Credit Suisse clients withdrawing their money as the bank headed for collapse likely accounts for the first significant balance sheet contraction in a decade for all banks in Switzerland, a report by the Swiss Bankers Association on Tuesday said.

In Switzerland, the balance sheet of banks fell 6.9% to 3,339.7 billion Swiss francs ($3.76 trillion) in 2022, said the Banking Barometer, an annual report on banking industry trends.

"The downturn among the big banks was especially large and probably driven mainly by shifts in customer funds at Credit Suisse," the report said.

Credit Suisse's high liquidity requirements were also seen as playing a part in sight deposits held overnight at the Swiss National Bank falling more sharply in 2022 than in the previous ten years.

"There was a certain amount of rotation into time deposits, but a large share of the decrease was caused by shifts in customer funds at Credit Suisse in October 2022," the report said.

The Banking Barometer acknowledges that Credit Suisse's collapse and subsequent takeover by UBS have raised questions over the potential damage to the Swiss banking industry’s reputation. ($1 = 0.8873 Swiss francs)

(Reporting by Noele Illien, Editing by Louise Heavens)