Basel-based Bank CIC (Switzerland's) record profits in the first half of the year are down to correct strategic positioning and a fair wind from the markets, its CEO says.
CIC (Switzerland) posted an increase in customer funds of 1.49 billion Swiss francs ($1.62 billion) – almost 20 percent more than in the previous year and its first-half profit grew 2.3 percent to a record high of 15.9 million francs.
The Basel-based bank was obviously successful in the first half of 2021. In the first six months of the current year, it recorded an increase in customer funds of 1.49 billion Swiss francs – almost 20 percent more than in the previous year. Half-year profit improved by 2.3 percent to a record level of 15.9 million francs.
Revenues from the commission and services business grew by 11 percent to 19.0 million francs and from its trading business by around 20 percent to 10.0 million francs.
Supporting factors
«Three factors supported the business,» its CEO Thomas Müller told finews.com in an interview.
«Firstly, the moves on the markets helped because they led to a high level of activity by clients. But our strategic orientation in private banking, with which we generate mandates with added value, also had a positive effect.»
«And thirdly, with the additional services, such as succession consulting or the digital service channel CIC eLounge, we have been on the right track for two or three years.»
The bank relies on a multi-channel approach to customer service and calls its strategy «New Swiss Banking».
Low Rates Weigh on Margins
In the interest business, the low rate environment depressed the margins at CIC too, Müller said.
«However, we are taking a cautious approach to risk and have perhaps become even more selective about who we lend to.»
CIC's customer loans grew by 2.8 percent to 9.3 billion francs and mortgage receivables by 2.5 percent to 6.9 billion francs. Net interest income rose by 1.4 percent to 56.2 million francs.
Personal plus Digital Service
Müller went on to say the bank was focusing on new, innovative products.
He gave as an example approaches to automated product creation. Clients could include assessments by their own investment committees, which they could also put together as they saw fit from investment professionals – including those of foreign institutions – family and friends.
«We want to professionalize our clients' investment decisions and make them more familiar with investment know-how,» Müller said.
Basic services could be accessed anywhere, anytime via CIC's digital services. However, customers should – if they so wished – also be able to continue with the traditional method of personal advice. «The multi-channel approach enables great flexibility and best meets customer needs,» he added,
Müller has headed the wholly owned Swiss subsidiary of the French Crédit Mutuel Group for over ten years.
Looking ahead, Müller was moderately bullish after the first-half results. He said potential setbacks always had to be expected in the trading business but that the commission business was less dependent on the markets.
