Geneva’s banks employed 502 fewer people at the end of June compared with a year earlier as foreign wealth managers cut jobs and shifted employees to other locations, a survey by the city’s financial lobby group shows.
The number of banks in the Swiss city dropped to 133 from 140 a year earlier following acquisitions, Geneve Place Financiere said today in a report, after surveying Lombard Odier & Cie., Union Bancaire Privee and other wealth managers. Those banks employed 20,123 people at the end of June compared with 20,625 a year ago.
“It’s partly the foreign banks and partly a result of mergers,” Bernard Droux, president of Geneve Place Financiere and a managing partner at Lombard Odier, said in an interview today. “There are also job losses at smaller independent asset managers with people exiting the market as costs increase.”
Lloyd’s Banking Group Plc’s Swiss unit relocated almost 300 people, mainly in back office operations and asset management, from Geneva to Nyon in the neighboring Swiss canton of Vaud. UBP said in June that it cut about 100 jobs as it integrated ABN Amro Bank NV’s Geneva unit.
Julius Baer Group Ltd.’s acquisition of Bank of America Corp.’s Merrill Lynch wealth units outside the U.S., including a Geneva-based business, will probably result in job losses in the city, according to Droux.
“When there are roles duplicated in operations and information technology you’ve logically got to make cuts.”
Julius Baer said last week that it may cut more than 1,000 jobs as the Zurich-based bank integrates the Merrill business, while Chief Executive Officer Boris Collardi said in August that some positions will be moved from Geneva to Zurich.
Julius Baer declined to comment today on which locations would be subject to job cuts.
Profit at Geneva banks with more than 200 employees will probably decline this year and be little changed in 2013, according to Geneve Place Financiere’s report. Most firms benefited from net inflows, mainly from foreign customers, helping to increase assets under management during the first half of the year, the survey shows.
Implementing bilateral tax accords with Germany, the U.K. and Austria will hurt “results” over the next two years, according to almost 64 percent of larger banks in Geneva. Switzerland has signed bilateral agreements to impose a levy on past undeclared assets held by nationals of those three countries in Swiss offshore bank accounts and withhold tax on future investment income and capital gains from 2013.
While France is also in talks with Switzerland to review the two countries’ double-taxation agreement, withholding tax negotiations aren’t taking place.
The accord with Germany has yet to be ratified by the German Parliament amid opposition from the country’s Social Democratic Party.