Swiss National Bank flags uncertainty due to trade, tensions in stability report

ZURICH: The Swiss National Bank said on Thursday the economic and financial outlook is highly uncertain, particularly due to trade and geopolitical tensions, though it noted profitability for Swiss banks improved in 2024, driven by UBS.

“Several risk factors could amplify the impact of potential negative shocks on global economic and financial conditions,” the SNB said in its 2025 Financial Stability Report.

The risks include public debt having climbed to near historical peaks globally, and valuations in global residential real estate, global corporate bonds and the US stock market still appearing stretched.

The SNB takes account of these risk factors when designing its stress tests, assuming highly unfavourable developments that are unlikely but possible, the report said.

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Profitability for the Swiss banking sector improved year on year in 2024, powered by UBS, it noted.

Capital ratios remained broadly stable, available capital buffers reflected significant loss-absorbing and lending capacity, and banks held substantial liquidity buffers, which contributed to their resilience, the report said.