In 2021, Valiant recorded consolidated net profit of CHF 123.1 million, an increase of 1.0% on the year-earlier period. Operating income climbed by 4.2% to CHF 430.6 million. «We are expanding into new markets and growing in our core region, and the results are encouraging,» says CEO Ewald Burgener. «This confirms that with our strategy, we are able to generate growth and exceed our targets.»
Strong interest business
As in the previous years, Valiant’s interest business remained strong, driven by active treasury management and the issuance of covered bonds. Net interest income before value adjustments for credit risk and loan losses climbed by 3.4% to CHF 341.6 million. Valiant’s loan portfolio has proved to be robust during the coronavirus pandemic, with Valiant recognising value adjustments for credit risk of CHF 14.2 million in 2021. This resulted in net interest income of CHF 327.4 million, up 3.6% on the previous year.
Significant growth in fee and commission income
Fee and commission income rose by 9.7% to CHF 68.7 million, well above the annual growth target of 3%. Commission income from securities trading and investment activities was particularly robust, rising by 15.3% year on year. This was mainly attributable to strong growth in client assets invested, with net new assets amounting to CHF 500 million.
Other income and operating expenses
Other operating income fell by CHF 2.8 million (–13.4%) to CHF 18.3 million due to lower income from holdings. Net trading income climbed by CHF 2.9 million (22.1%) to CHF 16.1 million. Operating expenses rose by 5.3% to CHF 254.4 million, in line with the bank’s plans.
Growth in loans and funds due to clients
Valiant’s client loans stood at CHF 27.2 billion, rising by 5.3%, which is well above the annual growth target of 3%. Since 2017, 46% of the growth in client loans has come from the new branches opened under the expansion strategy. Funds due to clients climbed by 5.3% to CHF 22.1 billion. Ewald Burgener: «We seek simple financial solutions for our clients day after day. The growth in loans and funds due to clients reflects the trust placed in Valiant as a down-to-earth and competent retail bank.»
Accelerated expansion into new regions
Valiant is driving forward with its expansion into new market regions. Five new branches were opened in 2021, and this year will see new openings in Wädenswil, Pully, Meilen, Winthertur and Uster. Between 2020 and 2024, Valiant will open a total of 14 additional branches.
In 2021, Valiant rolled out its new sustainability-focused strategy funds. Clients can now invest their money in socially responsible companies that are committed to preserving the environment, ensuring people’s well-being and contributing to reducing carbon emissions. For the years ahead, Valiant has developed a plan to embed sustainability even more firmly within the bank.
Programme to increase profitability
Valiant is implementing its strategy successfully and pressing ahead more swiftly than expected with its regional expansion. In 2022, it will take the next step in the process and launch a programme to increase profitability, set to be completed by 2023. Valiant has already set aside provisions of CHF 12.9 million to implement the programme. This increase in provisions led to a 2.1% decline in operating profit in 2021. The programme is set to generate initial cost savings in 2022, and from 2024 it will lead to annual savings of CHF 12–15 million. Valiant expects its return on equity to increase by around 0.5 percentage points. «We are resolutely pursuing our strategy and adding another strategic aim to it. I am convinced that in this way we will be ideally positioned to face the future,» says Ewald Burgener. Valiant has adopted the following measures:
The branch network will be reduced by 23 branches. This will be done by closing branches that are located close to another branch in Valiant’s core region. The expansion regions of eastern Switzerland and Zurich and the new branches in western Switzerland will not be affected by this. Valiant will announce which branches are to be closed on 18 February 2022.
Valiant is focusing on its proven branch concept and will modernize the front areas in a further six branches, equipping them video reception systems and digital services. This is in response to the decline in client interactions at physical counters and changing client needs, which include more flexible opening hours and more digital services, coupled with demand for personalised advice. Between 2018 and 2021, Valiant revamped more than 60 branches that previously had conventional counters.
Between 2020 and 2024, Valiant will create 170 full-time-equivalent positions as part of its expansion strategy, including 140 client advisors. Valiant is adhering to this plan to expand the workforce. The optimisation of the branch network and further measures to increase efficiency will save 50 full-time-equivalent positions. Valiant’s goal is to achieve the planned headcount reduction through natural attrition. Under the expansion strategy, there will be a net increase in full-time-equivalent positions, albeit to a lesser extent than originally planned.
Valiant expects to see a stable business trend in 2022, with consolidated net profit slightly above that in the prior year. At the Annual General Meeting, the Board of Directors will recommend an unchanged dividend of CHF 5.00 per share. Due to the uncertainty surrounding the coronavirus pandemic and in order to protect the health of Valiant’s shareholders, the Board of Directors has decided that shareholders will not be able to attend the Annual General Meeting on 18 May 2022 in person.
Key balance sheet figures
in CHF millions
in CHF millions
|Total assets||35 560||33 184||7,2|
- of which mortgage loans
|Funds due to clients||22 139||21 028||5,3|
Key income statement figures
in CHF thousands
in CHF thousands
|Net interest income before value adjustments for credit risk and loan losses||341 644||330 411||3,4|
|Net fee and commission income||68 743||62 659||9,7|
|Net trading income||16 103||13 187||22,1|
|Other operating income||18 326||21 166||-13,4|
|Operating income||430 609||413 122||4,2|
|Operating expenses||254 353||241 604||5,3|
|Operating profit||143 959||147 030||-2,1|
|Consolidated net profit||123 125||121 869||1,0|
Documents and information on the full-year results are available at: valiant.ch/results.
Images can be downloaded here: valiant.ch/downloads.
The media and analysts conference on the full-year figures will be held at 10:00 a.m. (CET) on 17 February 2022. Access to live stream: valiant-live.ch/mak2022