Net income
The aggregate net income of the banks in Switzerland was down slightly (by 3.5%) in 2024 compared with the prior year. One of the main reasons for this was a sharp decline in interest operations, which are of central importance in banking. Annual profit thus fell by 31.7% to CHF 17.7 bn.
The net income of all banks in Switzerland was CHF 69.8 bn in 2024, a decline of 3.5% year-on-year. This was due in particular to the sharp drop in net income at the big banks (down 7.8%). Broken down by activity, the results from trading activities (up 38.4%) and from commission business and services (up 3.0%) were both higher, whereas the result from interest operations was down 13.5% and the other result from ordinary activities was down 27.0%. The result from trading activities is probably attributable to a volatile year on the stock markets, while the contracting interest margin and thus falling interest income were mainly caused by rising interest expense due to higher refinancing costs. The slightly negative trend across the industry as a whole should be viewed in the context of one-time effects relating to the takeover of Credit Suisse by UBS in 2023. The big banks’ share of aggregate net income, for instance, fell by a further 1.9 percentage points, while all other categories either maintained or increased their share.
TRENDS IN 2025
Banking industry dominated by low inflation, zero interest rates and trade and geopolitical tensions in 2025
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Trends in 2024
Net income by banking activity
Aggregate net income comprises the results from interest operations, commission business and services, and trading activities as well as the other result from ordinary activities. The 3.5% fall in aggregate net income was primarily caused by lower results from interest operations and from other ordinary activities.
Against a backdrop of low interest rates and a reduced interest margin, the result from interest operations was no longer the largest contributor to net income with a 30.2% share. For the first time, the result from commission business and services accounted for the largest share with 32.1%. The steep fall in interest operations was due to the contracting interest margin. Interest income was unchanged year-on-year, but interest expense was CHF 3.3 bn or 5.3% higher. This reflects the impact of the SNB’s rate hikes in 2022 and 2023, which increased the banks’ refinancing costs, particularly through higher interest on customer deposits. The SNB did cut rates again during 2024, but this only affects banks’ refinancing costs with a certain time lag. In addition, customer deposits increased by 5.3% in 2024, possibly because they continued to earn interest at attractive rates during the first half of the year. The stock exchange banks and big banks recorded the biggest increases here. The other result from ordinary activities dropped by CHF 4.1 billion to CHF 11.1 billion (–15.9%). This negative development is due to a significant decrease in income of paticipations of CHF 3.9 billion. The decline in this item is almost entirely attributable to the big banks, which also has a significant negative impact on the overall net income of this banking group.
In contrast to previous years, the result from commission business and services rose slightly (by 3.0%), causing its share of overall net income to grow from 30.1% to 32.1%. This was attributable to higher commission income from securities and investment business and lower commission expense.
The biggest relative increase in 2024 was in the result from trading activities, which reached a record CHF 15.1 bn, equating to a year-on-year rise of 38.4%. One important reason for this is the increased market volatility seen in 2024.
Figure 8
Net income by bank category
Figure 9
Compared with the prior year, the private bankers, stock exchange banks and other banking institutions increased their aggregate net income, while the other categories recorded a decline. This growth came mainly at the expense of the big banks, which saw the largest fall in net income (7.8%), with their share dropping by 1.9 percentage points to 41.1%.
The cantonal banks and the stock exchange banks posted the biggest year-on-year increases in their share of net income. The stock exchange banks profited from the market trend, increasing their share by 0.7 of a percentage point to 15.1% as their net income grew by CHF 143.04 mn. This increase was driven by improved results from commission business and services (up CHF 631.1 mn or 12.7%) and from trading activities (up CHF 420 mn or 25.0%). The cantonal banks recorded the second-highest increase in their share of net income, which grew by 0.5 of a percentage point to 16.2% despite net income falling by CHF 59.8 mn or 0.5%. Their higher result from commission business and services (up 7.3%) was set against lower results from interest operations (down 3.2%) and trading activities (down 3.8%). The cantonal banks were thus the only category to show a decline in the result from trading activities.
