St.Galler Kantonalbank is laying the basis for further growth

St. Gallen, 23. August 2018

St.Galler Kantonalbank is planning a capital increase of CHF 29.4 million nominally. Additional shares will be issued at a premium. The resulting cash inflow will further strengthen SGKB's equity base.

St.Galler Kantonalbank strives for sustainable and healthy growth. In order to fulfill the corresponding capital requirements and to maintain the strategic leeway, the bank further strengthens its equity base.

Canton retains majority

The Canton of St. Gallen currently has a shareholding of 54.8 % in St.Galler Kantonalbank, which is 3.8 % above the legally required minimum of 51 %. Therefore, without a participation of the canton, a capital increase of CHF 29.4 million nominally is possible. The capital increase, which is fully financed by private and institutional investors, reduces the share of the Canton of St. Gallen to 51 %. The Canton of St. Gallen thus remains the majority shareholder.

The reclassification of 3.8 % of the shareholding in the St. Galler Kantonalbank from the financial assets into the administrative assets requires to be accounted for in the cantonal budget. Therefore, it is submitted to the Parliament of the Canton of St. Gallen as part of the budget 2019. Subsequently, the capital increase will be submitted to the Annual General Meeting of St.Galler Kantonalbank on 24 April 2019.

Strengthen equity

The share capital will be increased by issuing additional shares with subscription rights of the existing shareholders.

With a Tier 1 capital ratio (Common Equity Tier 1) of 14.2 % and a total capital ratio of 16.4%, as of 30 June 2018, SGKB is well capitalized. However, in the medium term, regulatory capital requirements are expected to rise. Therefore, subordinated capital was issued in the form of an additional tier 1 and a tier 2 bond in November 2017 already. With the capital increase now planned, the Tier 1 capital ratio (Common Equity Tier 1) of SGKB will increase to around 15.4 % and the total capital ratio to around 17.5 %.

Roland Ledergerber, CEO of St.Galler Kantonalbank: «We want to grow continuously in our market area and invest, for example, in digital services and the branch network, as well as create new jobs in customer advisory. With this capital increase, we can thus position ourselves even more solidly and expand our ties with the population of the Canton of St. Gallen.»

Contact

Adrian Kunz
St.Galler Kantonalbank AG
Generalsekretariat
St. Leonhardstrasse 25
9001 St.Gallen
071 231 32 04
adrian.kunz@sgkb.ch