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 Over the past ten years, the contribution of insurance companies to added value has increased by more than a third, whereas that of banks has fallen due to the global financial crisis. Table 1 Nominal added value, in CHF mn Financial services Insurance services Financial sector total in % of GDP Gross domestic product (GDP) Switzerland Source: Federal Statistical Office (FSO) / State Secretariat for Economic Affairs (SECO), Annual aggregates of GDP, production approach, annual data. Share of the financial centre in GDP (2015)* Accounting for 9.5%, 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 % 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 Over the last decade, the growth in employment was driven primarily by an increase in non-core financial centre jobs. Table 2 Jobs, in full-time equivalents Financial services Insurance services Activities auxiliary to financial services and insurance activities Financial sector total in % of overall employment 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 Taxes, in CHF mn Taxes from individuals Taxes from companies Of which banks Of which insurance companies Financial sector total in % of overall tax revenue 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 exports financial services Net exports insurance services Financial sector total in % of Switzerland s current account surplus Current account surplus Source: SNB data portal ( annual data. Swiss foreign direct investment abroad is relatively high by international standards. The financial sector makes a significant contribution to this. Table 5 Direct investments 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 Total capital stock abroad Source: SNB data portal ( 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 data portal ( 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 in the decline of 25% each in the number of regional banks and savings banks, and foreigncontrolled banks. The number of private bankers has even been halved. Table 6 Number of banks 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, table 3.

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 banks credit lines (credit volumes), in CHF bn Domestic lending Foreign lending Total Of which domestic mortgage claims Source: SNB data portal ( year-end values. The high volume of bank securities holdings reflects the prominent role of asset and wealth management in Switzerland s financial centre. Table 8 Securities holdings in client bank accounts, 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 data portal ( year-end values.

8 Share of individual banks in the balance sheet total for banks in Switzerland (2014) Although there are 275 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. 2% 0% 10% 7% 6% 4% 6% 17% 48% 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 billion Data: SNB. Banks in Switzerland 2014, page A2, year-end values.

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 insurance companies Life insurers Non-life insurers Reinsurers Captives Overseen health insurance funds (supplementary health insurance) Total Source: FINMA, Report on the insurance market in 2014 (direct insurers); 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 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 stock market investments more attractive in relative terms. With the exception of banks, many sectors have 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 * Up to end of January 2016 Data: SNB data portal ( (month-end values; own indexing).

12 Developments on the primary market, i.e. regarding bond issuance, are determined on the one hand by the (re)financing needs of companies and governments; on the other, absolute financing costs (the level of interest rates), as well as their relation to other important capital markets in the various currency areas, also play a role. Table 13 Net CHF capital market borrowing in the form of publicly issued bonds on the SIX Swiss Exchange, in CHF bn Bonds of Swiss borrowers Issues Redemptions Bonds of foreign borrowers Issues Redemptions Total net issuing value Source: SNB data portal ( annual data The secondary market, i.e. securities trading, is dominated by Swiss shares. Table 14 Securities turnover on the SIX Swiss Exchange, in CHF bn Swiss securities: Shares Bonds Structured products and options (domestic and foreign) Investment funds (domestic and foreign) Subtotal Foreign securities: Shares Bonds Subtotal Total Source: SNB data portal ( annual data.

13 Collective investment schemes authorised in Switzerland: number and domicile (2015) Total: Luxembourg Ireland 343 France 164 Liechtenstein 384 Other Switzerland Data: FINMA, data at the 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% 13% Shares Bond issues 2% 12% 40% Money market in CHF Money market in foreign currencies Asset allocations 1% 27% Real estates Miscellaneous Data: SNB data portal ( data at the end of third quarter 2015.

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 Analyses Section Bundesgasse Bern maerkte@sif.admin.ch Phone: Fax: Imprint: Published by: State Secretariat for International Financial Matters SIF Orders and Distribution: Art. no /16Eng April 2016 This report is published on a semi-annual basis in the three official languages of German, French and Italian, as well as in English and Chinese. It can also be downloaded as a PDF file together with additional information on the individual tables at