All categories apart from the big banks saw minimal growth in their share of net income – between 0.0 and 0.3 of a percentage point. The foreign banks and other banking institutions posted a 0.3-point gain, while the regional and savings banks gained 0.1 of a percentage point. The Raiffeisen banks and private bankers had unchanged shares of net income, even though the former recorded a 3.8% fall in net income and the latter a 2.7% rise.
The sharp increase in the result from trading activities and significant drop in the result from interest operations across the industry as a whole were heavily influenced by the big banks. They posted a strong increase in trading activities (up CHF 3,485.6 or 57% at CHF 9,602.1 mn) and a hefty fall in interest operations (down CHF 1,690.3 mn or 44% at CHF 2,150.9 mn). The big banks’ share of the result from interest operations thus fell from 15.8% in 2023 to 10.2% in 2024, while their share of the result from trading activities rose significantly from 55.9% to 63.5%. In spite of this strong growth in trading activities, their net income was down CHF 2,431.2 mn or 7.8%, bringing their share of the total figure down from 43% to 41.1%.
Foreign banks: subsidiaries and branches
Larger banks have a physical presence in various countries, often in the interests of market access. Almost 100 foreign-controlled banks operate in Switzerland, employing more than 16,000 people and thus contributing substantially to the success of the Swiss banking centre. These foreign banks’ Swiss operations fall into two main categories from a legal point of view: subsidiaries and branches. A subsidiary is a bank set up under Swiss law but controlled by a foreign parent company. It is a legal entity in its own right and can independently conclude contracts with customers. A branch, on the other hand, does not qualify as a separate, independent legal entity and can therefore only operate on behalf of the foreign parent bank, not for itself. Since it does not have a balance sheet of its own, it is not subject to certain FINMA requirements, including the Capital Adequacy Ordinance (CAO), but it must be authorised and supervised by FINMA. Both subsidiaries and branches must comply with FINMA’s regulations, ordinances and circulars. The vast majority of foreign bank branches in Switzerland are in supervisory categories 4 and 5.
Long-term trends in the bank categories’ shares of net income
The structural shift in the Swiss banking landscape has continued but slowed down in recent years. The big banks’ share of net income has fallen further, benefiting all other categories. The foreign banks have seen their share recover over the past few years.
Looking back over a ten-year period, the stock exchange banks’ share of total net income grew steadily between 2014 and 2023, with the exception of 2022. This uptrend continued in 2024, causing their share to rise to 15.1% (compared with 11.2% in 2014). The cantonal banks’ share also grew again, rising by 0.5 of percentage point to 16.2%. The sharp fall in the big banks’ share of net income resulted in the shares of all other categories – with the exception of the foreign banks – being either the same as or greater than ten years ago.
The foreign banks’ share fell from 15.6% in 2014 to 9.8% in 2020. This was due in part to the changing environment in the wake of the financial crisis and in part to the fact that some banks restructured their international activities, reducing them to selected areas of business and thus triggering internal shifts and the sale of certain units. Their share has been rising again since 2021 and now stands at 12.7%, just 2.9 percentage points below the 2014 figure. The downtrend among the big banks that has been in place since 2020 continued. Whereas they accounted for around half of net income between 2014 and 2022, their share had fallen to just 41.1% in 2024. This decline highlights the structural change in the Swiss banking landscape. That said, it was much less pronounced than in 2023, which was dominated by the takeover of Credit Suisse.
Annual profit and taxes
Figure 11
Breakdown of result of the period for banks in Switzerland as at end-2024
In CHF bn
Chart: Swiss Bankers Association . Source: Swiss National Bank
Gross operating profit fell by 12.3% year-on-year to CHF 23.9 bn. After value adjustments, taxes and extraordinary income, the banks’ annual profit (result of the period) was CHF 17.7 bn.
The 3.5% decline in aggregate net income resulted in a gross operating profit of CHF 23.9 bn in 2024, CHF 3.3 bn or 12.3% lower than in 2023. Operating expenses, comprising personnel and administrative expenses, rose by 1.8% and were thus relatively stable. After deduction of depreciation, amortisation, value adjustments and provisions, the Swiss banks’ operating result was CHF 17.8 bn (up 52.5%), despite the year-on-year drop in gross operating profit. This pleasing outcome was driven by sharp falls of 65.0% in depreciation and amortisation and 54.6% in value adjustments and provisions, together with a 50.1% reduction in value adjustments relating to default risks and losses from interest operations. All three figures had been exceptionally high in 2023 due to the takeover of Credit Suisse.
