ZURICH, SWITZERLAND – Put the Swiss banking crisis in the past tense, with the Swiss National Bank’s new report on the state of Swiss banking showing that in 2010 the gross profit for the country’s 320 banks was CHF18.9 billion, a roughly 50 percent improvement over 2009.
The aggregate balance sheet for all Swiss banks in 2010 rose by 1.7% to CHF 2.71 billion.
The overall figures hide a significant difference, with 53 banks showing a loss, four more than in 2009. The loss was mainly due to a “substantial depreciation of tangible assets amounting to CHF 9.4 billion”, says the SNB.
The big banks played a key role in the improvement, says the SNB in a statement issued Thursday 16 June. The data “shows that this result was significantly influenced by the big banks, which reported improved trading income, higher extraordinary income and an increase in depreciation of tangible assets.”
Swiss franc’s appreciation reduced value of foreign balance sheet items
The appreciation of the Swiss franc played a significant role, mainly affecting foreign balance sheet items, fiduciary funds and securities holdings, all of which declined as a result. Some 90 percent of foreign balance sheet items are denominated in foreign currencies, points out the SNB, and they thus received a lower valuation.
“Balance sheet totals increased at banks with a domestic business focus, in particular. Domestic balance sheet items rose accordingly – both for assets (+5.2%) and liabilities (+3.0%). Exchange rate developments resulted in lower valuations for foreign currency items and this was reflected in foreign assets (down by 1.1%) and foreign liabilities (up by 0.6%). About 90% of foreign items are denominated in foreign currencies, half of them in US dollars and one-quarter in euros.”
Staff up slightly in Switzerland, more so abroad
Swiss banks hired 7.9 percent more people in 2010, outside the country, bringing the total of overseas staff to more than 24,000. Inside Switzerland, Swiss big banks continue to reduce staff, while cantonal banks have been hiring: 454 jobs were added, overall, in 2010, bringing the total number of Swiss bank employees in Switzerland to 108,000.