Banks Kantonalbank Obwalden earns less in the interest business

Obwaldner Kantonalbank (OKB) earned significantly less in the first half of 2024 despite further growth in loans in the interest-earning business. Overall, the bank reported an unchanged half-year profit.

Net operating income as a measure of operating profit fell by 11 percent to CHF 13.8 million, as can be seen in the OKB's half-year report published on Thursday. After a reduced allocation to bank reserves, net profit remained at the previous year's level of CHF 6.7 million.

The interest business did not develop as expected. According to the OKB, this was due to the unexpectedly early interest rate cut by the Swiss National Bank in March and the associated lower interest income. Gross income fell by 7.4 percent year-on-year to 25.2 million francs.

However, expectations were exceeded in the commission and services business. Income in this area rose by 12.9 percent to CHF 5.2 million. This is proof of the great trust placed in the bank by its investment clients, according to bank boss Margrit Koch, who was quoted in the press release.

Good cost-income ratio

At 18.5 million francs, operating expenses were 2.2 percent higher, partly due to inflation, according to the statement. At 51.2 percent, the cost/income ratio was at a good level.

In terms of customer loans, the cantonal bank increased by 1.6 percent to 4.3 billion francs. The bank emphasized that the low value adjustment ratio of 0.8 percent proves that the bank is growing in a risk-conscious manner.

The Obwalden-based state-owned bank believes it is on track for the year as a whole: the course of business to date suggests a good annual result for 2024. However, as dividend income from investments will mainly be generated in the first half of the year, the second half will be slightly weaker than the first.