Swiss banks cut jobs by more than 4 percent
(1 September 2016 – Switzerland) Swiss banks reduced their domestic workforce by 4.1 percent in the first half of 2016, in a bid to stem declining profitability, a survey by the nation’s main bank association showed.
According to the Swiss Bankers Association (SBS), the job cuts totalled 3,454.
“The continued low interest rate environment and strong competition are leading to significant pressure on margins,” the SBA said in the report. “This pressure is further compounded by increasing costs.”
The first half was marked by economic and geopolitical uncertainties and market volatility that weighed on investor sentiment, the SBA said. Trading volume decreased 8.7 percent during the period.
The number of banks operating in the country fell for at least the 10th straight year, led by foreign company exits. There were 266 at the end of 2015, compared with 275 at the end of 2014, according to the annual report. Assets under management slipped 1.3 percent to 6.57 trillion Swiss francs ($8.85 trillion) in 2015 and fell further to 6.42 trillion francs by the end of May this year.
“The high density of regulation and the ensuing compliance costs are weighing heavily on the banks and are compromising Switzerland’s position in the international competition between locations,” the SBA said.
While lenders are consolidating in Switzerland, many continue to chase growth in faster-growing emerging-market regions such as Asia. Some are adding jobs in European Union countries to bypass restrictions on serving European clients directly from Switzerland. The banks boosted headcount outside the country by a net 6,700 in the first half, according to the report.
Two thirds of banks that responded to the SBA’s survey said they expect employment levels to remain unchanged in the second half of the year.
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