Livia Moretti took the reins at Switzerland-based Bank CIC in February amid turbulent times for the bank. After years of boisterous growth, she is prioritizing quality at the institution, the Luxembourg-based banker tells finews.com.
The turmoil at Bank CIC (Switzerland) appears to be reverberating once again in figures it published Wednesday. The bank which operates throughout Switzerland, reported a profit of 26.2 million Swiss francs ($28.2 million) for 2022, a quarter less than the previous year.
This was not due to the operating business where income rose nearly nine percent to 190.6 million francs, with the commission business showing the strongest growth of all divisions with an increase of 22.3 percent compared to the previous year. The bank also created new jobs and strengthened its equity capital.
Additional Reserves
The setback in earnings results was due to the formation of additional reserves as a «prudent provisioning policy,» according to the statement.
Risk provisions were strengthened by the new formation of value adjustments for default risks, and reserves for general banking risks, according to the bank. In addition, provisions for latent default risks were made for the first time, in line with the provisioning principles of the parent company, the French financial group Crédit Mutuel.
Full Cooperation with Finma
Although credit irregularities found at CIC's St. Gallen branch amounted to 25 million Swiss francs, they affect only 0.2 percent of the balance sheet total, making the financial impact minimal.
At the beginning of the year, finews.com reported on the irregularities. The bank called in the Swiss Financial Market Supervisory Authority (Finma) because of incidents in St.Gallen, with press speculation over possible criminal proceedings. Asked about this, the bank's CEO since February, Livia Moretti, declined to comment on the matter.
«The Board of Directors proactively took all the necessary measures and informed Finma immediately. We are working smoothly, transparently, and in full cooperation with the regulator on any questions, it asks us in this matter,» was as far as she was willing to elaborate.
Boss Had to Go
The CIC Board of Directors, which is reconstituting itself after various departures, dismissed CEO Thomas Mueller in December. At the time, chairman Eric Charpentier cited differing views on the strategic direction of the bank as the reason for the separation. Other high-ranking employees were also forced out. Moretti wants nothing less than to reinvent the bank.
Her «reinvention mode» includes a strategic review focused on the bank's strengths in Switzerland and mutually beneficial operations with parent company Crédit Mutuel. «These synergies offer enormous potential, from which the bank will be able to draw at the end of the year, once the strategic review is completed, starting in 2024,» Moretti said.
Closing St. Gallen
For Moretti personally, the bank's role as a supporter of companies, entrepreneurs, and executives is particularly important.
For Bank CIC, there are opportunities in the Swiss market that the bank's 440 employees with their know-how, coupled with the tradition of the bank, can take advantage of. «It is important to have a good product, but we can make a difference with other market players in the quality of service. That's what differentiates a boutique from a mall,» Moretti says.
Although the St. Gallen branch is slated to be closed at the end of the year, CIC can support its clients from its headquarters in Basel along with remaining branches in Fribourg, Geneva, Lausanne, Lugano, Lucerne, Neuchâtel, Sion, and Zurich.
Management Team in Place by Autumn
After Bank CIC attracted attention in recent years by growing rapidly, the new boss is emphasizing the pursuit of quality. «Above all, I am focusing on quality, over and above mere quantity, both in terms of the customers served by our bank and the services offered to clients.» Because its parent company is a cooperative group not listed on the stock exchange, it is possible to look beyond short-term returns. The company's thinking and goals are geared towards the long term, Moretti says.
Even so, there are immediate issues at hand. The bank has to fill the gaps in its management and board of directors. Recently, long-serving Matthias Kaelin was promoted to the new operational head (COO). Moretti now plans to appoint all new members of the executive board by the fall at the latest. «I personally continue to listen to the initiatives of our employees and try to promote those who deserve it,» she says. A search is underway to fill two board vacancies on the board.
Banking Benchmarks
The Luxembourg native doesn't feel out of place at a Swiss bank. There are many parallels between the two financial centers and the two countries, says Moretti. Both Luxembourg and Switzerland are internationally oriented, making them benchmarks when it comes to implementing best practices in banking. «Thanks to my previous experience, I had the opportunity to work with multicultural and multilingual teams composed of people from different countries. For all its diversity, Switzerland combines the same ingredients,» she says.
