Hypothekarbank Lenzburg posted a significantly lower profit in 2020. The reason was not the Corona crisis. The regional bank is in full investment mode. This should pay off one day.
Mortgage bank «Hypi« Lenzburg continued its investments in digitization and technology in the past financial year. The efforts are now reflected in a significantly lower profit for 2020, the bank said on Friday. Net profit fell by 14 percent to 18.1 million Swiss francs ($20.4 million).
Hypi Lenzburg made progress in its operating business, increasing gross profit by almost 3 percent to 57 million francs. Income was higher in both the interest business and the commissions' business; one factor here was that Hypi was able to borrow funds from other banks at negative interest rates.
Essential Investments
But income did not keep pace with costs: personnel expenses rose as a result of the introduction of new digital workstations, and material expenses increased significantly because the bank expanded its own data center. For CEO Marianne Wildi, these were indispensable investments in the future.
In fact, Hypi Lenzburg was also extremely active last year in terms of expanding its ecosystem and its open banking strategy.
Higher Customer Deposits Thanks to Neon
The bank is apparently reaping its first rewards through its cooperation with the Swiss smartphone bank Neon. The startup contributed no less than 152 million francs in net new money. Overall, customer deposits at Hypi rose by 9 percent to 4.3 billion francs.
Shareholders are to receive a dividend of 110 francs per share.
