Banks Vaud Cantonal Bank makes less profit in the first half of the year

The Vaud Cantonal Bank (BCV) earned slightly less in the first half of the year. However, the bank still achieved the second-best result (adjusted for special effects) in its history.

Operating profit, a measure of operating performance, fell by 6 percent to CHF 258.2 million in the first six months of 2024, as BCV announced on Thursday. Consolidated profit fell by 8 percent to 221.1 million. However, the bank had posted a record result in the same period of the previous year due to the turnaround in interest rates, which puts the decline into perspective somewhat.

Interest business remains stable

Despite the National Bank's interest rate cuts, the bank was able to keep its net interest income stable. Net interest income remained virtually unchanged at CHF 290.2 million. The bank explains that the increase in business volume compensated for the less favorable business environment.

In contrast, there were slight gains in the commission and services business. Income here rose by 7 percent to 180.9 million francs. The main reasons for this were the more favorable financial market environment and high transaction volumes in the private client segment.

In contrast, the trading business performed significantly worse. The active management of the balance sheet proved to be less profitable in the current interest rate environment. As a result, net income fell by 15 percent to 89.1 million francs. Overall, operating income remained roughly stable compared to the previous year at CHF 580.9 million.

Costs increased

Operating expenses, on the other hand, increased by 5 percent to 283.5 million francs. Cost growth was significantly stronger in personnel expenses (+7%) than in operating expenses (+1%). The Bank attributes the increase in particular to staff increases in the areas of IT and cybersecurity as well as projects to further develop the Bank.

BCV was also able to attract net new assets of CHF 1.1 billion. These came from domestic private clients, SMEs and institutional clients. Overall, assets under management rose by 4 percent to 117.2 billion francs in the first half of the year, thanks in part to the good investment performance.

The bank is relatively confident about the outlook. Provided there is no deterioration in the economic situation and developments on the financial markets, it expects business performance in the second half of the year to be similar to that of the previous six months. BCV also confirmed its forecast from the beginning of the year that the annual result for 2024 will be below the record level of 2023.

SDA