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Economy and Banking Sector of Switzerland

Switzerland
Location
Central Europe
Population  (2017)
8 417 700  (+0.01%)
EU Status
not a member
Currency
CHF (Swiss franc)
Nominal GDP (2016)
596.4 bln EUR  (-0.01%)
Credit Ratings (as of Sep 2016)
AAA/Aaa
Consolidated Banking Assets (2016)
3 100.83 bln CHF  (+2.47%)
Deposit Guarantee
100 000 CHF
Number of Banks
269

Switzerland is a stable, peaceful and prosperous country, with modern market economy having low unemployment and highly skilled labor force.

Among the main sectors of Swiss economy are production of chemicals, watches, textiles, machinery, and also tourism, banking, and insurance.

Swiss neutrality and national sovereignty have fostered a stable environment where the banking sector was able to develop.

List of Banks in Switzerland
Changes in Swiss banks in 2014
Changes in Swiss banks in 2015

National Currency

Swiss Franc (CHF)

Exchange Rate

1 EUR = 1.1508 CHF (2018-02-22)

During the last 11 years EURCHF exchange rate was within the range 1.0341 - 1.6762, reaching its maximum in Oct 2007 and falling to its minimum in May 2015.

Euro to Swiss franc (EURCHF).

Chart 1. Euro to Swiss franc (EURCHF). Source: ECB.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
596.4 bln EUR  (-0.01%)72 200 EUR  (-0.01%)1.3 %  (2015: 0.8 %)

According to Eurostat, nominal GDP of Switzerland in 2016 was 596.4 bln EUR.

Switzerland underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 1.3% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in Switzerland.

Chart 2. Real GDP Growth in Switzerland. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in Switzerland was 72 200 EUR.

Switzerland has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 47.0% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Switzerland; European Union = 100.

Chart 3. GDP Per Capita at Purchasing Power Parity in Switzerland; European Union = 100.

Inflation Rate

CPI, MoM (Sep 2017)CPI, YoY (Sep 2017)CPI, Year Average (2016)
0.2 %  (Aug 2017: -0.1 %)0.8 %  (Aug 2017: 0.5 %)-0.5 %  (2015: -0.8 %)

According to Eurostat, inflation rate in Switzerland in 2016 expressed as annual percentages of average consumer prices was -0.5% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Switzerland.

Chart 4. Inflation Rate in Switzerland. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
3.3 %  (2015: 3.2 %)

Credit Ratings (as of Sep 2016)

Fitch Moody's
AAA (highest credit quality), outlook stable Aaa (prime), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Switzerland: 0.0 - 35.0%

Withholding tax rates applied on payments of interest and dividends in Switzerland are shown in Table 1.

Dividends Interest
Natural person, resident 35.0 %35.0 %
Natural person, non-resident 35.0 %35.0 %
Table 1. Withholding tax rates in Switzerland.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Switzerland: 101 Signed Agreements

Switzerland signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania
 Algeria
 Antigua and Barbuda
 Armenia
 Australia
 Austria
 Azerbaijan
 Bangladesh
 Barbados
 Belarus
 Belgium
 British Virgin Islands
 Bulgaria (Oct 2013)
 Canada
 Chile
 China
 Colombia
 Cote D'Ivoire
 Croatia
 Czech Republic
 Denmark
 Dominica
 Ecuador
 Egypt
 Estonia
 Faroe Islands
 Finland
 France
 Georgia
 Germany
 Ghana
 Greece
 Grenada
 Hong Kong
 Hungary
 Iceland
 India
 Indonesia
 Iran, Islamic Republic of
 Ireland
 Israel
 Italy
 Jamaica
 Japan
 Kazakhstan
 Korea, Republic of
 Kuwait
 Kyrgyzstan
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Macedonia
 Malaysia
 Malta
 Mexico
 Moldova, Republic of
 Mongolia
 Montenegro
 Montserrat
 Morocco
 Netherlands
 New Zealand
 Norway
 Pakistan
 Peru (Mar 2014)
 Philippines
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 Saint Kitts and Nevis
 Saint Lucia
 Serbia
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sri Lanka
 Sweden
 Tajikistan
 Thailand
 Trinidad and Tobago
 Tunisia
 Turkey
 Turkmenistan (Dec 2013)
 Ukraine
 United Arab Emirates
 United Kingdom
 United States
 Uruguay
 Uzbekistan
 Venezuela
 Vietnam

