(Bloomberg) -- Banks in Switzerland reduced their domestic workforce by 4.1 percent in the first half as companies combined and made cost cuts to stem declining profitability, a survey by the nation’s main bank association showed.
The loss totals 3,454 jobs, the Swiss Bankers Association said in its annual industry report on Thursday. The number of workers fell by 1 percent to 103,041 in 2015.
“The continued low interest rate environment and strong competition are leading to significant pressure on margins, ” the SBA said in the report. “This pressure is further compounded by increasing costs.”
The first half was marked by economic and geopolitical uncertainties and market volatility that weighed on investor sentiment, the SBA said. Trading volume decreased 8.7 percent during the period.
Switzerland is home to UBS Group AG and Credit Suisse Group AG, as well as thousands of smaller private banks and wealth managers, many of which focus on overseeing the assets of rich families living outside the country. The Swiss have the largest share of the cross-border wealth-management market, according to the report, although foreign-controlled banks are quitting the country on concerns about profitability, regulatory costs and legal risks.
The number of banks operating in the country fell for at least the 10th straight year, led by foreign company exits. There were 266 at the end of 2015, compared with 275 at the end of 2014, according to the report. Assets under management slipped 1.3 percent to 6.57 trillion Swiss francs ($6.68 trillion) in 2015 and fell further to 6.42 trillion francs by the end of May this year.
“The high density of regulation and the ensuing compliance costs are weighing heavily on the banks and are compromising Switzerland’s position in the international competition between locations,” the SBA said.
While lenders are consolidating in Switzerland, many continue to chase growth in faster-growing emerging-market regions such as Asia. Some are adding jobs in European Union countries to bypass restrictions on serving European clients directly from Switzerland. The banks boosted headcount outside the country by a net 6,700 in the first half, according to the report.
Two thirds of banks that responded to the SBA’s survey said they expect employment levels to remain unchanged in the second half of the year.
To contact the reporter on this story: Giles Broom in Geneva at email@example.com. To contact the editors responsible for this story: Neil Callanan at firstname.lastname@example.org, Ross Larsen, Andrew Blackman
©2016 Bloomberg L.P.