Valiant increases profit in 2023 thanks to strong interest business
Published: Wednesday, Jan 31st 2024, 07:40
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Valiant benefited greatly from the favorable interest rate environment in 2023 and earned significantly more. The bank has now completed its Switzerland-wide expansion over several years earlier than planned.
Not least thanks to a very strong interest result, the operating profit as a measure of operating performance increased by 45.7 percent to 232.3 million francs, as Valiant announced on Wednesday. After a substantial allocation to the reserves for general banking risks, the bottom line was an 11.4 percent increase in annual profit to 144.3 million francs.
Shareholders should also benefit from the increase in profits. The dividend will now be increased by 50 centimes to CHF 5.50.
Interest business as a driver
The bank's operating income climbed by 21.7 percent to CHF 545.8 million. This was driven by the interest business, which benefited from the changed interest rate landscape. Net income in the interest business increased by 21.5 percent to CHF 407.5 million.
The commission and services business (+10.0% to 83.9 million) also increased significantly. The reduction in intermediary business and lower card commissions led to a decrease in commission expenses, according to the report.
In the trading business (+78% to 40.3 million), income even rose very sharply. According to the bank, this was due to a further increase in income from forward exchange transactions.
Cost program
Meanwhile, operating expenses rose by 8.5 percent to CHF 290.2 million, which was less than the increase in income. Valiant explained the cost increases with investments in digitalization and geographic expansion. Employees benefited from a salary increase of 2.6 percent and a one-off contribution of CHF 10 million to the pension fund in the first half of the year.
The bank believes it is on track with its program to increase profitability, with which it aims to reduce costs by around CHF 12 to 15 million per year from 2024. Cost reductions totaling CHF 11 million have been implemented by the end of 2023. The full effect of the savings will be felt from 2024.
Annual lending growth almost achieved
The bank's loans increased by 3.5 percent to 29.7 billion francs last year. Valiant emphasizes that the bank thus exceeded its annual growth target of 3 percent. Both the newly opened and existing locations contributed to this growth.
Despite the inflow of new money from private and corporate customers, customer deposits fell by 1.5 percent overall due to the reduction in fixed-term deposits.
Expansion strategy
Valiant has now declared its expansion strategy "from Lake Geneva to Lake Constance" complete. The aim was to expand the branch network by 14 new branches between 2020 and 2024. Last year, locations were opened in Schaffhausen, Altstetten and Muttenz. The creation of 170 full-time positions, including 140 in customer advisory services, will be achieved in the course of 2024
Valiant is confident for the coming year 2024: it expects a higher Group profit.
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