A Comparison of the Geneva and the Zurich Financial Centre. Market Structure, Competition and Profitability

Term Paper , 2016 , 39 Pages

Business economics - Banking, Stock Exchanges, Insurance, Accounting

Switzerland is one of the most recognised countries for financial services and consists of four main financial centres; Basel, Geneva, Lugano and Zurich. Banking sector can be classified as one of the main contributors in Switzerland’s financial sector.

The following paper addresses two main financial centres in Switzerland as ranked seventh and 13th, respectively by The Global Financial Centres Index: Zurich and Geneva
According to the last GFI report: “The top financial centres of the world are very well developed, sophisticated and cosmopolitan cities in their own right. Successful people are attracted to successful cities and it is perhaps no surprise that these centres are ranked so high by financial services professionals.”

Both financial centres profit from Switzerland’s environment which provides legal stability, and high living-standards and as a result, both financial clusters play an important role in the global business of finance.

This paper aims to analyse the current situation as well to provide an outlook for the future. Due to the limited time as well the limited scope, this paper focuses only on the banking sector, mainly analysing twelve major financial institutions with a strong national presence.

Section 2 covers the background and history of both financial centre, Geneva and Zurich.

Section 3 provides a short overview of the market structure of the financial sector as a whole in each financial centre, describing the number of market participants as well as the offered products and services.

Section 4 contains information regarding the competition in both financial clusters in Switzerland and measures competition using the Herfindahl-Hirschman Index (HHI) on two selected examples.

Section 5 provides an empirical analysis of the profitability of both financial centre using carefully selected key-performance-indicators (KPI).

Lastly, the paper provides an overview as well as an outlook into the future.

List of Content

List of Figures

List of Tables

List of Appendices

1 Introduction

2 Background and History
2.1 Geneva Financial Centre
2.2 Zürich Financial Centre

3 Market Structure
3.1 Geneva
3.1.1 Number of Financial Institutions
3.1.2 Products and Services
3.2 Zurich
3.2.1 Number of Financial Institutions
3.2.2 Financial Cluster in Banking and Insurances Sector
3.3 Market Entry and Exist

4 Competition

5 Profitability
5.1 Financial Institutions for Analysis
5.2 Key-Performance-Indicators
5.3 Regression Analysis
5.3.1 Cost-Income Ratio
5.4 Interest Net Income/Average Assets
5.4.1 Income from Commissions and Services
5.4.2 Total Customer Deposit Growth Rate vs. Net New Credit (loans)

6 Outlook

References

Appendix

• College: Lucerne University of Applied Sciences and Arts (Banking & Finance)
• Authors: Marie-Madeleine Meck (Author), Alisha Dhiri (Author)
• Publication Year: 2016
• Pages: 39
• Catalog Number: V315808
• ISBN (eBook): 9783668243637
• ISBN (Book): 9783668243644
• Language: English
• Tags: Financial Centre Geneva, Financial Centre Zurich Finanzzentrum Zürich, Finanzplatz Zürich, Finanzplatz Genf, Finanzplatz Schweiz, Finanzsektor Schweiz, Banking Schweiz, Finanzzentrum Zürich, Finanzzentrum Genf