- Costs, tax scrutiny lessen Swiss banking's foreign appeal
- Financial center is `resilient,' Nicolas Pictet says
Banking jobs in Geneva slipped to the lowest level since the 2008 financial crisis amid regulatory pressures, tax scrutiny and consolidation in the Swiss finance industry, according to lobby group Geneva Financial Center.
Employees at banks in the city fell 3 percent to 18,855 in the 12 months through August, after peaking at 20,753 in 2012. This year’s total is about 150 jobs less than seven years ago, just before Lehman Brothers Holdings Inc. collapsed.
“We are facing some very key challenges,” Nicolas Pictet, president of the lobby group, said in an interview after a media briefing in Geneva Tuesday. “The number of employees has remained very stable. It shows a very strong resilience of Geneva as a financial center despite all the negative waves that we have to face.”
Jobs at foreign-owned banks declined more than 7 percent over the 12-month period, according to Geneva Financial Center. A number of international lenders exited Swiss private banking in recent years amid rising costs and scrutiny of undeclared offshore accounts. Royal Bank of Scotland Group Plc and Royal Bank of Canada sold Swiss wealth units this year.
A combination of more regulation, the new “tax paradigm” and “negative markets” contributed to the job decline since the crisis, Pictet, a managing partner at his family’s bank, Pictet & Cie. Group SCA, said in the interview. The number of banks in the city fell to 119 from 140 since 2008.
The U.S. has led a crackdown on tax evasion through undeclared offshore accounts in the Alpine country, while France, Belgium and Germany also opened legal probes.
Most cross-border clients have already taken steps to become tax compliant in their countries of residence and there won’t be a sudden rush of withdrawals before the Swiss government begins exchanging information automatically with other tax authorities starting from 2018, Pictet said.
Most banks and independent asset managers in Geneva reported the city had become less attractive for European Union and North American clients, according to an annual survey of the industry by Geneva Financial Center. Geneva’s wealth management firms are still receiving client inflows from locations in Asia, the Middle East and South America.
Most firms expect to keep headcount unchanged or increase it next year. Banks investing in operations abroad are prioritizing Luxembourg, according to the poll.