Banks operating in Switzerland continue to grow. However, there are structural changes taking place in the Swiss financial sector. As largest banks slowly lose market share, the position of regional and cantonal banks is improving. The share of domestic assets is growing while the share of foreign assets decreases, which could be attributed to increasing regulatory and compliance requirements. It could be also a warning sign that the role of Switzerland among global banking centers is eroding.
The profitability of banks in Switzerland improved significantly in 2015. However, the key driver was extraordinary result and not the ordinary business. By contrast, the cost-to-income ratio, reflecting the core banking activity has deteriorated to above 70%. Banks look for solutions to improve productivity by a range of measures including higher automation and alternative distribution channels. In the same time the physical distribution network and the number of employees are being gradually reduced.
Raiffeisen Group and cantonal banks from Luzern and St. Gallen were the fastest growing banks among TOP 12 institutions, in terms of assets in 2015.
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Research notes - Swiss banks, 2016
