Migros Bank has boosted the mortgage business in 2018, which helped it increase its profit. Client portfolios declined in value due to weak market performance.
Migros Bank, the financial arm of the Swiss retailer, increased profit by 2.3 percent to 228 million Swiss francs ($228 million) in 2018 from a year earlier, the company said in a statement on Tuesday. Mortgages added 4.3 percent to 37 billion francs.
The number of wealth management mandates rose 34 percent, another whopping increase following the 18 percent increase in 2017. The value of the client portfolios dropped due the wobbles on equity markets. The value of all securities held dropped 8.8 percent to 11.2 billion francs.
Challenging Year Ahead
The deposits of clients increased 1.8 percent to 33.9 billion francs, with personal accounts adding 6.3 percent in value and private pension provision accounts (so-called 3a accounts) rising by 2.2 percent.
Migros Bank expects a challenging year 2019 with margins in the interest business remaining under pressure due to the negative rate regime applied by the central bank.
New Offering
The company said its business was in fine shape, not least because of the stronger asset management and the higher emphasis on the banking business with corporate clients.
Migros Bank at the end of August 2018 acquired a majority stake in CSL Immobilien, a real estate firm. Together they will provide real estate services for corporate clients as well as private and institutional investors.
