Berner Kantonalbank earns more and pays higher dividends
Published: Thursday, Feb 1st 2024, 07:10
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Berner Kantonalbank (BEKB) continued to grow last year and reported a clearly higher profit. The interest business remains the driver of success. Shareholders are again to receive a higher dividend.
Operating income rose by 9.6 percent to CHF 532.3 million in 2023, as announced by BEKB on Thursday. Meanwhile, operating expenses fell slightly by 0.2 percent to 254.4 million, leaving a 40 percent higher operating profit of 238.9 million francs.
Pure operating profit, i.e. before disposals of financial assets or changes in default risk-related value adjustments and other effects, also increased by 40 percent to CHF 246.9 million. And net profit rose by 9.6 percent to CHF 174.9 million.
Advantageous interest rate environment
According to BEKB, the favorable interest rate environment was a key factor in the good performance. The good refinancing with customer deposits and the positive sign for the key interest rate caused net interest income to climb by almost a fifth to CHF 376.5 million. Commission income (-3.7% to 104.9 million) and net trading income (-35% to 24.3 million), on the other hand, fell.
The balance sheet increased by a total of 0.7 percent to CHF 40.1 billion, with BEKB increasing customer loans by 4.1 percent to CHF 28.8 billion. A large part of this is to be found in the mortgage business, which grew by 3.3 percent. Meanwhile, customer assets grew by 4.6 percent to 40.8 billion francs.
Dividend increase planned
The profit growth and the still solid total capital ratio of 19.6 percent (Basel III) have prompted the BEKB Board of Directors to propose a dividend increase of 40 centimes to CHF 10 per share at the upcoming Annual General Meeting.
This also benefits the Canton of Berne, which holds more than half of BEKB. Last year, the canton received around CHF 37 million in taxes and around CHF 48 million in dividends.
BEKB expects "another strong result" for 2024 as a whole, as the statement continues. The bank assumes that interest rates will rise again slightly at the long end. Saron mortgages are likely to remain at the current level, while a moderate increase is expected for fixed-rate mortgages, according to the assessment.
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