Banks Valiant increases profit despite weaker net interest income

SDA

5.2.2025 - 07:45

Valiant Bank increases profit in 2024 thanks to investment business (archive image)
Valiant Bank increases profit in 2024 thanks to investment business (archive image)
Keystone

Valiant Bank, which operates throughout Switzerland, has once again increased its profit in 2024. While the interest business declined due to the interest rate environment, the bank was able to benefit from a good investment business.

Keystone-SDA

As a measure of the operating result, net operating income was slightly up on the previous year, increasing by 0.5 percent to CHF 233.4 million, as the bank announced on Wednesday. After a further increase in the reserves for general banking risks, consolidated profit was 4.2 percent higher at 150.4 million francs.

Shareholders will benefit from an increase in the dividend by 30 centimes to 5.80 francs. In its strategic goals, the financial institution has set itself the target of increasing dividends annually.

Strong commission business

Total operating income rose by 1.1 percent to 551.7 million francs. In the important interest business, however, the bank felt the effects of the "turbulent interest rate environment" with the key interest rate cuts by the Swiss National Bank (SNB). After a strong 2023, net income in the interest business fell again by 2.8 percent to 395.9 million francs.

In contrast, Valiant achieved significant growth in the commission and services business (+10.8% to 93.0 million). According to Valiant, the positive development of the financial markets and the associated increase in investment activities contributed to this increase

Income was also significantly higher in the trading business (+25.3% to 50.5 million). Here the bank benefited in particular from higher income from forward exchange transactions.

Higher costs

With an increase of 3.4% to CHF 300.0 million, operating expenses rose slightly more than income. According to the press release, this was due to higher operating expenses, which included one-off expenses for the renewal of the core banking software as well as investments in digitalization and the further development of the offering.

Personnel expenses, on the other hand, were lower than in the previous year despite a higher number of employees. However, the bank made a one-off contribution to the pension fund in 2023.

Restrained lending growth

The Bank's loans increased by 1.6% to CHF 30.1 billion last year. Mortgage loans, which account for the largest share of loans, increased somewhat more significantly by 1.7 percent.

On the other side of the balance sheet, customer deposits increased by 0.8 percent to 22.4 billion francs. In addition to customer deposits, the financial institution emphasizes that it continues to rely on Pfandbrief loans and its own covered bonds for refinancing.

Further profit increase expected

Valiant's results exceeded analysts' expectations in all areas; analysts had expected a consolidated profit of CHF 147.0 million (AWP consensus). The dividend payout was also expected to be slightly lower on average.

Valiant's assessment of the completed 2020-2024 strategy period is positive: all financial targets have been achieved. The bank now expects a "slightly higher" consolidated profit for the current 2025 financial year.