The cantonal bank of Lucerne posted lower first-half profit than a year ago as earnings from trading, services and commissions declined. The bank now plans to develop its distribution channels, including digital banking.
Luzerner Kantonalbank (LUKB) had net income of 89.1 million Swiss francs in the six months through June, 2.4 percent less than in the same period of 2015, the company said in a statement today.
Lower profit from commissions, trading and slightly higher costs more than offset a rise in net interest income. LUKB expects full-year profit in line with last year's, when it had a net of 180.1 million francs.
Strategic Shift
The bank said that given the negative interest rates introduced by the Swiss central bank, the importance of net new money had declined.
Instead, it put a higher emphasis on securities and fiduciary investments, where it achieved an increase of 563 million francs in the first half.
As a consequence, LUKB doesn't aim at increasing the volume of deposits, also to prevent having to charge its customers the costs for the negative interest charged by the central bank.
Thus, LUKB had net new money of 290 million francs in the first six months of the year. Assets under management currently are at 27.2 billion francs.
New E-Banking in September
LUKB will introduce a new e-banking system in about one months time. «Our clients will get new, customer-friendly functionalities,» said LUKB CEO Daniel Salzmann.
«And as a bank we will profit from more efficient procedures in the background, because the new e-banking-solution builds directly on our core banking system Avaloq. This will increase the transmissability of data and the possibilities for self-administration of our customers.»
LUKB also banks on an extension of its branch network, in which CEO Salzmann plans to invest, alongside its projects in digital banking.
