Jue, Mar 7th 2024
Raiffeisen Group capitalises on interest rate dynamics, boosting profits by 17.7% to CHF 1.39 billion. With a strong foothold in the mortgage market, the group’s market share inches up.
The Raiffeisen Group benefited from strong interest business last year and significantly increased its profit. In the mortgage market, the cooperative banks were able to slightly increase their market share.
Group profit rose by 17.7% to 1.39 billion Swiss francs last year, as Switzerland’s second-largest banking group announced on Thursday. The operating result climbed by as much as 26.2% to 1.71 billion francs.
Raiffeisen was able to grow in all business areas and gain market share in the customer business, Raiffeisen Switzerland CEO Heinz Huber is quoted as saying in the press release. The cooperative group gained 55,000 new customers and 56,000 new members last year.
In the mortgage business, the Group continued to grow last year: overall, mortgage receivables rose by 3.6% (previous year +3.7%) to CHF 211 billion. Nevertheless, it was able to increase its market share slightly. According to the press release, the Raiffeisen banks’ overall share of the Swiss market was 17.8% (previous year: 17.6%).
Growth in customer deposits was again more modest, with an increase of 1.5% to CHF 207.8 billion. However, the Raiffeisen banks’ market share of customer deposits also increased to 15.1% (previous year: 14.5%).
At the same time, however, around 25,000 new pension and investment portfolios were opened last year. Asset management mandates were particularly in demand, it was reported. The inflow of new money into investment and pension accounts amounted to CHF 2.9 billion.
The total income generated by the Raiffeisen banks amounted to CHF 4.1 billion (+15.3 percent). As with the other domestic banks, Raiffeisen’s interest business, which was characterized by the turnaround in interest rates, was the clear earnings driver last year: net interest income increased by almost 21 per cent to CHF 3.07 billion.
Income from the commission and services business was also higher (+5.6% to 624 million), which was well up on the previous year, not least thanks to the pension and investment business. Meanwhile, trading income increased slightly (+0.5% to 256 million).
On the cost side, an increase in staff was the main factor: the number of jobs across the Group rose by 404 to 10,305 full-time positions, with the additional staff being required primarily for local customer support, according to Raiffeisen. However, with an increase of 7.1 percent to 2.11 billion, expenses rose more slowly than income.
Raiffeisen is cautious about the outlook for the new year: it expects the interest margin to decline again in 2024. If business remains solid, the result will not quite reach the previous year’s level. Although prices in the residential property market are falling slightly in certain regions, the risk of a significant price correction is very low.
©Keystone/SDA
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