Investors profile

Ambitious strategy and goals for the period up to 2024

We aim to significantly increase net profit and achieve a return on equity of 6%. Our target dividend is CHF 5.00, and our payout ratio should remain between 50 and 70%. We will also seek to keep the total capital ratio consistently between 15% and 17% – well above the regulatory minimum.

Geographical expansion, expanded offering and digitisation 

To achieve these goals, we are focusing on six key initiatives:

Growing organically and where possible through acquisitions
To help us deliver long-lasting growth, we will focus our expansion on urban areas and fast-growing regions rather than rural areas, where we already have a solid footprint. In the coming years, we will gradually establish and expand our presence in the canton of Zurich, in French-speaking Switzerland and in north-western Switzerland. We aim to pick up the pace of our expansion, grow our business volumes and leverage our infrastructure, adding 14 new branches and 170 full-time equivalents by 2024. We are also ready to embark on non-organic growth through acquisitions, but we will only consider opportunities that are in line with our business model and corporate culture.

Combining in-person and digital channels
We will continue to invest in digitisation and strengthen our position as an innovator on the Swiss financial market. By going further in combining personalised advice with an enhanced digital offering, we will be able to offer clients a complete banking experience and make their financial lives even easier. We also attach great importance to providing individual support and advice – both in person and digitally.

Further developing our offer
We aim to develop our core competencies in line with our clients’ needs. We want to give our clients comprehensive expert advice and provide them with the “best solution” through a combination of products and services. We are expanding our offering so that it covers our clients’ entire value chains. Examples include the mortgage comparison service that we launched in the St Gallen region and our stake in the AgentSelly real-estate platform.

Supporting our employees
We encourage our employees to keep developing their skills. With our support, they gain the expertise they need to offer clients comprehensive advice.

Streamlining processes
We are looking to further streamline our internal and external processes in order to enhance efficiency.


Programme to increase profitability
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.
 

You can find more detailed information about our strategy and goals in the investor presentation.

Stable and sustainable dividend policy

Valiant pursues a stable dividend policy. In 2019, Valiant increased the target payout ratio from 50% to 70% of net profit, with a dividend of at least CHF 5.00 per share.
 

Dividends

Valiant has paid out stable or increased dividends ever since it was founded in 1997.

Very high asset quality

The quality of the Valiant loan portfolio is very high. 98% of our loans are covered. 93% of the mortgages are first-tier. The loan-to-value of the mortgage portfolio amounts to 63%, and the average residual term stands at a low around 4 years. Valiant is not exposed to regions subject to steep house price inflation. Around 70% of our mortgages were originated in the region of Bern, Lucerne and Aargau.

Non-performing loans amount to 0.16% of total loans. Value adjustments for credit risk are 0.34% of total loans.

Low risk profile

Valiant’s risk profile is low. We are solely active in the retail banking business, with long-term customer relationships in Switzerland. Our main income sources – mortgages and commissions - provide very transparent, stable earnings. There is no proprietary trading.

The low risk profile builds on a restrictive lending policy, a diversified client portfolio, and a successful asset & liability management. Despite a long history of takeovers, there is no goodwill on the balance sheet. The increased lending volumes no not compromise the very high quality of loans.

Find more information about our asset quality and risk profile in our latest investor presentation.

More stable and diversified funding

At Valiant, we are making the most of our various funding options. In the current low interest rate environment, we aim to further stabilise our funding and diversify the instruments we use. To achieve this, we will continue to increase the amount of stable client deposits and reduce our unsecured funding. In the medium term, we will also add to our secured funding through our Valiant covered bonds programme. 

Further reductions in financing costs

Refinancing is a key way of reducing interest costs despite the low interest rate environment and making interest margins more resilient. Since 2013, we have reduced interest expense by more than two thirds. Funding at very low rates will further reduce Valiant’s interest expense going forward.

Find more information about our funding in our latest investor presentation.

Sustainability is in our DNA

We know our clients, and our clients know us. Our clearly defined geographical area of activity, our positioning as a financial services provider, and the close relationships with our clients are the key features of our simple, responsible and sustainable business model.

Sustainability criteria are rooted in our lending policy

The client deposits and savings entrusted to us are funding home owners and SME. Our lending is broken down into many small and medium-sized amounts. Thanks to our regional roots and close client relationships we know the properties and businesses that we finance very well. In line with our careful lending policy, we take a cautious approach towards sectors that have questionable ecological, economic and social aspects.

Valiant operates exclusively in Switzerland

Given the very stringent regulatory environment in Switzerland, our approach to many ecological, economic and social aspects already meets relatively high standards. And given Valiant’s simple business model, we do not finance international projects, which would have to be critically examined in terms of fundamental human rights, large-scale environmental pollution, and forced or child labour. Exposure to sustainability risks is also low.