April Switzerland as a location for financial services Figures

Transcription

1 April Switzerland as a location for financial services Figures

2 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 Financial services Insurance services Total financial intermediaries Added value as a percentage of GDP 11,1 10,7 10,2 Gross domestic product (GDP) Switzerland 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 in % 26,9 10,2 11,8 4,0 8,0 7,2 Germany Luxembourg Switzerland Singapore UK USA * The values for Luxembourg and the United States refer to 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).

3 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 Financial services Insurance services Activities auxiliary to financial services and insurance activities Financial sector total As a percentage of overall employment 6,2 6,3 5,9 Overall employment (second and third sector) 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 Taxes from individuals Taxes from companies Of which banks Of which insurance companies Financial sector total 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 Sources: Swiss National Bank (SNB), FSO, Swiss Financial Market Supervisory Authority (FINMA), Federal Finance Administration (FFA) and Federal Tax Administration (FTA).

4 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 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 Capital stock of banks abroad Capital stock of insurance companies abroad Total As a percentage of total Swiss capital stock abroad 20,0 19,8 20,4 Total capital stock abroad Source: SNB, Monthly Statistical Bulletin, February 2015, year-end values.

5 Bank claims against banks ( ) 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 in CHF bn Cross-border interbank transactions Domestic interbank transactions Data: SNB. Monthly Bulletin of Banking Statistics, tables 1C and 1E, year-end values.

6 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 Cantonal banks Big banks Regional banks and saving banks Raiffeisen banks Stock exchange banks Foreign-controlled banks Branches of foreign banks Private bankers Other banking institutions Total Source: SNB, Banks in Switzerland.

7 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 Domestic lending Foreign lending Total Of which domestic mortgage claims 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 Swiss custody account holders Of which private customers Of which commercial customers Of which institutional investors Foreign custody account holders Of which private customers Of which commercial customers Of which institutional investors Total Source: SNB, Monthly Statistical Bulletin, February 2015, year-end values.

8 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. 5% 6% 10% 4% 2% 3% 7% 17% 46% Balance sheet total for all banks: CHF billion 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 Data: SNB. Banks in Switzerland 2013, page A2.

9 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 Life insurers Non-life insurers Reinsurers Captives Overseen health insurance funds (supplementary health insurance) Total Source: 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 Pension funds Source: FSO, Occupational Pension Plan Statistics.

10 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 Land, buildings Mortgages Financial interests Shares and similar investments Investment funds, own shares and bonds Fixed-interest securities Loans, debt register claims Other investments Total assets 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 Cash and cash equivalents Investments with employers Bonds and medium-term notes Mortgages Shares Real estate and land Alternative investments Mixed assets Miscellaneous Total assets Of which collective assets Source: FSO, Occupational Pension Plan Statistics, year-end values.

11 5 Swiss stock exchange Trend of the equity market and its main sectors ( ) 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 * Swiss Performance Index (SPI) Banks Insurance Food and beverages Health care * Until end of January 2015 Data: SNB. Monthly Statistical Bulletin, table F7 (own indexing).

12 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 CHF bonds of Swiss borrowers, issuing value Redemptions of CHF bonds of Swiss borrowers CHF bonds of foreign borrowers, issuing value Redemptions of CHF bonds of foreign borrowers Total net issuing value 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 Swiss securities: Shares Bonds Structured products and options (domestic and foreign) Investment funds (domestic and foreign) Total Foreign securities: Shares Bonds Total Total of foreign and Swiss securities Source: SNB, Monthly Statistical Bulletin, February 2015, annual data.

13 Collective investment schemes authorised in Switzerland: number and domicile (2014) Total: Luxembourg Ireland 381 France 159 Liechtenstein 410 Other Switzerland Data: FINMA, data at end of third quarter. 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). 5% 14% Shares Bond issues 2% 12% 40% Money market in CHF Money market in foreign currencies Asset allocations 1% 26% Real estates Miscellaneous Data: SNB. Monthly Statistical Bulletin, February 2015, Table D6 2, data at end of third quarter.

14 Notes Changes in the figures reported as compared with earlier editions of this publication are generally due to revisions and are not reported individually. Rounding differences are also possible. Address for enquiries: FDF/SIF Financial Market Analysis Section Bundesgasse Bern maerkte@sif.admin.ch Phone: Fax: Imprint: Published by: State Secretariat for International Financial Matters SIF Orders and Distribution: Art. no /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