«Swiss banks must adapt to a demanding environment»  

Martin, how does the Swiss Banking Outlook differ from similar surveys carried out by a few financial institutions? 

Its conclusions are based on a survey of chief economists and CIOs at SBA member institutions. While some banks produce their own forecasts, the Swiss Banking Outlook presents a consensus forecast for key indicators for the financial centre. As a result, the outlooks that emerge are the most widely supported and therefore the most meaningful within the industry. 

…and what surprised you most about the results of the latest Swiss Banking Outlook? 

First of all – it's not a surprise, but it's obvious: the uncertainties on the global markets, particularly the geopolitical tensions, are reflected in the exceptionally disparate forecasts among the respondents. The impact of the United States, for example, is difficult to assess, at a time when the new administration is simultaneously working to reduce sanctions and increase tariffs. Among experts, confidence dominates in some cases, scepticism in others. What is very surprising is that a number of them believe that the SNB's negative interest rates could well make a comeback by the end of the year. This would squeeze the banks' interest margins even tighter. Let's hope it doesn't come to that. 

You just mentioned it: the new Swiss Banking Outlook paints a mixed picture of the Swiss economy's development. What do you think of the current forecasts? 

The Swiss economy appears resilient overall, given that our neighbouring countries, which are important markets, are facing a growth slump. Swiss GDP growth, which is expected to reach 1.3% in 2025 and 1.5% in 2026, remains moderately positive. The expected inflation rate remains low, as do interest rates. In principle, this has a stabilising effect on the economy. But at the same time, there will also be challenges to be faced: unemployment is expected to rise slightly. In the financial sector, some banks have already announced job cuts. However, given the lack of specialised labour, the employees concerned should have little trouble remaining active in the labour market, as they are well trained. 

The forecast for interest rate developments is a key aspect of the analysis. Why is it important for banks? 

The SNB is expected to reduce its key interest rate to 0.25% by mid-2025 and, as I said, many experts believe that a return to zero interest rate policy cannot be ruled out. This would be a fundamental change for the banking industry. But regardless of the level at which interest rates actually settle, experts are forecasting a decline in the results of interest operations. The main explanation lies in the erosion of the interest margin. In addition, credit growth is expected to be below average due to the sluggishness of the construction sector, but also to a more restrictive policy on lending. The results recorded in other areas of activity – particularly commission transactions and the provision of services – will be decisive in offsetting this trend. In this area, around half of those surveyed are expecting stable or rising revenues. 

Assets under management from abroad should continue to grow. How do you explain this positive trend? 

The forecasts for assets under management confirm that Switzerland remains an attractive financial centre. For 2025, experts are expecting growth of between 2.5% and 5%, which is in line with long-term forecasts. Market trends are favourable and international investors' confidence in Switzerland's stability is traditionally high in times of uncertainty. Net inflows of funds from abroad should remain positive, between 1% and 2%. 

Finally, what does the future hold for the Swiss banking centre? 

Switzerland's stability, the high level of confidence in our financial system and the banks' capacity for innovation remain our major assets. Switzerland remains strongly positioned in the areas of asset management and sustainable finance in particular. But it is no less important to increase profitability. If banks react to changes flexibly and with cost control, and if regulation does not impose unnecessary constraints, the financial centre will emerge stronger from this period. 

Thank you very much for this interview, Martin.