The value of the assets held in custody by the Swiss banks on behalf of wealthy investors shrank by 8.5 per cent in 2001, from Sfr 3,716 billion at the end of 2000 to Sfr 3,400 billion at the end of last year, according to figures published today by the Swiss National Bank. Though the shrinkage reflects the weakness of the global equity markets, a decline in ad valorem fees contributed to the fall in the aggregate profits of the Swiss banks from Sfr 19.5 billion to Sfr 12.5 billion during the same period.
Indeed, the Swiss National Bank says the results for banks involved mainly in asset management and private banking were significantly worse than those for banks active mainly in traditional lending and deposit-taking businesses. Earnings declines amounted to 4.0 per cent for the Raiffeisen banks (cooperative banks) and to 6.0 percent for the regional and savings banks, while profits at cantonal banks fell 16.7 percent. But commission income from the securities and investment businesses and trading income declined by 15.2 per cent and 28.8 per cent respectively, contributing to a 43.6 per cent fall in profits at the big banks and a 39.1 per cent fall in profits at the private banks. Foreign banks’ profits were down 28.5 per cent.
Of the Sfr 3,400 billion of assets in custody, 55.9 per cent (2000: 55.3 per cent) were held by foreign customers. Private customers accounted for 43.8 percent of total holdings, institutional investors for 44.1 per cent and corporate customers for the remaining 12.1 percent. Swiss franc securities, which had accounted for 50.1 per cent a year earlier, contracted to 47.2 per cent, while the share of securities denominated in euros and US dollars rose slightly, to 21 per cent and 24.1 per cent respectively.