Zürcher Kantonalbank (ZKB) achieves a significant profit surge in 2023, fueled by a favorable interest rate landscape, boosting net interest income and setting a new high for canton and municipality distributions.

Zürcher Kantonalbank (ZKB) reported a considerable profit uplift for 2023, marking another year of financial growth. The bank’s success was mainly due to a beneficial interest rate environment, which propelled net interest income substantially. This financial milestone led to unprecedented profit distributions to the Zurich canton and its municipalities.

The bank’s consolidated profit surged by 17% to CHF 1.24 billion. Notably, the operating profit, an indicator of operational efficiency, soared by nearly 39% to CHF 1.47 billion. This robust performance enabled Zürcher Kantonalbank to fortify its reserves with an additional CHF 225 million.

Total operating income escalated by 16%, reaching CHF 3.19 billion. A significant portion of this growth came from the net interest business, witnessing a near 30% increase. Despite a slight deceleration in the latter half of the year, the bank maintained vital performance metrics. Other income streams, like net commission and service income and net trading income, saw modest gains of approximately 1.5% each.

The mortgage sector experienced a notable expansion, with volumes growing by 4.2%, surpassing the CHF 100 billion threshold for the first time. Although this growth rate was slightly lower than the previous year’s, it underscored the continued demand for mortgage lending.

Asset management also grew, with assets under management rising almost 13% to CHF 450.8 billion. This was bolstered by a significant influx of net new assets totaling CHF 36.8 billion, alongside positive market dynamics.

Zürcher Kantonalbank substantial profit increase translates into a record distribution of CHF 528 million to the Zurich canton and its municipalities, with the canton receiving CHF 358 million in dividends, among other allocations.

The bank’s operational expenses saw a moderate increase of 5.3%, with a 5.5% rise in employee count. Despite this, personnel expenses grew by only 2.4%, reflecting the bank’s strategic management of compensation and bonuses.

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