Half year results 2017: Group profit up 8.9%
St. Gallen, 17. August 2017
In the first half of 2017, St.Galler Kantonalbank achieves a very good result. At CHF 80.5 million, the consolidated net profit is 8.9% higher than in the previous year. The managed assets increase by CHF 2.1 billion (+5.5 %).
Operating income increased
The operating income is CHF 4.3 million (+2.0 %) higher than in the first half of 2016. The basis for this good development is the commission business and services as well as the trading activities.
In the interest operations, the gross result can be maintained at the good prior-year level, despite the persistently difficult low-interest environment. Because in the first half of 2016 value adjustments for credit default risks of CHF 1.9 million were dissolved, and in 2017, value adjustments of CHF 0.8 million were made, the net result from interest operations declines by CHF 3.0 million (-2.0 %).
With ongoing guardedly acting investors, the very pleasing growth in managed assets is crucial for a CHF 2.3 million (+4.6 %) increase in the result from commission business and services. A higher turnover and the good market performance are the main drivers for the favourable increase in the result from trading activities by CHF 5.0 million (+38.5 %) compared to the first half of 2016.
Operating expenses stable, excellent credit portfolio
Both personnel expenses as well as general and administrative expenses are on the previous year's level. The credit portfolio remains in an unchanged excellent condition. In total, CHF 5.1 million value adjustments for default risks and losses from interest operations (reported in the net result from interest operations) and provisions (contained in the operating result) are dissolved (dissolving first half of 2016: CHF 5.6 million).
Operating result substantially higher
As a result of the higher operating income, stable operating expenses and the dissolved provisions, St.Galler Kantonalbank can report as at 30.6.2017 an operating result of CHF 97.3 million. This is CHF 7.3 million (+8.1 %) above the previous year. After tax, a consolidated profit of CHF 80.5 million results, CHF 6.6 million (+8.9 %) above 2016.
Strong growth of managed assets
The net new money of managed assets of CHF 1.1 billion (+2.7 %) is very pleasing. This and the positive market performance lead to an increase in managed assets in the first half of 2017 by CHF 2.1 billion (+5.5 %) to CHF 40.4 billion. The slowdown in the growth of the loans to clients, which was already apparent in the previous year, continues. The increase in mortgage loans of CHF 0.3 billion (+1.5 %) faces a decline in commercial loans of CHF 0.1 billion (-4.2 %). Overall, total loans to clients increase by CHF 0.2 billion (+1.0 %) in the first half of 2017.
Enhanced offering in the investment business
The positive development in the investment business is also a consequence of the advanced new product and service offering, which makes it possible to address even more specifically the different customer needs. Clearly defined management and investment styles are offered in asset management. In this context, the fund offering has also been revised and expanded by new St.Galler Kantonalbank investment funds. In addition, new mandate solutions were launched.
Outlook for the year 2017
For the second half of the year 2017, St.Galler Kantonalbank expects an unchanged market environment and thus an operating business comparable to the first semester. As a result of the 150th anniversary in 2018 and the implementation of various strategic projects, operating expenses will be slightly higher than in the first half of the year. Overall, St.Galler Kantonalbank expects a slightly higher consolidated profit for 2017 than 2016.
|in CHF mio.||30.06.2016||30.06.2017||change|
|Operating income||219.4||223.7||+ 2.0 %|
|Operating result||90.0||97.3||+ 8.1 %|
|Consolidated profit||74.0||80.5||+ 8.9 %|
|in CHF mio.||31.12.2016||30.06.2017||change|
|Balance sheet||32‘201||32‘527||+ 1.0 %|
|Loans to clients||24'921||25'163||+ 1.0 %|
|Managed assets1||38’330||40'429||+ 5.5 %|
|Shareholders’ equity||2‘148||2'150||+ 0.1 %|
Full-time equivalents 2 in accordance
|1'056||1'045||- 1.0 %|
1Managed assets = Client funds (Due to clients in savings and deposits, other due to clients, medium-term notes) and assets under management. Not included are custody assets (=assets that are held solely for transaction and storage purposes and for which the Bank offers no advice to the clients).
2 average Balance