Consolidated semi-annual report of VP Bank Group

Consolidated results

In what continues to be a challenging environment, VP Bank Group generated group net income of CHF 11.5 million in the first half of 2024. This represents a fall of 55 per cent compared to the previous-year period (first half of 2023).

Client assets

As of 30 June 2024, client assets under management amounted to CHF 50.4 billion. This represents an increase of 9 per cent compared to the end of 2023, which is primarily due to the positive market environment. Net new money inflow amounted to CHF 0.5 billion, representing annualised growth in net new money of 2.2 per cent. The average client assets under management rose compared to the previous-year period by 3 per cent to CHF 48.9 billion, and were up by 5 per cent on the previous period (second half of 2023). Custody assets declined from their level at the end of December 2023 by CHF 0.4 billion to CHF 4.3 billion. Overall, client assets including custody assets as at 30 June 2024 totalled CHF 54.7 billion.

Income statement

Operating income

VP Bank generated operating income of CHF 162.6 million. This represents a decline of 14 per cent compared to the previous-year period.

Net interest income declined compared to the previous-year period by 27 per cent and compared to the previous period by 15 per cent to CHF 52.5 million. Clients have invested their liquid assets in high-yield investments and securities, which is reflected accordingly in the figure for interest income. Interest expenses increased compared to the previous-year period by CHF 32.1 million (41 per cent) to CHF 110.2 million, whilst interest income rose by CHF 12.5 million (8 per cent) to CHF 162.8 million.

Net income from commission business and services totalled CHF 68.3 million, which was slightly down by CHF 1.5 million (2 per cent). This is largely due to the segment mix with above-average growth in lower-margin client assets under management in Asset Servicing.

Income from trading activities amounted to CHF 38.0 million and is comparable with the figure of CHF 38.7 million from the previous-year period. Trading income continued to benefit from the USD/CHF interest rate differential.

Income from financial investments made a positive contribution of CHF 3.5 million to the semi-annual results, as did other income totalling CHF 0.3 million.

Operating expenses

Operating expenses fell to CHF 148.8 million, representing a 6 per cent decrease compared to the previous-year period and a 4 per cent decrease compared to the previous period.

Personnel expenses declined compared to the previous-year period by almost 5 per cent to CHF 85.7 million. The amount set aside for variable compensation was aligned with the results of the reporting period.

General and administrative expenses increased by 7 per cent to CHF 43.7 million, which was attributable to the positive effect of a VAT refund during the previous-year period.

Depreciation and amortisation fell to CHF 18.7 million. Increases in depreciation and amortisation seen in past periods as a result of strategic investments has reached its peak. In addition, depreciation and amortisation were aligned with the actual useful life of strategic projects.

Valuation adjustments, provisions and losses in the reporting period amounted to CHF 0.7. million.

Balance sheet

Total assets amounted to CHF 11.7 billion. Compared to 31 December 2023, this figure has remained stable.

Deposits

On the liabilities side, client funds amounted to CHF 9.7 billion, which represents an increase of 2 per cent.

Short-term financial assets

As of the end of June 2024, CHF 1.8 billion was held as a deposit at the Swiss National Bank. A further CHF 1.3 billion is attributable to receivables from banks or money market papers, both with short term maturities. These CHF 3.1 billion covered 31 per cent of client deposits.

Loans

VP Bank had CHF 5.8 billion in outstanding loans, of which CHF 3.5 billion were mortgage loans. Loan volume during the reporting period rose by 5 per cent compared to December 2023.

Equity capital and liquidity

VP Bank Group has a very strong capital base and high liquidity. As of 30 June 2024, the tier 1 ratio was 26.1 per cent, and the liquidity coverage ratio was 309.5 per cent.