Half year results 2018: St.Galler Kantonalbank is growing and investing
St. Gallen, 15. August 2018
In the first half of 2018, SGKB was successful: At CHF 234.7 million, the operating income increased by 4.9 %. The managed assets and loans to clients are growing constantly, by 1.9 % and 0.6 %. Thanks to the healthy credit portfolio, further provisions were dissolved. Operating expenses increased by 5.7% due to the 150th anniversary-activities and the creation of new jobs. With CHF 81.2 million, consolidated profit is slightly higher than in the previous year (+ 0.8 %).
The managed assets increased by 1.9 % to CHF 43.2 billion. The result from commission business and services developed very well and grew by 14.3 % to CHF 60.6 million, partly due to the launch of a new range of products. In the first half of 2018, the volume of discretionary mandates increased by CHF 577.0 million and their proportion of the total managed assets reached 18.1%. Loans to clients reached CHF 25.7 billion (+0.6 %). While the growth of mortgage lending is decreasing, the demand for commercial credits is reluctant. With CHF 147.5 million, the gross result from interest operations could be kept at prior-year level (– 1.3 %), despite the persisting low interests. The growth of the operative business is reflected by a 4.9 % higher operating income of CHF 234.7 million.
Anniversary activities and healthy credit portfolio
The activities for the 150th anniversary, higher expenses for digitalization and for the creation of new jobs lead to higher operating expenses of CHF 133.6 million (+5.7%). The credit portfolio is still of excellent quality, therefore further value adjustments for default risks and losses from interest operations were dissolved. Since these dissolutions were lower than in 2017 (CHF 3.9 million vs. CHF 5.1 million), the operating result at CHF 94.8 million is by 2.6 % lower than in 2017. Overall, a consolidated profit of CHF 81.2 million results, which is, as expected, slightly above the prior-year level (+ 0.8 %).
Outlook year-end results 2018
Given the current economic assessment, SGKB expects a consolidated profit in the range of the successful year 2017.
Investments for the future
According to its strategy, the St.Galler Kantonalbank is focused on the core markets Eastern Switzerland, the remainder of German-speaking Switzerland and Germany. In order to strengthen its market position, St. Galler Kantonalbank is investing specifically in personal on-site advisory. Every year, one to three of the 38 subsidiaries are modernized. Furthermore, until 2020, 30 to 35 new jobs in advisory will be created. At the same time, digitalization is continually pushed: in the past 12 months, clients of SGKB could benefit from more than 10 innovations like an online-mortgage, location-check for real estate or a new mobile banking. The focus on the core markets, which was 2013 initiated, is now concluded with the management-buyout of the subsidiary in Lisbon, which was executed in the second quarter of 2018.
|in CHF million||30.06.2017||30.06.2018||change|
|Operating income||223.7||234.7||+ 4.9 %|
|Operating result||97.3||94.8||- 2.6 %|
|Consolidated profit||80.5||81.2||+ 0.8 %|
|in CHF million||31.12.2017||30.06.2018||change|
|Balance sheet total||32‘598||32‘871||+ 0.8 %|
|Loans to clients||25'496||25'657||+ 0.6 %|
|Managed assets1||42’352||43'162||+ 1.9 %|
|Shareholders’ equity||2‘235||2'220||- 0.7 %|
Full-time equivalents 2, apprentices
|1'060||1'059||- 0.1 %|
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