Luzerner Kantonalbank in the first quarter improved in some areas of its business, but the economic downturn that followed the outbreak of the coronavirus still depressed its profit.
Luzerner Kantonalbank (LUKB) had a net profit of 46.9 million Swiss francs ($48 million) in the first quarter of 2020, down 7.4 percent from a year earlier, the company said in a statement on Tuesday. The bank attributed the drop to the effect that the pandemic had on the economy so far.
The operative business of the bank, which is based in Lucerne, improved across the business – with trading adding more than 50 percent. LUKB’s own investments dropped in value and the book loss of 16 million francs led to the decline in profit.
Difficult Times Ahead
The pandemic prompted swift government action across the world, leading to a halt of many industries and prompted a crash of the stock exchanges.
LUKB under CEO Daniel Salzmann expects coming quarters to be equally affected by the coronavirus crisis and therefore also expects lower profits. The company likely will make a full-year profit in the region of the period between 2016 to 2019, which would mean 187 to 205 million francs.
Strategic Goals to Be Attained
Still, LUKB sees no reason to revise its goals for the strategic period of 2016 to 2020. One of the targets was to generate an aggregated profit of 950 million francs and a cost-income ratio below 50 percent.
Client loans increased 925 million francs to 33.6 billion in the first quarter, with 353 million in mortgages and 135 million francs in emergency loans for firms affected by corona.