The huge fall in extraordinary income from CHF 18.7 bn in 2023 to CHF 4.1 bn in 2024 is especially striking, although this figure is still higher than those recorded in the years from 2020 to 2022. The decrease was almost entirely attributable to the big banks, reversing the strong base effect caused by the takeover of Credit Suisse by UBS in 2023. No less than CHF 18.3 bn of the extraordinary income in 2023 was due to the big banks and largelyresulted from the Credit Suisse takeover, with the key factor being one-time negative goodwill of USD 29 bn. After deduction of extraordinary expenses, the Swiss banks posted extraordinary net income of CHF 3.8 bn in 2024. They paid CHF 2.5 bn in taxes, CHF 0.7 bn or 22.2% less than the previous year.
In summary, annual profit (result of the period) amounted to CHF 17.7 bn, much lower than the year-back figure but still markedly higher than the CHF 6.5 bn recorded in 2022. This was driven by much lower depreciation, amortisation, value adjustments and provisions as well as by extraordinary income remaining rather high.
Banking industry dominated by low inflation, zero interest rates and trade and geopolitical tensions in 2025
The Swiss economy continues to grow at a modest pace, consumer price inflation has fallen to zero, and the SNB policy rate has been at 0% since June. International uncertainty is weighing on demand, and the major central banks’ monetary policy stances are diverging. Forecasts for the banks in Switzerland remain muted for 2025, but contracting interest margins might be partially offset by a higher result from commission business and services.
Modest global growth continued in the first half of 2025, with the IMF currently estimating that GDP grew by 1.4% in the industrialised nations and just 0.8% in the eurozone. Escalating trade and geopolitical tensions have increased both companies’ refinancing costs and uncertainty with regard to capital spending. Low inflationary pressure caused the SNB to cut its policy rate to zero in June 2025. The ECB also cut its headline rate sharply mid-year, whereas the Fed kept its target range unchanged. Both are much higher than the SNB rate.
According to the Swiss Banking Outlook, the financial market experts who took part in the survey expect Switzerland to record real GDP growth of 1.2% and annual inflation of 0.3% in 2025. The unemployment rate is likely to rise slightly to 2.7%. Four out of five respondents think the SNB will keep its policy rate on hold until the end of the year, while the remaining fifth see a downside risk as far as –0.25%. Ten-year Confederation bonds are expected to yield around 0.4% at the end of the year, although there is a downside risk attached to this forecast.
The Swiss franc firmed up against the other leading currencies in the first half of the year, with the euro costing approximately CHF 0.93 and the US dollar CHF 0.80 at the start of July. Most of the experts surveyed for the Swiss Banking Outlook anticipate largely stable exchange rates for the rest of the year, with slight appreciation versus the US dollar.
The Swiss Market Index (SMI) posted a moderate gain of about 3% in the first half-year, albeit with high volatility in a range from 10,900 to 13,100 points. The index showed a strong increase up to the end of March, driven by positive inflation data and the SNB rate cut. It then fell back markedly following the announcement of US tariffs. The associated trade policy tensions, exacerbated by geopolitical uncertainty and weaker performance by the tech sector, weighed on markets around the world. The SMI was only able to stage a partial recovery thereafter. Given the lack of clarity globally, volatility seems set to remain comparatively high in the second half of the year. According to the Swiss Banking Outlook, 59% of the experts see the banks’ aggregate net income falling further in 2025, while 29% expect it to remain stable. A declining result from interest operations is cited as the main driver. Zero interest rates, which may fall into negative territory, as well as increased competition in loans and mortgages are depressing interest margins. Operating costs, meanwhile, remain high, not least due to regulatory projects such as the implementation of Basel Ill Final. The results from commission business and services and from trading activities should show a positive trend and thus offset at least some of the drop in the result from interest operations. Some 44% of respondents also expect growth in mortgage lending to be above average, with corporate loans remaining in line with the long-term average. On the bottom line, however, the consensus forecast for 2025 is for slightly lower net income.