Valiant is on track with its plans to implement its Strategy 2020–2024 and is continuing on its growth trajectory. It achieved consolidated profit of CHF 29.7 million in the first quarter of 2023, equivalent to a year-on-year increase of 7.8%. Operating income climbed by 12.9% to CHF 121.6 million. The operating result rose by 29.9% to CHF 44.6 million.
“Despite the protracted turbulence in the markets, our simple and proven business model meant we were able to achieve a successful first quarter and make significant progress at the operating level,” says Valiant CEO Ewald Burgener. “The trust our clients place in us confirms we are on the right path. Proximity to our client base remains key for us. One of the ways we are demonstrating this is by passing higher interest rates on to clients immediately.”
Interest income remains strong
Valiant has prepared well for the challenging environment posed by rising interest rates, and active balance sheet management enabled it to grow interest income in the first quarter of 2023 as well. Moreover, growth in client loans had a positive impact on interest income. The gross result from interest operations came to CHF 96.2 million, up 12.3% year on year. “Client loans are used to finance homes and SMEs in Switzerland. The Valiant credit portfolio is broadly diversified and of extremely high quality,” said Ewald Burgener. The net result from interest operations was CHF 90.8 million, up 10.1% on the previous year.
Result from commission business and services
The result from commission business and services rose by 1.6% year on year to CHF 18.9 million. Volatility on the financial markets was reflected in the investment business, which saw a 4.7% year-on-year decline in commission income from securities trading and investment activities.
Other result from ordinary activities and operating expenses
The result from trading activities climbed by CHF 6.9 million (+187.7%) to CHF 10.6 million. The main factor behind this sharp rise was once again increased income from forward foreign exchange contracts. Other result from ordinary activities fell by 54.8% to CHF 1.3 million, primarily as a result of lower income from participations. Operating expenses rose as planned by 5.9% to CHF 71.8 million as a result of investments in digitalisation and the expansion.
Reserves for general banking risks strengthened
In view of the increase in operating result, which was mainly driven by interest income, risk provisions of CHF 8.0 million were added to the reserves for general banking risks in the first quarter. This boosted Valiant's capital position, which remains well above regulatory requirements.
Growth in client loans and funds due to clients
Client loans increased by 1.3% to CHF 29.0 billion. Amounts due in respect of customer deposits and cash bonds reflected the confidence placed in us. These also increased by CHF 511.7 million in the first quarter of 2023, a rise of 2.3%. As a result, funds due to clients exceeded the CHF 23 billion mark for the first time (CHF 23.1 billion). Both the Savings Account Plus product and other accounts contributed to this.
Strategy 2020–2024 on track
Valiant is resolutely pursuing its strategy. Regional expansion from Lake Geneva to Lake Constance is moving ahead as planned. So far, 11 of the planned 14 branches have been opened. Valiant will be opening its new Schaffhausen branch in June 2023. This will mean Valiant has a presence in 15 Swiss cantons. These will be joined by Altstetten and Muttenz by the end of 2023, completing the regional expansion for this strategic period.
The first savings under the programme to enhance profitability were achieved in 2022. In order to reach the annual savings target of CHF 12–15 million by 2024, cost-cutting and optimisation measures are being implemented across the bank. Another client area was converted in the first quarter. The impact of the programme to increase profitability will be clearly evident by the end of 2023.
It pays to save with Valiant
Valiant is continuing on its path and has been passing on interest rate hikes to its clients immediately. Since negative rates came to an end in July 2022, the bank has increased the interest rates on its range of savings products four times. The Savings Account Plus, which offers a preferential interest rate, has been available since February 2023. New Savings Account Plus deposits earn interest of 1.5%. For more information see: valiant.ch/sparkonto-plus
Outlook
Valiant expects consolidated net profit to be higher in the current year.
Key balance sheet figures
| 31/03/2023 in CHF millions | 31/12/2022 in CHF millions | Change as % | |
|---|---|---|---|
| Total assets | 37 126 | 35 730 | 3,9 |
| Client loans - of which mortgage loans | 29 049 27 523 | 28 680 27 137 | 1,3 1,4 |
| Funds due to clients | 23 063 | 22 552 | 2,3 |
Key income statement figures
| 31/03/2023 in CHF thousands | 31/03/2022 in CHF thousands | Change as % | |
|---|---|---|---|
| Gross result from interest operations | 96 225 | 85 705 | 12,3 |
| Result from commission business and services | 18 907 | 18 602 | 1,6 |
| Result from trading activities | 10 604 | 3 686 | 187,7 |
| Other result from ordinary activities | 1 326 | 2 932 | -54,8 |
| Operating income | 121 647 | 107 734 | 12,9 |
| Operating expenses | 71 801 | 67 801 | 5,9 |
| Operating result | 44 586 | 34 324 | 29,9 |
| Consolidated profit | 29 692 | 27 544 | 7,8 |
Additional data
| 31/03/2023 | 31/12/2022 | Change as % | |
|---|---|---|---|
| Headcount (FTEs) | 976,3 | 981,5 | -0,5 |
Documents and information on the quarterly results are available here: valiant.ch/results.
Images can be downloaded here: valiant.ch/downloads.