April 2015 | Switzerland as a location ...€¦ · Data: German Federal Statistical Office, Statistics Portal ... Of which private customers 562 562 557 ... Swiss Performance Index

April 2015 | www.sif.admin.ch

Switzerland as a location

for financial services Figures

Key figures on Switzerland as a location for financial services – April 2015

1 Economic importance of the Swiss financial centre

In the past ten years, the contribution of insurance companies to added value has increased by fifty per cent, whereas that of banks has more or less stagnated due to the global financial crisis. Table 1 Added value of the financial sector (at current prices), in CHF mn

2004 2009 2014

Financial services 34 653 38 046 36 875

Insurance services 19 560 24 850 29 202

Total financial intermediaries 54 213 62 896 66 077

Added value as a percentage of GDP 11,1 10,7 10,2

Gross domestic product (GDP) Switzerland 489 369 587 061 648 016 Source: Federal Statistical Office (FSO) / State Secretariat for Economic Affairs (SECO), Annual aggregates of

GDP, production approach.

Share of the financial centre in GDP (2014)*

Accounting for 10,2%, Switzerland's financial centre makes a significant contribution to GDP. By international standards, this is slightly higher than in other major financial centres, but considerably less than in Luxembourg.

* The values for Luxembourg and the United States refer to 2013.

Data: German Federal Statistical Office, Statistics Portal – Grand Duchy of Luxembourg, FSO/SECO (Switzerland), Singapore Department of Statistics, Office for National Statistics (UK), Bureau of Economic Analysis (USA).

Germany Luxembourg Switzerland Singapore UK USA

in %

0

5

10

15

20

25

30

4,0

26,9

11,88,0 7,2

10,2


The growth in employment was driven primarily by a significant increase in non-core financial centre jobs. Table 2 Employment in the financial sector, in full-time equivalents

2004 2009 2014

Financial services 113 100 124 000 118 500

Insurance services 52 300 50 000 49 200

Activities auxiliary to financial services

and insurance activities 25 700 37 300 42 200

Financial sector total 191 200 211 300 209 900

As a percentage of overall

employment 6,2 6,3 5,9

Overall employment

(second and third sector) 3 100 900 3 356 200 3 569 900

Source: FSO, Job Statistics, values for the fourth quarter. Switzerland‘s financial centre makes a significant contribution to the tax revenues of the Swiss economy. Table 3 Financial sector: taxes from individuals and companies, in CHF mn

2008 2010 2012

Taxes from individuals 2 545 2 531 2 636

Taxes from companies 1 145 2 338 3 073

Of which banks 593 1 251 1 543

Of which insurance companies 552 1 087 1 530

Financial sector total 3 690 4 869 5 709

As a percentage of overall tax revenues 5,0 6,5 7,4

Taxes on income and assets at the level of the Confederation, the cantons and the communes 73 855 74 722 77 273

Sources: Swiss National Bank (SNB), FSO, Swiss Financial Market Supervisory Authority (FINMA), Federal Finance Administration (FFA) and Federal Tax Administration (FTA).


2 International integration of the Swiss financial centre

The financial sector contributes to Switzerland‘s current account surplus and

thereby to Switzerland‘s creditor position in relation to foreign countries.

Table 4

Nominal foreign trade contribution, in CHF bn

2011 2012 2013

Net financial service exports (banks) 13,4 13,5 17,4

Net financial service exports

(insurance companies) 4,3 4,5 5,0

Total 17,6 18,0 22,4

As a percentage of Switzerland‘s

current account surplus 28,6 27,1 32,9

Current account surplus 52,5 66,3 68,0 Source: SNB, Swiss Balance of Payments 2012; Monthly Statistical Bulletin, February 2015, annual data.

Swiss foreign direct investment abroad is high by international standards

and a significant part comes from banks and insurance companies.

Table 5

Direct investments of banks and insurance companies abroad,

in CHF bn

2011 2012 2013

Capital stock of banks abroad 77 79 90

Capital stock of insurance companies

abroad 132 138 128

Total 209 217 219

As a percentage of total Swiss capital

stock abroad 20,0 19,8 20,4

Total capital stock abroad 1 044 1 093 1 073 Source: SNB, Monthly Statistical Bulletin, February 2015, year-end values.


