243 Swiss banks survive the pandemic .. 3.89 trillion balances by...


From an economic perspective, 243 Swiss banks have survived the COVID-19 pandemic so far. In 2020, it confirmed its strength, and its consolidated income rose to 69.9 billion francs ($78.5 billion), or “+5.8 percent”. This was announced by the annual conference of the Swiss Bankers Association in Geneva, in the presence of the President of the Central Bank.
The largest Swiss non-governmental organization attributed this increase mainly to the increase in profits from trading operations “+46.7 percent compared to 2019”. But the result of interest operations followed the opposite path “-0.9 percent”, while the result of commissions and services transactions increased by about 3 percent. Overall, the total profit generated by banking activity rose by 18.3% in 2020. Banks paid 1.9 billion francs ($2.13 billion) in taxes to state coffers.
Mortgages are the main assets
In 2020, the total balance sheets of all banks in Switzerland amounted to 3467.3 billion francs ($3.895 trillion), an increase of 4.5 percent compared to the end of 2019.
Mortgage loans represented nearly a third of assets (31.7%), to CHF1098.0 billion. Mortgages have been on an upward trajectory “+3.1%” for the past 10 years. At the conference attended by Al-Eqtisadiah, the Swiss National Bank (SNB) announced that in order to enhance the role of banks as credit providers, it had increased the exemption factor used to calculate holdings in deposit accounts not subject to the negative interest rate. At the same time, liquidity rose sharply (+26.1%) in banks’ balance sheets, or from CHF106.1 billion to CHF684.6 billion – a development due in particular to the liquidity requirements of Basel III.
In 2020, liabilities arising from customer deposits increased by 8.7 percent, now making up more than half of the liabilities “56.9%”, but demand deposits and term deposits show the two in opposite tracks: while the first rose by about 30 percent due to the high savings rate Exceptionally, swaps and statistical implications, the second decreased by about 16 per cent due to the low level of interest rates.
During the first phase of the epidemic, by implementing the pandemic transitional credits without delay, banks in Switzerland provided liquidity to companies that lacked it, by granting them a total of about 139 thousand loans, amounting to 17.1 billion francs “19.2 billion dollars”. Almost a quarter of the country’s 590,000 small and medium businesses have used it. The average volume of credits granted amounted to about 2.7 million francs. Of all these loans, 14,000 have already been fully repaid, with a total value of about 3 billion francs, as of August 16, 2021.
Swiss central bank figures reveal that loan provision has been working perfectly since the start of the pandemic, with the total number of bankruptcy proceedings against businesses and individuals down 6.6 per cent in 2020 year-on-year.
Stability of assets under management
At the end of 2020, total assets under management amounted to CHF7878.7 billion ($8852.4 billion – $8.852 trillion), a flat level compared to the end of 2019. While AUMs of Swiss clients increased by CHF93.2 billion, assets of clients residing abroad decreased by CHF108.0 billion. This figure put banking countries in a global market share in cross-border wealth management at 24 per cent.
For the first time in ten years, bank employment in Switzerland registered a slight recovery in 2020 (+414 full-time jobs). This was confirmed in the first half of 2021: the workforce in Swiss banks increased by about 1 per cent, but with stronger momentum abroad (+1.8 per cent) compared to Switzerland (+0.2 per cent). However, this rise in employment in the banking sector is not necessarily a reversal of the trend.
In the first half of 2021: AUM in banks increased by 6.9 per cent during the first months of the year. Between January and May, banks’ total balance sheets rose 3.0 per cent.
The main increases, on the assets side, relate to securities financing transactions as well as claims on banks. Mortgage loans have shown that they will continue their momentum in 2021. In terms of liability, customer demand deposits have increased, as have liabilities to banks.





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