half of 2017, the banks once again operated in a highly challenging environment. Financial institutions industry-wide are having difficulty upholding their interest rate margins, which have been shrinking continuously since 2007. As a result, certain areas of business have little room for manoeuvre left. Further to this, Brexit and the political situation in the US continue to create significant uncertainty for the Swiss banks.
Optimal framework conditions
To ensure that Switzerland remains one of the leading global financial centres in future, expedient regulation and optimal framework conditions are essential. The SBA welcomes the fact that the Banking Ordinance, which was amended by the Federal Council, takes into account the needs of new digital business models (new fintech rules). “Of note is the strong trend towards collaboration between fintech companies and banks that has been emerging recently”, says Martin Hess. “This allows both sides to benefit from each other: fintech companies offer an ideal framework for developing new business ideas and can implement these faster than established banks. By collaborating with startups, the banks can expand their service offering and realise efficiency gains.” It is important that the existing financial services providers are able to participate in the innovative fintech market subject to the same regulatory requirements as new providers. Particularly in the area of money laundering, for example, it would be extremely risky for the Swiss financial centre if the duties to be met by fintech companies were relaxed in the business with private customers.
About the Banking Barometer
The SBA’s annual Banking Barometer provides an overview of the key figures and developments in the Swiss banking centre. The study draws on data from the Swiss National Bank (SNB) as well as the results of surveys conducted at member institutions. This media release, the Banking Barometer 2017 and the presentation given by Martin Hess can also be found on our homepage. In addition to the customary content, we have prepared facts and figures relating to the banking and financial sector (including information from the current Banking Barometer) in an attractive and exportable format.