Valiant exceeded its targets in 2020 and remained on course with the implementation of Strategy 2024. Consolidated net profit increased 0.7% year on year to CHF 121.9 million. Operating income came in at CHF 413.1 million, up 1.9% on the previous year. Operating profit rose by 2.9% to CHF 147.0 million. “We turned in a very strong operating performance,” says CEO Ewald Burgener. “Thanks to our clients’ strong trust in us and our employees’ outstanding work, we successfully navigated the coronavirus pandemic in 2020. And we are advancing on our growth trajectory.”
Strong operating performance in core business
Interest income, a key driver of Valiant’s business performance, rose sharply in 2020. Net interest income before value adjustments climbed by a solid 5.0% to CHF 330.4 million. At the same time, interest expense declined, thanks in part to the bank's covered bond issues. Valiant recognised CHF 14.3 million in value adjustments for credit risks, in keeping with the bank’s cautious lending policy. Even during the coronavirus pandemic, Valiant’s loan portfolio remained robust and of a high quality. Net interest income after value adjustments came in at CHF 316.1 million, representing an increase of 2.3% on the previous year. Commission income from securities trading and investment activities climbed by 5.9%. Net trading income was also higher, up 11.8%. Valiant’s other operating income declined by 0.6%, primarily as a result of lower income from holdings.
Growth targets exceeded
Client loans increased by 4.3% to CHF 25.9 billion at the end of 2020. COVID-19 loans accounted for 1.2 percentage points of that increase. Client deposits climbed by 9.6% to CHF 21.0 billion. Once again, this increase reflects the strong trust placed in Valiant by its customers. Valiant's successful implementation of its growth strategy was also reflected in the cost/income ratio before value adjustments for credit risks, which fell from 57.0% to 56.5%, even though Valiant invested in its expansion and created 19.9 additional FTEs. Valiant’s active cost and business-process management paid off, with operating expenses increasing by only 3.2% as a result of the expansion.
Innovative front-office areas
Valiant continues to provide its clients with simple, personalised services despite the coronavirus pandemic. Clients can obtain advice in person at Valiant branches. Alternatively, they can meet with an advisor by video, either from one of the new front-office areas or from home. Ewald Burgener says: “Our innovative branch concept has proved its merits. Even in challenging circumstances, our clients are able to rely on us and make use of our services at any time.” Most of Valiant's branches are equipped with the new front-office areas, where clients are greeted via video and given advice based on their needs. They can handle straightforward transactions on their own in a separate room. However, advisors are always available on site to assist clients on all financial matters. In 2020, Valiant equipped a further 17 branches with these modern front-office areas. Over 60 branches have now been fitted out in this way.
New website and mobile app
Valiant will continue to enhance its digital channels in 2021. The bank’s website will be revamped to give it a more client-friendly design and improve navigation. Valiant’s mobile app will also be updated at the end of 2021. In addition, Valiant will release its own Twint app to replace the current prepaid solution. “We want our services to be as easy as possible for our clients. That’s why we are constantly improving our digital channels,” says Ewald Burgener.
Commitment to sustainability
As a bank with local roots, Valiant has been committed to sustainability for many years. In 2021, it will take that commitment a step further by integrating sustainability into its core business even more comprehensively. Valiant is also in the process of developing a sustainability approach for its investment business – one that is tailored to its own specific needs. In addition to launching new sustainability-oriented products, it is also training client advisors in this area. Going forward, clients will be able to obtain more comprehensive advice on sustainability-related matters.
More branches to be opened
Valiant wants to leverage economies of scale and is expanding from Lake Geneva to Lake Constance. It opened a branch in Rapperswil in November 2020. After temporarily slowing down its geographical expansion last year because of the coronavirus pandemic, it is now picking up the pace once again. Valiant will open a branch in Oerlikon on 31 May 2021 and another in Liestal on 21 June. Premises have already been found for the new branches in Bülach, Frauenfeld, Wohlen and Wädenswil, which will open in late 2021 or 2022. Under its expansion strategy, Valiant will open a total of 14 additional branches by 2024, creating 170 FTEs, including 140 positions for client advisors.
Stable business trend expected
Valiant forecasts a steady business trend for this year. It has a strong liquidity and capital base and a stable business model. Valiant expects 2021 consolidated net profit to be in line with the 2020 figure.
Proposal for unchanged dividend
At the Annual General Meeting on 19 May 2021, the Board will ask shareholders to approve an unchanged dividend of CHF 5 per share. Given the uncertainty caused by the coronavirus pandemic and in accordance with COVID-19 Ordinance 3, the Board of Directors has decided that shareholders will not be able to attend the Meeting in person.
Changes to the Board of Directors
Franziska von Weissenfluh, who has been a member of the Board of Directors since 2011, will not be standing for re-election at the upcoming Annual General Meeting. The Board of Directors wishes to take this opportunity to thank her for her many years of valuable service to Valiant. Roger Harlacher, who has vast management experience, will be recommended as the new Board member. Mr Harlacher, 55, has been with Zweifel Pomy-Chips AG for 25 years. He served as CEO of the company from 2015 until June 2020 and then joined the Board of Directors. In addition, he holds a number of positions in the communications and advertising industry, including as Chairman of the Association of Swiss Advertisers.
Documents and information on the 2020 annual results are available here: valiant.ch/results. Pictures can be downloaded here: valiant.ch/downloads