Zürcher Kantonalbank Reports Lower Profit

Zürcher Kantonalbank Reports Lower Profit

More new money, higher client assets, but less profit: Zürcher Kantonalbank is downsizing. The reason for this lies, among other things, in the bank's most important revenue-generating business.

In the first half of the year, Zürcher Kantonalbank (ZKB) generated operating income of 1'560 million francs, which is 7,5 percent less than in the same period last year. According to figures released on Friday, the group’s profit amounts to 601 million francs reflecting an 11 percent decline.

In the interest business, the most important revenue pillar, a net result of 858 million francs was achieved. While this is a solid performance, it is slightly overshadowed by the extraordinary result of  946 million francs in the previous year: the decrease amounts to 9,3 percent.

Increased Earnings from Commissions and Services

ZKB performed better in the commission and service business. Here, a result of 509 million francs was achieved, corresponding to an increase of 7,1 percent.

This more than compensated for the reduced income resulting from the launch of the free ZKB banking offer. This is essentially due to the commission income from the securities and investment business (557 million francs), which rose by 9,4 percent.

Net New Money Inflow of 10 Billion francs

Client assets amount to 488,7 billion francs, representing an increase of around 37,9 billion francs since the beginning of the year. According to a statement, this was due to the positive market development (price, interest, and currency development) of 24,1 billion francs and the net new money inflow of 10.0 billion francs.

In the trading business, ZKB was riding high last year with 252 million francs; this year, the first half saw a result of only 177 million francs.

Higher Personnel Costs

Operating expenses rose by 5 percent year-on-year to  859 million francs. This is due to increased investments and a 3 percent rise in personnel costs (additional positions).

ZKB Looks Optimistically to the Second Half of the Year

«The extraordinarily high interest result from last year will not be repeated to the same extent in 2024. Nevertheless, I am confident that we will achieve a respectable result. With our growth strategy in private banking, corporate banking, and asset management, we are operationally very well positioned despite the normalized interest rate environment,» said CEO Urs Baumann.