SIF KennzahlenLeporello 1 2014 WEB en(1)

April 2014 | www.sif.admin.ch

Switzerland as a location

for financial services Figures

Key figures on Switzerland as a location for financial services April 2014

1 Economic importance of the Swiss financial centre

In the past ten years, the contribution of insurance companies to added value has in-creased by two-thirds, whereas that of banks has more or less stagnated due to the recent financial crisis. Table 1 Added value of the financial sector (at current prices), in CHF mn

2003 2008 2013

Financial service activities 33 638 41 121 35 081

Insurance 17 412 23 982 28 325

Total financial intermediaries 51 049 65 103 63 407

Added value as a percentage of GDP 11,3 11,5 10,5

Gross domestic product (GDP) Switzerland 450 572 567 852 603 212Source: Federal Statistical Office (FSO) / State Secretariat for Economic Affairs (SECO), Annual aggregates of

GDP, production approach.

Share of the financial centre in GDP (2013)*

Accounting for 10,5%, 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.

* The values for Luxembourg and the United States refer to 2012.

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).

Germany Luxembourg Switzerland Singapore UK USA

in %

0

5

10

15

20

25

24,7

10,5 11,4 8,66,6

3,6


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

2003 2008 2013

Financial service activities, except

insurance and pension funding 112 900 123 500 119 400

Insurance 52 400 49 800 49 400

Activities auxiliary to financial services

and insurance activities 25 400 35 300 40 900

Financial sector total 190 600 208 700 209 600

As a percentage of overall

employment 6,1 6,2 5,9

Overall employment

(second and third sector) 3 103 400 3 374 100 3 537 200

Source: FSO, Job Statistics (estimate on the basis of sample surveys), values for the fourth quarter. Switzerlands 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

2006 2008 2010

Taxes from individuals 3 337 4 150 3 596

Taxes from companies 5 918 1 145 2 338

Of which banks 5 057 593 1 251

Of which insurance companies 861 552 1 087

Financial sector total 9 255 5 295 5 934

As a percentage of overall tax revenues 14,1 7,3 8,1

Taxes on income and assets at the level of the Confederation, the cantons and the communes 65 718 72 106 73 508

Sources: Swiss National Bank (SNB), FSO, Swiss Financial Market Supervisory Authority (FINMA), Federal Finance Administration (FFA) and Federal Tax Administration (FTA).


2 International integration of the Swiss financial centre

The financial sector contributes to Switzerlands current account surplus and

thereby to Switzerlands creditor position in relation to foreign countries.

Table 4

Nominal foreign trade contribution, in CHF bn

2010 2011 2012

Net financial service exports (banks) 14,7 13,4 13,5

Net financial service exports

(insurance companies) 4,3 4,3 4,5

Total 19,0 17,6 18,0

As a percentage of Switzerlands

current account surplus 23,2 28,6 27,1

Current account surplus 84,4 52,5 66,3Source: SNB, Swiss Balance of Payments 2012.

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

2010 2011 2012

Capital stock of banks abroad 76 77 78

Capital stock of insurance companies

abroad 119 132 138

Total 195 209 216

As a percentage of total Swiss capital

stock abroad 19,9 20,0 20,2

Total capital stock abroad 980 1 046 1 071Source: SNB, Monthly Statistical Bulletin, February 2014, year-end values.


Bank claims against banks (20032013)

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.

Data: SNB. Monthly Bulletin of Banking Statistics, tables 1C and 1E, year-end values.

in CHF bn

Cross-border interbank transactions Domestic interbank transactions

0

200

400

600

800

1 000

1 200

2003 2005 2007 2009 2011 2013


3 Banks

There has been consolidation in Switzerlands 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, as well

as stock exchange banks. Moreover, the presence of banks under foreign

control has increased recently.

Table 6

Number of banks in Switzerland

2002 2007 2012

Cantonal banks 24 24 24

Big banks 3 2 2

Regional banks and saving banks 88 76 66

Raiffeisen banks 1 1 1

Stock exchange banks 62 48 47

Foreign-controlled banks 122 122 103

Branches of foreign banks 25 30 28

Private bankers 15 14 13

Other banking institutions 16 13 13

Total 356 330 297Source: SNB, Banks in Switzerland.


The increase in the countercyclical capital buffer obliges banks to raise the

capital for residential mortgages from 1% to 2% from 30 June 2014. 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 banks credit lines (credit volumes),

in CHF bn

2011 2012 2013

Domestic lending 937 991 1 035

Foreign lending 118 126 144

Total 1 055 1 117 1 179

Of which domestic mortgage claims 784 830 865

Source: SNB, Monthly Bulletin of Banking Statistics, February 2014, 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

2011 2012 2013

Swiss custody account holders 1 950 2 188 2 329

Of which private customers 436 465 509

Of which commercial customers 184 216 197

Of which institutional investors 1 330 1 507 1 624

Foreign custody account holders 2 162 2 601 2 768

Of which private customers 546 562 562

Of which commercial customers 105 94 100

Of which institutional investors 1 512 1 945 2 107

Total 4 113 4 788 5 097Source: SNB, Monthly Statistical Bulletin, February 2014, year-end values.


