St.Galler Kantonalbank: Healthy growth, profit slightly lower
ad hoc announcement pursuant to Art. 53 LR
The St.Galler Kantonalbank enjoys an undiminished high trust from the client base and grows further in its core markets. Market-driven valuation adjustments affect the consolidated profit which is CHF 2.8 million (-3.0 %) slightly below the excellent previous year.
The loans to clients increase by 3.3 % to CHF 29.5 billion, particularly due to new mortgage contracts (+3.7 %) by private customers and real estate investors. In the investment business, net new money of CHF 850.5 million was acquired, which is equivalent to an annualized growth rate of 3.0%. Particularly in the client groups «private customers Switzerland», «institutional investors» and «external asset managers», St.Galler Kantonalbank registers an ongoing strong growth. The assets under management decrease by 6.6 %, affected by the negative development of the markets.
Profit slightly below previous year
The consolidated profit of CHF 91.2 million is CHF 2.8 million lower (-3.0 %) than in the first semester of the previous year. When combined, the two main revenue pillars, commission and service business (+5.1 %) and the net result from interest operations (-2.4 %) are slightly positive whilst market-driven valuation adjustments reduce the result from trading activities (-15.8 %) and the other result from ordinary activities (-85.9 %). The operating expenses increase as expected (+1.2 %) due to slightly higher personnel expenses.
Economy of Eastern Switzerland robust, but with uncertain outlook
Last semester, Eastern Switzerland enterprises have benefited from full order books. The «Ostschweizer Konjunkturboard», which consists of experts from SGKB and the regional chamber of commerce, expects the business development to cool down, especially in the industrial sector. Further rising prices as well as the ongoing supply bottlenecks lead to higher costs and lower margins. The tough geopolitical situation increases the uncertainty in terms of the energy supply. The shortage of workers and professionals has further accentuated in many sectors.
The credit portfolio of the St.Galler Kantonalbank is still in a very good condition. No increased risks are identified. In the valuation adjustments and provisions from the credit business, compared to the previous year, a positive impact of CHF 3.9 million net results.
Outlook results 2022
Based on the uncertain geopolitical and economic situation, St.Galler Kantonalbank adjusts its expectation for the business year 2022 and assumes a consolidated profit below the previous year, but with a constant dividend.
|In CHF million||1st semester 2022||1st semester 2021||change|
|Operating income||245.9||253.2||- 2.9 %|
|Operating result||106.9||109.0||- 1.9 %|
|Consolidated profit||91.2||93.6||- 3.0 %|
|In CHF million||June 30, 2022||Dec. 31, 2021||change|
|Balance sheet total||40'412||39'851||+ 2.1 %|
|Total loans to clients||29'460||28'517||+ 3.3 %|
|Managed assets¹||52'141||55'813||- 6.6 %|
|Shareholders' equity||2'674||2'684||- 0.4 %|
|+ 0.4 %
- 0.1 %
¹) Managed 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).
The interim financial statements according to the Financial Reporting Regulation FINMA, detailed financial data as well as video footage for use can be found here: www.sgkb.ch/finanzzahlen
Shareholder letter: www.sgkb.ch/aktionaersbrief
Contact for investors and analysts
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Alternative Performance Measures:
The alternative performance measures used outside the scope of generally accepted accounting principles as defined in the corresponding SIX Directive are explained (in German) on the SGKB website www.sgkb.ch/alternative-performancekennzahlen.