Swiss banks under the spotlight

The past week has seen some Swiss banks facing criticism once more. The Credit Suisse Group and three other banks were criticised by the Swiss banking watchdog for accepting funds from the family of the late Nigerian dictator, Sani Abacha.

In a report released on Monday, the Swiss Federal Banking Commission accused the banks of serious “violations and organisational shortcomings” for failing to detect and reject deposits from what it said were “dubious” sources.

Banks remained in the news on Thursday as The Financial Action Task Force on Money Laundering, an inter-governmental body based in Paris, announced it was to make a third examination of Switzerland as a financial centre.

The Task Force, of which Switzerland is a member, is to examine in particular the role of Swiss banks in accepting the Abacha family funds.

Results also attracted a lot of attention as Berne based telecom group Ascom saw profits grow 54 per cent to SFr60 million ($33.9 million). Healthy demand also pushed numbers higher at the Swiss Federal Railways, with profit over the first half coming in at SFr81 million.

The world’s largest inspection and testing group, the Geneva-based Société Générale de Surveillance saw half-year net profits rise 34 per cent to SFr58 million. However, the company played down earnings prospects for the year, saying revenue would be hit by “increased business development expenditure, including costs associated with e-commerce, and the non-renewal of a pre-shipment contract with the Philippines”.

Swiss technology group Unaxis, formerly Oerlikon-Bührle, managed to move its results back into positive territory. In the first six months, the Zurich-based company revealed a profit of SFr73 million, compared to a loss of SFr18 million a year ago.

Unaxis put the improvement down to its new strategy of focusing on the high-technology sector.

Anglo-Swiss insurance giant Zurich Financial Services disappointed the market with a lower than expected 21 per cent increase in normalised net profits at $1.1 billion. However the group’s net profit rate, which includes capital fluctuations, actually dropped back by 24 per cent to $1.3 billion over the same period, as Zurich Financial Services cut back on capital gains.

Holderbank, one of the world’s leading suppliers of cement, reported that net profit for the first half of the year rose by 13 per cent to SFr352 million. And Lausanne based international advertising company, Publisuisse, reported soaring half-year profits compared to the comparable period last year. Net income rose by 135 percent to SFr117 million.

On the economics front, unemployment sunk to a 10-year low in Switzerland, although the rate of decline was slowing, according to figures released by the State Secretariat for the Economy.

At the end of August, there were 1,432 fewer people unemployed than at the end of July. The rate of unemployment remained unchanged at 1.8 per cent.

by Tom O’Brien