GENEVA • Banks in Switzerland reduced their domestic workforce by 4.1 per cent in the first half as companies combined and made cost cuts to stem declining profitability, a survey by the nation's main bank association showed.
The loss totals 3,454 jobs, the Swiss Bankers Association (SBA) said in its annual industry report yesterday. The number of workers fell by 1 per cent to 103,041 last year.
"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 per cent during the period.
Switzerland is home to UBS Group and Credit Suisse Group, as well as thousands of smaller private banks and wealth managers, many of which focus on overseeing the assets of rich families living outside the country.
The Swiss have the largest share of the cross-border wealth-management market, according to the report, although foreign-controlled banks are quitting the country on concerns about profitability, regulatory costs and legal risks.
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 last year, compared with 275 at the end of 2014, according to the report. Assets under management slipped 1.3 per cent to 6.57 trillion Swiss francs (S$9.1 trillion) last year and fell further to 6.42 trillion francs by the end of this May.
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.