While stock markets had an impact on the results of Graubuendner Kantonalbank, the bank recorded a plus in new money and customer loans.

Graubuendner Cantonalbank (GKB) posted a 7.7 percent lower net profit of 103.4 million Swiss francs ($107.5 million) in the first quarter, pressured by the corrections in the capital markets, while business income fell to 105.8 million francs, down some 17 percent, the company announced on Thursday morning.

Business volume grew by 2.0 billion francs, or 3.1 percent on a net basis, to 62.4 billion francs, while its investment business recorded net new money inflows of 1.2 billion francs.

Lower Client Assets

Despite the positive inflow of new cash, the negative market performance made its presence felt in client assets, which declined by 4.4 percent to 40.5 billion francs. Assets under management (AuM) were down 4.9 percent to 45.2 billion francs.

By contrast, loans to customers continued to grow, rising 2.5 percent or 539.3 million francs, which was higher than the same period last year. The mortgage portfolio increased by 1.3 percent to 19.0 billion Swiss francs.

Value Adjustments on Securities

The result was adversely affected by the absence of performance fees and value adjustments on securities in the bank's portfolio, it said.

The bank is continuously investing in the further development of its business units. This year, the bank will continue its diversification of income which has been augmented with two new participations. The minority stake of 27.9 percent in Twelve Capital was included in the consolidated result for the first time, and the purchase of the 70 percent stake in BZ Bank was completed on July 7, the statement added.

Investing in the Banking Business of Tomorrow

These items will be included in the consolidated results as of July 1. «We are investing in the banking business of tomorrow, but we are not losing sight of costs or the expansion of the bank's resilience,» says CEO Daniel Fust.

For the full year, GKB expects a consolidated net profit of around 195 million francs and earnings per participation certificate of around 74 francs, based on the assumption of a modest recovery in the stock markets and further interest rate steps by the Swiss National Bank.