Zuercher Kantonalbank, Switzerland’s fourth-largest bank, increased profit 6.9 percent in the first half of 2017, helped by higher income across all divisions. The bank also spent more on personnel, for a specific reason.

Zuercher Kantonalbank (ZKB) had net income of 420 million Swiss francs in the first half, up from 393 million in the same period of 2016, the company said in a statement today. Operating profit rose 5.6 percent to 417 million.

Interest income, which contributes about half of the bank’s earnings, added 2.6 percent to 598 million francs. Commission business and services increased 4.9 percent to 378 million. Trading income was up 2.1 percent to 187 million.

Higher Bonuses

Operating costs increased 3.2 percent to 706 million francs compared with the first half of 2016. Personnel costs added almost 7 percent to 501 million, which was due to the number of staff. The headcount (adjusted for part-time employees) actually dropped 1.1 percent to 5,115.

But the bank had to make provisions for bonus payments, a company spokesman told finews.com. The cost-income-ratio however was barely up at 59.2 percent, compared with 59.1 percent a year ago.

Assets under management rose 9.8 billion francs to 274.5 billion in the first six months of 2017. Mortgage loans added 0.9 billion to 78.2 billion francs.

Cautious Outlook

ZKB remains cautiously optimistic about the remainder of the year: «Thanks to its highly diversified business model and its client proximity, Zuercher Kantonalbank has a positive outlook for the second half of 2017 and expects the environment to remain demanding and competitive,» the bank said, adding that it was «confident that it will generate another respectable result in the second half of 2017 as well, given the current business conditions.»