Share of individual banks in the balance sheet total for banks in Switzerland (2012)

Although there are almost 300 banking institutions in the country, Switzerlands 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.

Data: SNB. Banks in Switzerland 2012, page A2.

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 2 778 billion

17%

49%4%

6%

5%

11%

3%

2%

3%


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

2002 2007 2012

Life insurers 26 26 23

Non-life insurers 118 117 123

Reinsurers 21 25 26

Captives 32 46 35

Overseen health insurance funds

(supplementary health insurance) 57 47 16

Total 254 261 223Source: FINMA, Report on the insurance market in 2012; 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

2002 2007 2012

Pension funds 3 170 2 543 2 073Source: FSO, Occupational Pension Plan Statistics.


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

2002 2007 2012

Land, buildings 37 37 41

Mortgages 29 27 31

Financial interests 57 51 59

Shares and similar investments 44 56 9

Investment funds, own shares and bonds 0 1 29

Fixed-interest securities 171 251 263

Loans, debt register claims 21 28 18

Other investments 55 59 79

Total assets 414 511 529

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

2002 2007 2012

Cash and cash equivalents 41 49 52

Investments with employers 10 11 11

Bonds and medium-term notes 148 224 237

Mortgages 22 17 14

Shares 103 168 185

Real estate and land 61 88 117

Alternative investments 5 37 41

Mixed assets 9 4 10

Miscellaneous 17 8 5

Total assets 417 605 673

Of which collective assets 73 224 313Source: FSO, Occupational Pension Plan Statistics, year-end values.


Pensions paid out (OPA) and permanent resident population in Switzerland (20062012)

Demographic change in Switzerland can also be observed in the relationship between occupational pensions paid out and the permanent resident population.

Data: FSO. Occupational pension plans in Switzerland, Key pension fund statistics 20062012 (not in English), page 5; STATPOP.

in 100 000 in mn

0 0

1

2

3

4

5

6

7

8

9

1

2

3

4

5

6

7

8

9

2006 2008 2010 2012

Occupational pensions paid out (OPA)(lhs)

Permanent resident population(rhs)

5 Swiss stock exchange

The capitalisation on the Swiss stock exchange (SIX Swiss Exchange) is

approximately twice the amount of Switzerlands GDP.

Table 13

Capitalisation on the SIX Swiss Exchange, in CHF bn

2011 2012 2013

Capitalisation of companies in the

Swiss Performance Index (SPI) 863 973 1 188

Source: SNB, Monthly Statistical Bulletin, February 2014, year-end values.


Trend of the equity market and its main sectors (20042014)

The effects of the latest financial crisis can also be seen in the development of the stock exchange data. Banks have been particularly hard hit, while insurance companies have moved in line with the overall market (SPI).

* Until end of January 2014Data: SNB. Monthly Statistical Bulletin, table F7 (own indexing).

Swiss Performance Index (SPI) Banks Insurance

Food and beverages Health care

0

50

100

150

200

250

300

2004 2006 2008 2010 2012 2014*

Capital market developments are determined by various factors. For

example, inflation, exchange rates and interest rates play a key role, as do

expectations in their regard. Aside from market forces, regulatory measu-

res can also have an influence on capital market movements.

Table 14

Net borrowing in the form of publicly issued bonds in Swiss francs

(issues on the SIX Swiss Exchange), in CHF bn

2011 2012 2013

CHF bonds of Swiss borrowers, issuing value 40 47 47

Redemptions of CHF bonds of Swiss borrowers 25 26 30

CHF bonds of foreign borrowers, issuing value 33 39 21

Redemptions of CHF bonds of foreign borrowers 47 50 45

Total net issuing value 0 10 -6Source: SNB, Monthly Statistical Bulletin, February 2014, annual data.


Securities trading is dominated by Swiss shares.

Table 15

Securities turnover on the SIX Swiss Exchange (secondary market),

in CHF bn

2011 2012 2013

Swiss securities:

Shares 823 587 702

Bonds 85 96 90

Structured products and options

(domestic and foreign) 52 32 30

Investment funds (domestic and foreign) 108 83 98

Total 1 068 798 920

Foreign securities:

Shares 3 4 7

Bonds 91 91 77

Total 94 95 85

Total of foreign and Swiss securities 1 161 893 1 004

Source: SNB, Monthly Statistical Bulletin, February 2014, annual data.


NotesChanges in the figures reported as compared with earlier editions of this

publication are generally due to revisions and are not reported individu-

ally. Rounding differences are also possible.

Additional information on the individual tables can be downloaded at

www.sif.admin.ch.

Address for enquiries:

FDF/SIF

Financial Market Analysis Section

Bundesgasse 3

3003 Bern

[email protected]

Phone: +41 31 322 60 52

Fax: +41 31 323 04 22

Imprint:

Published by:

State Secretariat for International Financial Matters SIF

Distribution:

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Art. no. 604.002.1/14Eng

April 2014

400 860329847

SIF KennzahlenLeporello 1 2014 WEB en(1)

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