GENEVA Jan 10 Swiss banks are starting
2012 in a much more pessimistic frame of mind than the
relatively positive note on which they began 2011, according to
a survey of 120 banks published on Tuesday by Ernst & Young
The "Bank Barometer 2012" was conducted by telephone in
December and included private, regional, cantonal and foreign
banks operating in Switzerland. It excluded the two biggest
Swiss banks, UBS AG and Credit Suisse Group AG
The majority of banks, or 55 percent of those surveyed,
forecast a slight downturn in financial markets, the same number
that expected a slight improvement a year ago.
In the 2011 survey, none of the banks had been willing to
say they viewed the outlook "very negatively", but in the latest
survey 3 percent said just that, while none described the likely
situation for the coming year as an outright "positive".
Overall they saw tougher competition and a worsening
business environment than a year ago, although a majority,
especially regional and cantonal banks, still said their
business was developing "positively" or "somewhat positively".
"Banks are probably now being more realistic in their
assessment of prospects compared to the far more optimistic
views a year ago," Iqbal Khan, a partner in Ernst & Young's
banking & capital markets division, said in a statement.
"Even though opinions are more modest, we can see that Swiss
banks have fared well in the global financial crisis and
European debt crisis so far."
Among the findings, 72 percent of the banks saw a negative
or very negative impact from increasing regulation of the
banking sector globally, up from 50 percent a year ago.
And optimism about passing on the costs of increased
regulation has evaporated. A year ago, one in three banks
thought they could pass at least half the cost to their clients,
whereas now almost two-thirds of banks expect to pass on less
than a quarter of the cost.
Regional and cantonal banks saw an increased likelihood of a
fundamental overhaul of the way bankers are paid, although
private and foreign banks saw less chance of that than a year
ago. However, unlike a year ago, none of the banks was prepared
to rule out such an overhaul happening.
"Although the vast majority of those surveyed believe that
stakeholder returns will decrease, large-scale job cuts are not
necessarily on the agenda for the coming months," the survey
Just over half the banks expected more writedowns and
provisions this year, and a further 8 percent saw a strong
increase. That contrasts with two-thirds who expected no change
in risk provisioning a year ago and none who saw a big increase.
In lending policies, 59 percent expected Swiss banks to be
more restrictive in the coming year. Last year 58 percent had
predicted no change in lending policies.
The anticipation that the Swiss banking sector will
consolidate has hardened in the past year, with 65 percent of
respondents expecting to see consolidation in the next six to 12
months, up from 47 percent a year ago. Private banks and
regional banks were particularly convinced of the likelihood of
consolidation, the survey said.
(Editing by David Holmes)