Profits Rising in Geneva Financial Sector – More Swiss Jobs

Posted on 29 October 2007 by ThomasP

A recent survey of the principal actors in Geneva’s secretive banking sector has divulged a 15% rise in profits over previous projections concerning work in Switzerland in the banking sector.

The growth shown year-to-date in the banking sector in Geneva has surprised all observers, despite already rosy projections in the beginning of 2007.

Yesterday Ivan Pictet, president of the Fondation Genève Place Fincancière delivered the results, announcing a general profitability 15% higher than that previously expected, following the analysis of results from the first half of 2007 which show extraordinary growth. On the other hand, projections for 2008 environment of work in Switzerland remain prudent and reserved because of the strong cyclic behaviors of Geneva’s banking business, strongly linked to portfolio management and trade finance in raw materials.

The summer credit crisis doubtless threw some cold water on the expectations for the rest of the year, noted Mr. Pictet, but Geneva

nonetheless will experience growth more than double that of the rest of Switzerland.

In the detailed report, there were also other interesting data. Estate management will also close with a very profitable year, after experiencing 15% growth in 2006.

The net influx of funds is expected to progress 3%- 4% to the first semester of 2008. The new cash inflows are coming mainly from EU countries, a substantial portion from eastern Europe and some also from Russia and its neighboring states.

Another notable phenomenon is the potentially very financially interesting rise of investment banking activity in Geneva. The increase in investment banking stands in stark contrast to the flat activity (no increase whatsoever) of trade finance activity, despite the key importance of work in Geneva in raw materials trade, which trades over $1 trillion and is the most important financial center for trade in raw materials, ahead of London.

Geneva’s part of total world oil trade is roughly 33%. Geneva’s part of world grain trade is 30%, and that of chartered transport and shipping for raw materials 22%. 360 companies operate in Geneva within the Geneva Trading and Shipping Association with a volume of transactions over $500 billion.

The survey also noted a rise in salaries of more than 10%, representing 75% – 80% of the global costs of the banking industry. The rise was due in part to the increase in hiring for work in Switzerland (5%) as well as to bonuses paid in early 2007 based on profits in 2006.

The banking sector in Geneva is responsible for over $400 million in yearly tax receipts for the canton. The banks alone are responsible for 5000 – 10,000 jobs in the Geneva area.

The survey was conducted among 133 financial establishments in the Geneva area, of which 54 banks. Geneva has 141 banks, 634 independent portfolio managers, and 3000 intermediaries of various sorts. There is considerable work in Geneva for english-speaking professionals. The canton of Geneva has also 661 insurance companies, 1098 fiduciaries, and 350 law offices and notaries. Across the entire financial sector in Geneva there are roughly 35,000 jobs.

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