There are also several agreements between Switzerland and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Argentina (Mar 2014)
 Australia (Jul 2013)
 China (Sep 2013)
 Hungary (Sep 2013)

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 6 Signed Agreements

There are also several agreements between Switzerland and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Andorra (Mar 2014)
 Guernsey (Sep 2013)
 Isle of Man (Aug 2013)
 Jersey (Sep 2013)
 San Marino (May 2014)
 Seychelles (May 2014)

Automatic Exchange: Starts in September 2018

Switzerland signed the automatic information exchange agreement on 29 October 2015 and committed to start the automatic information exchange in September 2018.

Automatic Excnange: 39 Bilateral Agreements to Receive Information

Switzerland has signed bilateral agreements with 39 jurisdictions to automatically receive information:

 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Bulgaria
 Canada
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Finland
 France
 Germany
 Gibraltar
 Greece
 Guernsey
 Hungary
 Iceland
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Lithuania
 Luxembourg
 Malta
 Netherlands
 Norway
 Poland
 Portugal
 Romania
 Slovakia
 Slovenia
 Spain
 Sweden
 United Kingdom

Automatic Excnange: 39 Bilateral Agreements to Send Information

Switzerland has signed bilateral agreements with 39 jurisdictions to automatically send information:

 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Bulgaria
 Canada
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Finland
 France
 Germany
 Gibraltar
 Greece
 Guernsey
 Hungary
 Iceland
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Lithuania
 Luxembourg
 Malta
 Netherlands
 Norway
 Poland
 Portugal
 Romania
 Slovakia
 Slovenia
 Spain
 Sweden
 United Kingdom

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Switzerland
IGA in effect since 14 February 2013, Model 2

Switzerland has FATCA agreement with the U.S. in effect since 14 February 2013 (Intergovernmental Agreement Model 2).

Further Information

Financial Market Development

Financial Market Development
5.3 (max 7.0), 8th out of 138 countries
Banks' Soundness
6.0 (max 7.0), 13th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Switzerland is scored 5.3 out of maximum 7.0 and ranked 8th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.3 (17th place).

Financial Market Development in Switzerland.

Chart 5. Financial Market Development in Switzerland. Source: WEF.


Soundness of banks is scored 6.0 bringing Switzerland into the 13th place.

Soundness of Banks in Switzerland.

Chart 6. Soundness of Banks in Switzerland. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 CHF

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Switzerland are summarised in Table 2.

Scheme Participantsall credit institutions operating in Switzerland (including branches of foreign banks), branches of Swiss banks abroad
Eligible Depositorsprivate individuals, commercial enterprises and public-sector offices
Covered Accountscredit balances (e.g. personal accounts, savings accounts, investment accounts, salary accounts, numbered accounts, deposit accounts and current accounts)
Covered Currenciesall
Maximum Protected Amount100 000 CHF
Paid In CurrencyCHF

Table 2. Deposit guarantee scheme in Switzerland.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Swiss franc) Foreign Currency
Aaa (prime) Aaa (prime)

Local currency (Swiss franc) deposit ceiling for Switzerland is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

Banking Sector Structure

Number of Banks
269
Consolidated Assets (2016)
3 100.83 bln CHF  (+2.47%)
Recent Changes (2016)
new banks: 2, closed banks: 7

Currently there are 269 credit institutions operating in Switzerland.

In 2016 consolidated banking assets in Switzerland were 3 100.83 bln CHF. The consolidated banking assets' evolution is shown at Chart 7 below.

Consolidated banking assets in Switzerland.

Chart 7. Consolidated banking assets in Switzerland.

Recent structural changes (2011 - 2016) of the banking sector of Switzerland are summarised in Table 3.

201120122013201420152016
Number of Opened Banks222252
Number of Closed Banks017168157

Table 3. Recent structural changes in the banking sector of Switzerland.

The list of the most recently opened banks in Switzerland is provided in Table 4.

All the credit institutions operating in Switzerland can be classified into several categories. Table 5 summarises the number of banks in each category.

