Credit Suisse crisis ramps up Swiss bank sector decline: Blick newspaper

Switzerland is no longer a banking nation as other industries contribute more to the economy, according to a prominent Swiss newspaper.

UBS Group’s takeover of Credit Suisse Group will further diminish the banking sector’s economic importance to the country, which has already shrunk to less than 5 per cent of gross domestic product (GDP) from nearly 8 per cent before the global financial crisis, newspaper Blick reported on Saturday (Apr 22).

Banking’s overall importance to the Swiss economy has been overtaken by the pharmaceutical and chemicals industry, which accounts for about 6.3 per cent of GDP.

“Growth is now taking place in other sectors,” Alexander Rathke, an economist from the KOF institute at ETH Zurich university, said in an interview with Blick.

The Swiss pharmaceutical industry, which includes companies such as Roche Holding, Novartis and Lonza Group is growing at about 5.9 per cent per year, Blick reported.

While banking is stagnating or declining, Swiss insurance companies are growing to contribute about 4.1 per cent to economic output. And commodities trading giants such as Vitol, Glencore and Cargill now account for about 8.5 per cent of Switzerland’s GDP.

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Swiss banks created value of 36.4 billion Swiss francs (S$54.4 billion) in 2021, according to the State Secretariat for Economic Affairs. Meanwhile, the Swiss luxury watch industry, which has enjoyed an unprecedented boom in demand for its products in the past two years, exported about 24.8 billion francs worth of watches in 2022. BLOOMBERG