Banking in Switzerland may not be as popular as it once was, following the crack down of US and European taxing authorities, but it remains a hotbed for wealthy investors. With increased regulations and dissipating growth opportunities in the US, more firms have turned their attention to the nation as a growth prospect and strategic initiative. The latest firm to do so is JPMorgan Chase (NYSE: JPM).
Multiple reports have stated that JPMorgan plans a big expansion in Switzerland, particularly in private banking in Geneva, adding more than 400 jobs in total, the co-head for the U.S. bank in Switzerland was quoted as saying on Wednesday. Martin Schuetz told the TagesAnzeiger newspaper in an interview the bank planned to increase its private banking team in Geneva to over 1,000 by the end of 2012 from 650 now and double its staff in Zurich to 120 by next year.
Schuetz commented “Switzerland remains a highly attractive location for J.P. Morgan. Our customers really value the advantages of a strong currency, minimal inflation, a prudent central bank and high service quality.” The loss of historic secrecy levels in Swiss banking will likely lead to lower margins, but remains attractive nonetheless. “Private banks and wealth managers based in Switzerland must tighten their processes in advice and back office and significantly cut costs,” he said.
The expansion is also aimed at helping the bank serve big international firms based in Switzerland due to its low taxes and stable conditions as well as the booming commodity trading centers of Geneva and Zug, Schuetz said. While key competitor Bank of America (NYSE: BAC) continues to struggle righting their domestic ship, JPMorgan’s strategy will likely lead to a widening of the gap in coming years.