CategoryNumber of Banks
Big banks4
Branches of foreign banks26
Cantonal banks24
Central banks1
Foreign-controlled banks81
Institutions with a special field of business6
Other banks14
Private bankers who do not actively seek deposits from the public6
Raiffeisen banks1
Regional banks and savings banks62
Stock exchange banks44

Table 5. Number of banks by category in Switzerland.

Major Banks of Switzerland

RankNameTotal AssetsMarket Share
1 Credit Suisse AG507800.70 mln CHF16.41 %
2 UBS AG439475.88 mln CHF14.20 %
3 UBS Switzerland AG (new)294496.68 mln CHF9.52 %
4 Raiffeisen-Gruppe exkl. Notenstein Privatbank AG215262.15 mln CHF6.96 %
5 Credit Suisse (Schweiz) AG (new)213035.14 mln CHF6.88 %
6 Zürcher Kantonalbank156360.44 mln CHF5.05 %
7 PostFinance AG120378.65 mln CHF
 

Credit Suisse AG

Founded in 1856, Credit Suisse is a Swiss-based international financial company. Credit Suisse is one of the largest universal banks in Switzerland offering comprehensive advice and a broad range of retail, private, corporate banking products and services to individuals, corporate and institutional clients. On the international markets Credit Suisse offers wealth management and investment banking solutions.

Services
Retail Banking
Private Banking
Corporate Banking
Investment Banking

Retail Banking Products

Credit Suisse AG is the 1st largest bank in Switzerland in terms of total assets. In 2016 its total assets were 507,80 bln CHF, providing the bank with the market share of 16.41%. Credit Suisse AG is the 1st largest big bank in Switzerland (out of 4 banks) having market share of 34.90% amongst the banks of this category.

Credit Suisse AG is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is A (high credit quality). Long-term credit rating assigned to the bank by Moody's is A1 (upper medium grade). Credit Suisse AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

UBS AG

Founded in 1998, UBS is a Swiss-based financial company. UBS is one of the largest universal banks in Switzerland offering comprehensive advice and a broad range of retail, private, corporate banking products and services to individuals, corporate and institutional clients. On the international markets UBS is focused on providing financial solutions to wealthy, institutional and corporate clients.

UBS AG is the 2nd largest bank in Switzerland in terms of total assets. In 2016 its total assets were 439,48 bln CHF, providing the bank with the market share of 14.20%. UBS AG is the 2nd largest big bank in Switzerland (out of 4 banks) having market share of 30.21% amongst the banks of this category.

UBS AG is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is A (high credit quality). Long-term credit rating assigned to the bank by Moody's is Aa3 (high grade). UBS AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

UBS Switzerland AG

UBS Switzerland AG was established in 2015 to improve the resolvability of UBS Group in response to regulatory requirements. UBS AG's Retail & Corporate and Wealth Management businesses in Switzerland were transferred to newly founded UBS Switzerland AG.

Services
Retail Banking
Private Banking
Wealth Management
Corporate Banking

Retail Banking Products

UBS Switzerland AG is the 3rd largest bank in Switzerland in terms of total assets. In 2016 its total assets were 294,50 bln CHF, providing the bank with the market share of 9.52%. UBS Switzerland AG is the 3rd largest big bank in Switzerland (out of 4 banks) having market share of 20.24% amongst the banks of this category.

UBS Switzerland AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

Raiffeisen-Gruppe exkl. Notenstein Privatbank AG

Raiffeisen Group is a Swiss banking group consisting of about 300 local cooperative Raiffeisen banks, specializing in retail banking. Raiffeisen Group creates a framework for activities of the local Raiffeisen banks (for example IT, infrastructure, refinancing), advises and supports Raiffeisen banks in all matters as well as provides mutual liquidity pool for the Raiffeisen banks.

Services
Retail Banking

Retail Banking Products

Raiffeisen-Gruppe exkl. Notenstein Privatbank AG is the 4th largest bank in Switzerland in terms of total assets. In 2016 its total assets were 215,26 bln CHF, providing the bank with the market share of 6.96%.

Raiffeisen-Gruppe exkl. Notenstein Privatbank AG is rated by Moody's. Long-term credit rating assigned to the bank by Moody's is Aa2 (high grade). Raiffeisen-Gruppe exkl. Notenstein Privatbank AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

Credit Suisse (Schweiz) AG

Credit Suisse (Schweiz) AG was established as a wholly owned subsidiary of Credit Suisse AG and took over the banking relationships of clients domiciled in Switzerland from the parent company.

