Raiffeisen has published the figures for the first half of the year. Net profit from January to June was a good 700 million francs – 26 percent more than in the same period last year. The banking group continued to grow both in the granting of mortgages and in customer deposits.
The business success, the operating result of a bank, increased by almost 44 percent to 894 million francs, as the now second largest banking group in Switzerland reports.
Increase in interest business
Raiffeisen Switzerland has grown in all earnings positions, while the bank has continued to invest in its further development, writes Managing Director Heinz Huber. He emphasizes: “More than 90 percent of the profit remains in the company and makes us a stable and secure bank.”
Caption: The Raiffeisen Bank branch on Zurich’s Limmatquai. (18.4.2018) KEYSTONE/Gaetan Bally
In the interest business in particular, the Group’s main source of income, gross profit rose significantly by CHF 27 billion to CHF 1.55 billion. According to Raiffeisen, the primary driver was the turnaround in interest rates initiated by the Swiss National Bank (SNB). In an environment of rising interest rates, the interest margin has improved.
But income from the commission and service business also increased by 4 percent to CHF 311 million, and in trading business it increased by 15 percent to CHF 133 million. Total income of CHF 2.04 billion (+21 percent) was offset by operating expenses of CHF 1.03 billion (+7 percent), with the cost-income ratio improving by 6.6 percentage points to 50.6 percent.
Growth in the mortgage business
Raiffeisen can continue to rely on steady growth in its core business: the group’s mortgage volume grew by 1.7 percent to CHF 207 billion in the first half of the year. Raiffeisen has thus moved up to market level and defended its market share of 17.6 percent from the previous year.
High equity
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Raiffeisen Switzerland still sees itself as “excellent” capitalized. Thanks to the good operating result, the reserves for general banking risks have increased by CHF 50 million and equity and loss-absorbing funds have been further strengthened to CHF 24.3 billion, writes the banking group.
In addition, customer deposits rose by CHF 850 million or 0.4 percent to CHF 206 billion despite a general market downturn. And since the turn of the year, the Raiffeisen banks have received net new money in custody accounts totaling 1.8 billion. In just six months, around 16,600 custody accounts were opened and the assets under management increased by 1.8 percent to CHF 247 billion.