BCV Group, Switzerland's second-biggest state-owned bank, had a lower profit in 2016 than in 2015 amid a slowdown of business. Still, the management wants to keep shareholders happy and proposes to pay out a special bonus.
Net income at Banque Cantonale Vaudoise (BCV), the state bank of canton of Vaud, dropped 8 percent to 310 million Swiss francs last year, the company said in a statement today.
Total revenue was down 6 percent to 967 million, with net interest income declining 3 percent to 478 million owing to new provisions for credit risk. BCV said it didn't pass on the negative rates to «the great majority of its customers.»
Client Trading Contraction
Commission and fee income decreased 7 percent to 308 million, reflecting a contraction in client trading volumes, the end of BCV’s online brokerage partnership with PostFinance, and a realignment of the bank’s cross-border wealth management business on a select group of countries.
Net trading income, which derives mainly from client forex trading activities, fell 7 percent to 139 million francs. In 2015, the figure spiked after the central bank gave up on the franc-euro peg. Other ordinary income dropped 20 percent to 42 million, a decrease attributable to a one-off dividend payment by SIX Group in 2015.
Costs Under Control
The bank also posted a drop in extraordinary income. In 2015, the bank received proceeds from the sale of a stake in Swisscanto.
While revenues declined across the board and for diverse reasons, the bank kept its costs under control. Operating expenses declined 1 percent to 509 million. Personnel costs remained flat at 338 million francs.
Special Dividend Payment
The board of directors proposes an ordinary dividend of 23 francs per share and a special distribution of 10 francs per share out of paid-in reserves. The canton of Vaud as majority shareholder will receive 190 million through dividend payments in addition to the 57 million francs the bank had to pay in cantonal and municipal taxes for 2016.