Bank claims against banks (2004−2014)

Compared with domestic transactions, cross-border interbank transactions posted very dynamic growth. The leveraging before the latest financial crisis is clearly visible, as is the deleveraging that took place after the outbreak of the crisis.

Data: SNB. Monthly Bulletin of Banking Statistics, tables 1C and 1E, year-end values.

Cross-border interbank transactions Domestic interbank transactions

in CHF bn

0

100

200

300

400

500

600

700

800

900

1000

2004 2006 2008 2010 2012 2014


3 Banks

There has been consolidation in Switzerland‘s banking sector over the

past ten years. This structural change is evident particularly in the decline

of 25% each in the number of regional banks and savings banks, and

foreign-controlled banks.

Table 6

Number of banks in Switzerland

2003 2008 2013

Cantonal banks 24 24 24

Big banks 3 2 2

Regional banks and saving banks 83 75 64

Raiffeisen banks 1 1 1

Stock exchange banks 55 48 47

Foreign-controlled banks 122 123 93

Branches of foreign banks 26 31 27

Private bankers 15 14 11

Other banking institutions 13 9 14

Total 342 327 283 Source: SNB, Banks in Switzerland.


Since 30 June 2014, the increase in the countercyclical capital buffer has

obliged banks to raise the capital for residential mortgages from 1% to

2%. This should help maintain, or further increase, the resilience of the

banking sector to a correction in the imbalances on the mortgage and real

estate markets.

Table 7

Effective utilisation of the bank‘s credit lines (credit volumes),

in CHF bn

2012 2013 2014

Domestic lending 991 1035 1 066

Foreign lending 126 144 157

Total 1 117 1 179 1 223

Of which domestic mortgage claims 830 865 897

Source: SNB, Monthly Bulletin of Banking Statistics, February 2015, year-end values.

The high volume of bank securities holdings reflects the prominent role

of asset and wealth management in the Swiss financial centre.

Table 8

Securities holdings in client bank accounts (domestic and foreign

custody account holders), in CHF bn

2012 2013 2014

Swiss custody account holders 2 171 2 329 2 564

Of which private customers 465 509 539

Of which commercial customers 199 197 191

Of which institutional investors 1 507 1 624 1 835

Foreign custody account holders 2 601 2 768 3 001

Of which private customers 562 562 557

Of which commercial customers 94 100 82

Of which institutional investors 1 945 2 107 2 362

Total 4 771 5 097 5 565 Source: SNB, Monthly Statistical Bulletin, February 2015, year-end values.


Share of individual banks in the balance sheet total for banks in Switzerland (2013)

Although there are almost 300 banking institutions in the country, Switzerland’s banking scene is dominated by the two big banks. This can be seen, for example, in the fact that the two big banks account for around half of the entire balance sheet total.

Data: SNB. Banks in Switzerland 2013, page A2.

Cantonal banks

Big banks

Regional banks and savings banks

Raiffeisen banks

Stock exchange banks

Foreign-controlled banks

Branches of foreign banks

Private bankers

Other banks

Balance sheet total for all banks: CHF 2 849 billion

17%

46%4%

6%

5%

10%

3%

2%

7%


4 Insurance companies and pension funds

The Swiss Financial Market Supervisory Authority (FINMA) supervises

insurance companies in Switzerland. Health insurers are also subject to

FINMA supervision for their supplementary health insurance operations.

Table 9

Number of overseen insurance companies in Switzerland

2003 2008 2013

Life insurers 26 26 23

Non-life insurers 116 122 124

Reinsurers 21 28 28

Captives 39 42 34

Overseen health insurance funds

(supplementary health insurance) 57 44 14

Total 259 262 223Source: FINMA, Report on the insurance market in 2013; private insurance companies in Switzerland;

annual reports.

Consolidation can be observed not only in the banking sector, but also

among pension funds.

Table 10

Number of pension funds in Switzerland

2004 2009 2013

Pension funds 2 935 2 351 1 957 Source: FSO, Occupational Pension Plan Statistics.


Despite the low interest rate environment at present, fixed-interest securities

have gained importance as an asset class for insurers over the past ten years.

Table 11

Capital investments of Swiss life insurance, non-life insurance

and reinsurance companies by investment category, in CHF bn

2003 2008 2013

Land, buildings 37 36 42

Mortgages 30 27 32

Financial interests 54 60 58

Shares and similar investments 36 8 12

Investment funds, own shares and bonds 0 21 33

Fixed-interest securities 197 226 272

Loans, debt register claims 22 19 18

Other investments 58 87 72

Total assets 434 484 539

Source: FINMA, capital investments of all insurance companies, year-end values.

