Mié, Feb 14th 2024
St. Galler Kantonalbank capitalizes on the dynamic interest rate environment and a surge in customer base, marking a significant upturn in profits and operational growth across all sectors.
St. Galler Kantonalbank (SGKB), a state-owned entity in Eastern Switzerland, witnessed a substantial uplift in its profitability last year. The bank’s strategic positioning allowed it to reap the benefits of the evolving interest rate scenario and an influx of customers from Credit Suisse, enhancing its financial standing.
The bank’s operating profit soared by 23 percent, reaching CHF 272.7 million, as the annual financial statements revealed. After bolstering the reserves for general banking risks by CHF 30 million, SGKB announced a consolidated profit increase of 12.8 percent, amounting to CHF 207.2 million.
Christian Schmid, SGKB’s CEO, emphasized the widespread growth across all business divisions, including the bank’s subsidiary in Germany. The total operating income escalated by 13.5 percent to CHF 580.7 million, with all income streams registering growth. The pivotal interest business saw a 16.9 percent rise in net income, hitting CHF 370.7 million, attributed to the interest rate normalization post the prolonged negative interest rates era and expansion in the lending sector.
The lending portfolio expanded by 5.7 percent to CHF 32.2 billion, with the mortgage sector mainly thriving, marking a 6.6 percent increase in mortgage receivables.
SGKB also experienced a surge in its commission and services business, increasing by 4.9 percent to 158.0 million. The trading business outperformed with an 8.4 percent growth, reaching 42.7 million.
A notable highlight was the substantial inflow of new money, totaling CHF 4.2 billion. The bank capitalized on the turmoil surrounding Credit Suisse and its acquisition by UBS, positioning itself as a viable alternative for clients, with a significant portion of new private client money attributed to these events. By year-end, client assets stood at CHF 58.7 billion.
In response to the commendable annual performance, SGKB has decided to increase its dividend payout to 19 francs per share, up by 2 francs, translating to a 55 percent payout of the consolidated profit. Notably, CHF 7 of the dividend will be sourced from the capital contribution reserve, offering a tax-free benefit to private shareholders in Switzerland.
©Keystone/SDA
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