Valiant's consolidated net profit came in at CHF 62.0 million in H1 2022, a rise of 1.3% on the year-earlier period. Operating income was up 5.1% to CHF 222.0 million, and operating profit increased by 2.3% to CHF 75.8 million.
Interest income still robust
Valiant remained strong in the interest business. Net interest income before value adjustments for credit risk was up 2.3% to CHF 173.4 million, while interest expense continued to decline sharply. In H1 2022, value adjustments for credit risk decreased by 8.9% to CHF 6.2 million. Net interest income for the period came in at CHF 167.3 million, a 2.8% rise on the year-earlier figure. Valiant also launched its second covered bond programme, issuing an initial tranche in mid-June as part of a private placement. This enabled the bank to secure long-term funding on the capital market.
Well prepared for the interest rate turnaround
During the period, the Swiss National Bank initiated an interest rate turnaround by raising its policy rate. In response, Valiant stopped charging its private and business clients negative interest starting already on 1 July 2022. In a demanding market environment, Valiant stands out for its active treasury management. It also began preparing for the rise in interest rates well in advance.
Growth in fee and commission income
Fee and commission income increased by 13.3% to CHF 36.5 million. Commission income from securities trading and investment activities was up 5.4% to CHF 25.0 million, driven in part by higher income from asset management and custody fees.
Other operating income and trading income
Valiant also recorded a rise in other operating income, which was up 14.5% to CHF 9.7 million as a result of higher income from holdings. Net trading income rose 7.8% to CHF 8.4 million.
Continued growth in loans and funds due to clients
Valiant recorded growth of 2.5% in client loans, meaning that it had almost achieved its annual growth target of at least 3% by the end of the first six months of the year. Client loans stood at CHF 27.9 billion at end-June 2022. Valiant reported robust growth in funds due to both private and business clients. However, owing to the changing interest rate environment, CHF 334 million in fixed-term deposits were withdrawn by professional counterparties in June, resulting in a 0.8% rise in funds due to clients.
These solid financial results reflect Valiant’s long-term stability. "These strong results show that we are on the right track with our strategy and that our clients continue to trust in us. During this challenging period, we remained focused on providing comprehensive advice and support to our customers," says Ewald Burgener, Valiant's CEO.
Programme to increase profitability
Valiant continued to implement its Strategy 2024 during the period. In February 2022, it added a sixth strategic aim, embarking on a programme to increase profitability. The programme is set to generate initial cost savings in 2022 and will lead to annual savings of CHF 12–15 million from 2024. Valiant will achieve this by introducing cost savings and optimisation measures across the company.
Two new branches
Valiant's regional expansion from Lake Geneva to Lake Constance is continuing as planned. In H1 2022, it opened a branch in Wädenswil, its third location in the canton of Zurich, and one in Pully, which is now the bank's biggest office in French-speaking Switzerland. Additional branches will be opened later this year in Winterthur, Meilen and Uster.
Between 2020 and 2024, Valiant will open a total of 14 additional branches as part of its expansion strategy, creating 170 full-time equivalent positions, including 140 in client advisory services. Since 2017, 48% of the growth in client loans has come from new branches.
Corporate social responsibility
Valiant has always taken a responsible, sustainable approach to its operations. Its objectives and ambitions in that regard span all aspects of its business and apply to all of its stakeholders. When it comes to ensuring equal opportunities, promoting women is a key focus for Valiant. On 1 July, the bank became a member of Business and Professional Women (BPW) Switzerland, the country's largest network for women in business, supporting them in their professional, cultural and social initiatives.
Stable business trend expected
Valiant has a solid capital and liquidity base and a robust business model. 2022 full-year net profit is expected to be slightly above the prior-year figure.
Key balance sheet figures
in CHF millions
in CHF millions
|Total assets||36 495||35 560||2,6|
- of which mortgage loans
|Funds due to clients||22 311||22 139||0,8|
|Headcount (FTEs)||990,4||994,7||-4,3 FTE|
Key income statement figures
in CHF thousands
in CHF thousands
|Net interest income before value|
adjustments for credit risk, and loan losses
|173 435||169 469||2,3|
|Net fee and commission income||36 555||32 258||13,3|
|Net trading income||8 420||7 813||7,8|
|Other operating income||9 731||8 496||14,5|
|Operating income||221 985||211 277||5,1|
|Operating expenses||135 824||125 758||8,0|
|Operating profit||75 774||74 067||2,3|
|Consolidated net profit||62 019||61 207||1,3|
Documents and information on the H1 2022 results are available at: valiant.ch/results.
Images can be downloaded here: valiant.ch/downloads.