After six difficult months with lower revenues and job cuts, banking officials from Geneva are extremely concerned about the competitiveness of the local financial centre.
“The competitiveness of the financial sector cannot be decreed,” Yves Mirabaud, president of the Geneva Financial Center (GFC), told reporters at its annual press conference on Tuesday.
Recent studies suggest that Geneva is losing influence compared to other financial centres, the lobby group said. Geneva dropped eight places to 23rd position in the Global Financial Services Index (GFCI)external link, published last month by the Z/Yen Group in London and the China Development Institute in Shenzhen. London, New York, Hong Kong, Singapore and Tokyo remain the five leading global financial centres, with Zurich falling from sixth to ninth position.
GFC is worried in particular over uncertainties surrounding the free movement of people in Europe, access to foreign markets and corporate taxation.
Like other Swiss cantons, the Geneva authorities propose to do away with special corporate tax regimes and establish equal treatment for all companies, moving to a single corporate tax rate of approximately 13%.
Mirabaud expressed concerns that any failure of this tax reform, known as RIE III, “would have a devastating impact on jobs”.
And without equal access to European financial markets there is a clear risk of banks and firms moving staff and offices from Geneva, said GFC director Edouard Cuendet.
GFC’s economic survey for 2016-2017 indicates a worsening business environment, especially for big banks. Almost one-third of large banks saw their net profits fall by 8-14% in the first six months of 2016. For over a quarter of all medium-sized institutions, profits dropped by over 15%. Smaller banks were slightly less affected.
Many large banks say the negative trend should continue for the rest of the year with job cuts expected. But over 53% of medium-sized banks say they will actually increase their staff numbers. The situation should remain stable in small institutions.
Geneva’s banking and finance industry employs some 37,000 people, of whom 18,000 work in banks. Annually, it contributes 15% to Geneva’s gross domestic product (GDP).
swissinfo.ch with agencies