Swiss bankers log record profit fall in 2008
Profits of Swiss banks plunged a record 30 percent in 2008, hurt by major losses in the trading business.Geneva -- Profits of Swiss banks plunged a record 30 percent in 2008, hurt by major losses in the trading business, the Swiss Bankers Association said Thursday.
"The profits of the banks in Switzerland as a whole decreased last year by 30.8 percent," to CHF 48 billion (EUR 32 billion), it said in an annual report on the banking sector.
It was the biggest fall since the Swiss National Bank started keeping profit statistics more than 20 years ago, it added.
Some improvement is expected for the trading business in the second half of 2009, but the outlook for the credit business was "not very pleasant," it added in its "Banking Barometer" report.
"Developments during the first half and the outlook for the second half point to a negative performance in the credit business for 2009 as a whole," it said.
"The trading business is expected to produce a positive result and the commission and services business to be flat."
The association, which has almost 360 members from the financial industry, said that more upbeat investor sentiment in the second half could lift earnings from the trading and asset management business.
But the risk appetite evident during the boom years has not returned to most investors, so the recovery is expected to be slight, said the association.
The credit business, meanwhile, is expected to show a more gloomy outlook.
"Credit defaults caused by the economic crisis could increase, and margins will not recover quickly," it said.
"For these reasons and because the economic downturn and the rise in unemployment have still not been overcome, the credit business will face falling results," it added.
Switzerland's two biggest banks both posted record losses in 2008, with UBS losing around CHF 21 billion and Credit Suisse losing more than eight billion francs.
AFP / Expatica