SIX Group, the operator of Switzerland’s stock exchange, has had a massive decline in profit last year. The company is working on a centralized back office for the financial market – the 'Superbank'.
SIX Group net income fell to 221.1 million Swiss francs in 2016, down 69 percent compared with a year earlier, the company said in a statement today.
The record profit of 2015 was the result of one-off items and was boosted by strong trading after the central bank decision to do away with the franc-euro peg.
Earnings before interest and tax (EBIT) at the stock exchange business declined to 69.3 million francs, down 19 percent.
Unit Performance
The Securities Services business had an EBIT of 70.6 million francs, up 50 percent, following a property sale in Zurich. The Financial Information unit had EBIT of 26.7 million, down 50 percent, due to restructuring costs arising from the integration of France into the global functional organization, SIX said.
The Payment Services business area was the most profitable part of SIX. EBIT rose 4.2% to 91.8 million francs. The unit benefited from the dynamic growth in cashless payments. The number of transactions is rising continuously – in the acquiring business of SIX throughout Europe, transactions are up 11 percent year-on-year.
Challenging Environment
SIX said it was pleased about the result achieved last year, given the challenging environment. Still: «The environment in which SIX operates will remain challenging, as will the margin and cost pressure,» said Urs Rueegsegger, SIX Group CEO. «SIX will take these circumstances into account as it continues its growth path. The development and provisioning of new products and services are just as important as continuing our strict cost discipline.»
SIX Group is convinced that the financial industry is undergoing deep-reaching change. It aims to develop technological solutions to help companies tackle the challenges involved.
«SIX already offers banks the option of optimizing their business processes through targeted outsourcing, such as operating ATM machines for banks,» the company said. «The medium – term goal is to bring together undifferentiated activities on the central infrastructure of SIX.»
The 'Superbank' Project
SIX is expanding its central services on a project basis. It also is working with its owners and partners to test the possibility of setting up a central back office in Switzerland.
Should SIX and its partners realize the latter project, it would essentially mean that the grand plan for a transactions bank – today called ‘Superbank’ – would became a reality. UBS boss Sergio Ermotti and his colleague at Credit Suisse, Tidjane Thiam, have both been advocates of such a solution. Rueegsegger himself said: «We can do it.»