Credit Suisse (Schweiz) AG is the 5th largest bank in Switzerland in terms of total assets. In 2016 its total assets were 213,04 bln CHF, providing the bank with the market share of 6.88%. Credit Suisse (Schweiz) AG is the 4th largest big bank in Switzerland (out of 4 banks) having market share of 14.64% amongst the banks of this category.

Credit Suisse (Schweiz) AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

Zürcher Kantonalbank

Founded in 1870, Zürcher Kantonalbank is a universal bank,providing retail and corporate banking products mainly to the canton residents(natural persons and legal entities). Traditionally for cantonal banks,Zürcher Kantonalbank is especially strong in savings and mortgage products. Like most of the cantonal banks, Zürcher Kantonalbank has full state guarantee of its liabilities.

Services
Retail Banking
Corporate Banking

Zürcher Kantonalbank is the 6th largest bank in Switzerland in terms of total assets. In 2016 its total assets were 156,36 bln CHF, providing the bank with the market share of 5.05%. Zürcher Kantonalbank is the 1st largest cantonal bank in Switzerland (out of 24 banks) having market share of 28.26% amongst the banks of this category.

Zürcher Kantonalbank is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is AAA (highest credit quality). Long-term credit rating assigned to the bank by Moody's is Aaa (prime).

PostFinance AG

PostFinance AG was established 1906 as a financial services division ofSwiss Post. In 2013 PostFinance obtained its banking license. PostFinance offersretail banking products and services to private and corporate customers.

PostFinance AG is the 7th largest bank in Switzerland in terms of total assets. In 2016 its total assets were 120,38 bln CHF.

PostFinance AG participates in deposit guarantee scheme of Switzerland. This scheme covers accounts up to 100 000 CHF per bank per depositor.

Time Deposit Accounts: 48 Offers from 9 Banks

Interest Rates: 0.00 - 1.50 % p.a.
Deposit Terms: 24 - 120 months

48 time deposit accounts offers from 9 banks operating in Switzerland are currently available. The time deposit accounts terms vary from 24 month to 10 years (120 months).The interest rates are within the range 0.00 - 1.50 %.

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Highest Interest Rate Offer: Festgeld (Crédit Agricole Financements (Suisse) SA)
Interest Rate: 1.50 % p.a.
Deposit Term: 120 months

Crédit Agricole Financements (Suisse) S.A. specializes in providing retail banking products and services, specially intended for private individuals. The range of products offered by Crédit Agricole Financements (Suisse) S.A. includes current accounts, salary accounts, credit cards, savings accounts, and mortgage loans both in Switzerland and in France.

Credit Cards: 15 Offers from 3 Banks

Annual Costs: 75.00 - 220.00 CHF

15 credit cards offers from 3 banks operating in Switzerland are currently available. The annual costs of the credit cards are within the range of 75.00 - 220.00 CHF.

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Lowest Annual Costs Offer: Cembra MasterCard Premium (Cembra Money Bank AG)
Annual Costs: 75.00 CHF

Cembra Money Bank, headquartered in Zurich Altstetten, is dedicated to create financial flexibility for its customers providing "flexible solutions for individual objectives". Cembra Bank offers loans, leasing arrangements, credit cards and savings products.

Consumer Loans: 22 Offers from 3 Banks

Borrowing Rates: 5.90 - 9.95 %
Loan Terms: 6 - 84 months

22 consumer loans offers from 3 banks operating in Switzerland are currently available. The consumer loans terms vary from 6 month to 7 years (84 months).The effective borrowing rates are within the range 5.90 - 9.95 %.

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Lowest Borrowing Rate Offer: Privatkredit (Migros Bank AG)
Borrowing Rate: 5.90 %
Loan Term: 6 months

Migros Bank was founded in 1958 by Gottlieb Duttweiler. The bank operates as a subsidiary of Migros Cooperatives Federal. As a cooperaive bank Migros Bank states good customer relationships rather than profit maximization as a goal. This allows Migros Bank to offer both private and commercial customers the most important banking services of good quality at attractive conditions.