Valiant again records solid growth - Half-Year Report 2022
04.08.2022, Bern - Valiant recorded growth in H1 2022, and our regional expansion remained on track. Our consolidated net profit came in at CHF 62.0 million, a rise of 1.3% on the year-earlier period.
Operating income was up 5.1% to CHF 222.0 million, and operating profit increased by 2.3% to CHF 75.8 million.
Interest income still robust
Valiant remained strong in the interest business. Net interest income before value adjustments for credit risk was up 2.3% to CHF 173.4 million, while interest expense continued to decline sharply. In H1 2022, value adjustments for credit risk decreased by 8.9% to CHF 6.2 million. Net interest income for the period came in at CHF 167.3 million, a 2.8% rise on the year-earlier figure. We also launched our second covered bond programme, issuing an initial tranche in mid- June as part of a private placement. This enabled us to secure long-term funding on the capital market.
Well prepared for the interest rate turnaround
During the period, the Swiss National Bank initiated an interest rate turnaround by raising its policy rate. In response, we stopped charging our private and business clients negative interest starting already on 1 July 2022. In a demanding market environment, we stand out for our active treasury management. We also began preparing for the rise in interest rates well in advance.
Growth in fee and commission income
Fee and commission income increased by 13.3% to CHF 36.5 million. Commission income from securities trading and investment activities was up 5.4% to CHF 25.0 million, driven in part by higher income from asset management and custody fees.
Continued growth in loans and funds due to clients
We recorded growth of 2.5% in client loans, meaning that we had almost achieved our annual growth target of at least 3% by the end of the first six months of the year. Client loans stood at CHF 27.9 billion at end-June 2022. We also saw robust growth in funds due to both private and business clients. However, owing to the changing interest rate environment, CHF 334 million in fixed-term deposits were withdrawn by professional counterparties in June, resulting in a 0.8% rise in funds due to clients.
Programme to boost profitability
We continued to implement Strategy 2024 during the period. In February 2022, we added a sixth strategic aim, embarking on a programme to increase profitability. The programme is set to generate initial cost savings in 2022 and will lead to annual savings of CHF 12-15 million from 2024. We will achieve this by introducing cost savings and optimisation measures across the company.
Two new branches
Our regional expansion from Lake Geneva to Lake Constance is continuing as planned. In H1 2022, we opened a branch in Wädenswil, our third location in the canton of Zurich, and one in Pully, which is now our biggest office in French- speaking Switzerland. Additional branches will be opened later this year in Winterthur, Meilen and Uster.
Between 2020 and 2024, we will open a total of 14 additional branches as part of our expansion strategy, creating 170 full-time equivalent positions, including 140 in client advisory services. Since 2017, 48% of the growth in client loans has come from new branches.
Corporate social responsibility
At Valiant, we have always taken a responsible, sustainable approach to our work. Our objectives and ambitions in that regard span all aspects of our business and apply to all of our stakeholders. When it comes to ensuring equal opportunities, promoting women is a key focus for Valiant. On 1 July, we became a member of Business and Professional Women (BPW) Switzerland, the country's largest network for women in business, supporting them in their professional, cultural and social initiatives.
Stable business trend expected
We have a solid capital and liquidity base and a robust business model, and we expect 2022 full- year net profit to be slightly above the prior-year figure.
These strong results show that we are on the right track with our strategy and that our clients continue to trust in us. During this challenging period, we remained focused on providing comprehensive advice and support to our clients.
Contact:
Joachim Matha
Head of Investor Relations
031 310 77 44
ir@valiant.ch
Nathalie Hertig
Media spokeswoman
031 320 96 18
medien@valiant.ch
Interest income still robust
Valiant remained strong in the interest business. Net interest income before value adjustments for credit risk was up 2.3% to CHF 173.4 million, while interest expense continued to decline sharply. In H1 2022, value adjustments for credit risk decreased by 8.9% to CHF 6.2 million. Net interest income for the period came in at CHF 167.3 million, a 2.8% rise on the year-earlier figure. We also launched our second covered bond programme, issuing an initial tranche in mid- June as part of a private placement. This enabled us to secure long-term funding on the capital market.
Well prepared for the interest rate turnaround
During the period, the Swiss National Bank initiated an interest rate turnaround by raising its policy rate. In response, we stopped charging our private and business clients negative interest starting already on 1 July 2022. In a demanding market environment, we stand out for our active treasury management. We also began preparing for the rise in interest rates well in advance.
Growth in fee and commission income
Fee and commission income increased by 13.3% to CHF 36.5 million. Commission income from securities trading and investment activities was up 5.4% to CHF 25.0 million, driven in part by higher income from asset management and custody fees.
Continued growth in loans and funds due to clients
We recorded growth of 2.5% in client loans, meaning that we had almost achieved our annual growth target of at least 3% by the end of the first six months of the year. Client loans stood at CHF 27.9 billion at end-June 2022. We also saw robust growth in funds due to both private and business clients. However, owing to the changing interest rate environment, CHF 334 million in fixed-term deposits were withdrawn by professional counterparties in June, resulting in a 0.8% rise in funds due to clients.
Programme to boost profitability
We continued to implement Strategy 2024 during the period. In February 2022, we added a sixth strategic aim, embarking on a programme to increase profitability. The programme is set to generate initial cost savings in 2022 and will lead to annual savings of CHF 12-15 million from 2024. We will achieve this by introducing cost savings and optimisation measures across the company.
Two new branches
Our regional expansion from Lake Geneva to Lake Constance is continuing as planned. In H1 2022, we opened a branch in Wädenswil, our third location in the canton of Zurich, and one in Pully, which is now our biggest office in French- speaking Switzerland. Additional branches will be opened later this year in Winterthur, Meilen and Uster.
Between 2020 and 2024, we will open a total of 14 additional branches as part of our expansion strategy, creating 170 full-time equivalent positions, including 140 in client advisory services. Since 2017, 48% of the growth in client loans has come from new branches.
Corporate social responsibility
At Valiant, we have always taken a responsible, sustainable approach to our work. Our objectives and ambitions in that regard span all aspects of our business and apply to all of our stakeholders. When it comes to ensuring equal opportunities, promoting women is a key focus for Valiant. On 1 July, we became a member of Business and Professional Women (BPW) Switzerland, the country's largest network for women in business, supporting them in their professional, cultural and social initiatives.
Stable business trend expected
We have a solid capital and liquidity base and a robust business model, and we expect 2022 full- year net profit to be slightly above the prior-year figure.
These strong results show that we are on the right track with our strategy and that our clients continue to trust in us. During this challenging period, we remained focused on providing comprehensive advice and support to our clients.
Contact:
Joachim Matha
Head of Investor Relations
031 310 77 44
ir@valiant.ch
Nathalie Hertig
Media spokeswoman
031 320 96 18
medien@valiant.ch
More information and links:
Publish your own news
On this link you can enter the corresponding information.
TOP NEWS - powered by Help.ch
Spring upturn: Swiss commercial register records 13,453 new company formations in the first quarter of 2024 HELP Media AG, 09.04.2024
When will central banks cut rates in 2024? Bank Julius Bär & Co. AG, 21.03.2024
Julius Baer Group nominates Bruce Fletcher and Andrea Sambo for election to the Board of Directors Bank Julius Bär & Co. AG, 13.03.2024