Over the past ten years, collective assets have become considerably more

important in the capital allocation of pension funds.

Table 12

Capital investments of Swiss pension funds by investment

category, in CHF bn

2004 2009 2013

Cash and cash equivalents 44 48 58

Investments with employers 18 10 14

Bonds and medium-term notes 176 226 242

Mortgages 18 16 14

Shares 131 157 208

Real estate and land 70 96 123

Alternative investments 13 33 44

Mixed assets 5 6 12

Miscellaneous 8 6 5

Total assets 484 598 720

Of which collective assets 120 241 358 Source: FSO, Occupational Pension Plan Statistics, year-end values.


Trend of the equity market and its main sectors (2005−2015)

The low interest rate environment in recent years has made investments on the stock exchange relatively more attractive. With the exception of banks, many sectors recorded positive developments in their basket of shares since the onset of the global financial crisis.

* Until end of January 2015Data: SNB. Monthly Statistical Bulletin, table F7 (own indexing).

Swiss Performance Index (SPI) Banks Insurance

Food and beverages Health care

0

50

100

150

200

250

300

350

2005 2007 2009 2011 2013 2015*

5 Swiss stock exchange


Capital market developments are determined on the one hand by market

forces (e.g. inflation, exchange rates and interest rates); on the other,

regulation can also have an influence.

Table 13

Net borrowing in the form of publicly issued bonds in Swiss francs

(issues on the SIX Swiss Exchange), in CHF bn

2012 2013 2014

CHF bonds of Swiss borrowers, issuing value 47 47 49

Redemptions of CHF bonds of Swiss borrowers 26 30 26

CHF bonds of foreign borrowers, issuing value 39 21 25

Redemptions of CHF bonds of foreign borrowers 50 45 40

Total net issuing value 10 -6 9

Source: SNB, Monthly Statistical Bulletin, February 2015, annual data.

Securities trading is dominated by Swiss shares.

Table 14

Securities turnover on the SIX Swiss Exchange (secondary market),

in CHF bn

2012 2013 2014

Swiss securities:

Shares 587 702 834

Bonds 96 90 88

Structured products and options

(domestic and foreign) 32 30 27

Investment funds (domestic and foreign) 83 98 98

Total 798 920 1 047

Foreign securities:

Shares 4 7 11

Bonds 91 77 91

Total 95 85 102

Total of foreign and Swiss securities 893 1 004 1 148

Source: SNB, Monthly Statistical Bulletin, February 2015, annual data.


Collective investment schemes authorised in Switzerland: number and domicile (2014)

The most widespread collective investment schemes in Switzerland are from Luxembourg (market share over 50%) and those from Switzerland (market share just under 20%). Two thirds of the latter are invested in shares and bonds (see below).

Data: FINMA, data at end of third quarter.

Data: SNB. Monthly Statistical Bulletin, February 2015, Table D62, data at end of third quarter.

0500

1 0001 5002 0002 5003 0003 5004 0004 5005 000

SwitzerlandOtherLiechtensteinFranceIrelandLuxembourg

4 426

1 184

381 159

Total: 8 014

410

1 454

Miscellaneous

Real estates

Asset allocations

Money market in foreign currencies

Money market in CHF

Bond issues

Shares

26%

40%

14%

5%

12%

2%

1%


NotesChanges in the figures reported as compared with earlier editions of this

publication are generally due to revisions and are not reported individu-

ally. Rounding differences are also possible.

Address for enquiries:

FDF/SIF

Financial Market Analysis Section

Bundesgasse 3

3003 Bern

[email protected]

Phone: +41 58 462 60 52

Fax: +41 58 463 04 22

Imprint:

Published by:

State Secretariat for International Financial Matters SIF

Orders and Distribution:

www.bundespublikationen.admin.ch

Art. no. 604.002.1/15Eng

April 2015

This publication appears in English, French, German and Italian. It can also

be downloaded as a PDF file together with additional information on the

individual tables at www.sif.admin.ch.

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April 2015 | Switzerland as a location ...€¦ · Data: German Federal Statistical Office, Statistics Portal ... Of which private customers 562 562 557 ... Swiss Performance Index