Banks St. Galler Kantonalbank increases profit despite pressure on net interest income
St. Galler Kantonalbank (SGKB) has increased its net profit for 2024 despite a weaker interest result. The state-owned bank continued to grow rapidly in the mortgage market.
12.02.2025, 07:30
SDA
In operational terms, however, the cantonal bank earned less again last year: operating profit fell by 6.9 percent to CHF 253.9 million, as can be seen from the annual figures presented on Wednesday. However, because no reserves for general banking risks were formed in 2024, the bottom line was still a 3.8 percent higher consolidated profit of 215.1 million francs.
Shareholders will receive an unchanged dividend of 19 francs. The Canton of St. Gallen, as the main shareholder, will thus receive CHF 58.1 million.
Decline in net interest income
Overall, operating income fell by 3.3 percent to 561.7 million francs. The lower income was due to the interest business, which was characterized by the renewed fall in interest rates last year (net interest income -10.4% to 332.1 million).
Meanwhile, customer loans increased significantly last year, rising by 5.0% to CHF 33.8 billion. In the mortgage business, SGKB continued to grow rapidly with an increase of 4.7% (previous year +6.6%).
Strong cash inflow
Meanwhile, SGKB was able to significantly improve its result in the commission and services business (+11.4% to 175.9 million). According to the press release, the bank benefited from a strong acquisition performance, successful asset management and the positive development on the financial markets. Net income from the trading business was also significantly higher (+6.0% to 45.2 million).
The bank recorded new money growth of CHF 3.1 billion last year. Overall, client assets managed by SGKB climbed by 9.8 percent to 64.5 billion Swiss francs, which was due not only to the inflow of money but also to the good performance of investment products, as the bank emphasizes in the press release.
Cautious outlook
Costs also rose by 3.8 percent to 301.8 million francs. Personnel expenses rose due to an increase in the number of employees by 31 full-time equivalents, while operating expenses were driven not least by investments in IT.
SGKB is cautious about the new year 2025. Overall, a "result at the previous year's level" is expected, although the forecasts are subject to a great deal of uncertainty. Once again, the SNB's interest rate moves and market reactions are likely to have a "significant impact" on the earnings situation.
