Swiss mortgage bank «Hypi« Lenzburg's half-year results are marked by market turbulences, yet the bank is sticking to its current investment strategy.
Hypothekarbank Lenzburg's operating income and net profit fell in the first half of 2022 it said in a statement Thursday (in German), citing a challenging environment.
Nonetheless, CEO Marianne Wildi is satisfied with the half-year results and is sticking to the regional bank's current investment strategy, the statement said, adding that progress has been made in transforming the business model into a hybrid financial services provider.
Despite low-interest rates, the bank was able to increase its income from the central interest business. The bank attributes the increase in net income to 29.7 million Swiss francs mainly to higher interest and dividend income from investments and to income from the negative interest arbitrage business with other banks and institutional clients.
Interest Arbitrage
Yet with the interest rate increases by the Swiss National Bank, the Bank expects proceeds from its arbitrage activities from negative interest to decline.
New client money from the bank’s cooperation partner Neon helped boost client deposits, which grew by a total of 3.2 percent to 4.9 billion Swiss francs.
In the securities and investment business, the good result of the previous year was equaled despite turmoil in the financial markets. However, the price turbulence also led to reduced book values in the bank's positions and left its mark on the performance of client portfolios, according to the statement.
