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If you don’t like numbers you should stop at this point. Those in charge of Zürcher Kantonalbank (ZKB) should be happy for everyone who does not read. Business figures paint a picture of a bank making so much money thanks to a government subsidy guarantee that it has been forced to shrink its profits, and its profit boom cannot be slowed even by collective wage excesses.
But let’s start with something positive: Last week, the country’s largest cantonal bank announced that it would distribute 528 million francs to the canton of Zurich and its municipalities. “These funds enable numerous social, economic and ecological projects,” the bank says. In addition to this “record dividend”, ZKB announced that it would establish a charitable foundation of 25 million francs. In addition, fees for account and debit cards have also been eliminated.
Such generosity makes one wonder: Is ZKB unsure of its own success?
The fact is that the bank artificially reduced its profits in 2023. A surplus of 1,238 million francs was officially reported. That’s 179 million more than in 2022, when the billion mark was first broken.
Even more profit
In reality, ZKB made even more profits. A further 225 million francs were allocated to the “general reserve for banking risks”. If this had not been done (as in previous years), a profit of almost 1.5 billion francs would have been made and it would probably be discussed how such profit jumps were possible.
The answer is clear: ZKB passes on only a small part of the increased basic interest rates to savers. Moreover, in times of crisis, it is particularly beneficial for the canton to be responsible for all savings deposits when necessary.
tax exempt bank
ZKB had to pay only 30 million francs for this state guarantee in 2023. Not a bad deal, especially since the band is tax-free.
What makes the state bank’s profit boom even more remarkable is that it occurred despite huge wage increases.
Compared to the previous year, personnel costs per capita decreased slightly from 219,000 francs to 213,000 francs, but are still 40,000 francs more than ten years ago. In 2013, the average ZKB banker cost 173,000 francs.
Such a jump in revenue is unprecedented even in the well-paid financial sector: personnel expenses per full-time position at Postfinance have increased by 14 percent in ten years, reaching 140,000 francs in 2022. The average cost of an employee at Raiffeisen is 144,000 francs, 6 percent more than in 2013 (see chart).
These comparisons hardly impress those in charge at ZKB. “A recent analysis confirmed that ZKB’s compensation model is market-compatible given its size, location and complexity of its business model,” a spokesperson writes. However, the bank does not want to disclose who is conducting this investigation. “We ask for your understanding that we cannot publish the analysis and provide any information about the technical experts involved.”
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
