Swiss Banks held up well in pandemic year
The Swiss economy has withstood the pandemic well to date, as have the 243 banks that were operating in Switzerland at the end of 2020. They have presented solid results. Aggregate net income rose by 5.8% to CHF 69.9 bn.
This was helped significantly by a 46.7% year-on-year increase in the result from trading activities due to higher market volatility in 2020, which led to more trading by customers. The result from interest operations fell by 0.9% against a backdrop of low interest rates, while the result from commission business and services was up around 3%.
Mortgage loans as largest asset item
At the end of 2020, the balance sheet total of all banks was up 4.5% year-on-year at CHF 3,467.3 bn. The largest asset item was mortgage loans, which, at CHF 1,098.0 bn, made up 31.7% of total assets. As in the previous ten years, the banks increased their mortgage lending further in 2020 (by 3.1%). The Swiss National Bank increased the threshold factor for exempting sight deposit account balances from negative interest in order to strengthen the banks’ role as suppliers of credit. The banks’ liquid assets, meanwhile, showed a significant increase of 26.1%.
Sharp rise in sight deposits due to low interest rates and high saving rates
Amounts due in respect of customer deposits rose by a further 8.7% in 2020 and dominate the liabilities side of the banks’ balance sheets with a 56.9% share. There is a marked shift behind this overall increase: sight deposits were up almost 30% due to an unusually high saving rate, rotations and statistical effects, whereas time deposits fell by around 16% as a result of negative interest rates.
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