Raiffeisen will write significantly more profits in 2022

Raiffeisen Group’s profit rose 10.6 percent to CHF 1.18 billion last year, as Switzerland’s third largest banking group announced on Thursday. Business success as a measure of operating result increased 6.8 percent to 1.35 billion. The group also sees itself on the right track in its strategy: Today, Raiffeisen is also an investment bank, the press release quoted CEO Heinz Huber.

Mortgage loans rose another 3.7 percent to CHF 203.7 billion at year-end, marking the first time the banking group has exceeded CHF 200 billion. Raiffeisen’s market share in the Swiss mortgage business remained at 17.6 percent last year, according to reports.

Customer deposits have calmed slightly (+1.5% to CHF 204.8 billion), but Raiffeisen sees a slight increase in their Swiss market share here. In the challenging investment climate of 2022, there was only a small increase in total client assets managed (+0.4 percent to 242.2 billion), despite a net net new money flow of 3.9 billion in retirement and investment accounts.

Interest rates also increased

Overall, Raiffeisen banks generated total revenues of CHF 3.53 billion last year, which is a good 4 percent increase over the previous year. The group was able to grow significantly, with a 10% increase, particularly in its commission and services business, where it benefited from growth in its supply and investment business. Together with the trading business (income +4.0%), the share of the so-called unregistered business rose to 24 percent.

But Raiffeisen also generated more revenue from the interest business, which remains the mainstay of revenue (+5.6 percent to 2.5 billion). The increase was slightly above that of the previous year.

However, operating expenses also increased (+4.1%). The Bank attributes the cost increases primarily to the implementation of the group strategy and the expansion of its advisory capacities. The expense/income ratio improved slightly to 55.9 percent.

New members of the cooperative

With the independence of branches that were previously directly subordinate to the Swiss Raiffeisen central organization, the group succeeded in gaining a large number of new cooperative members: According to the announcement, more than 47,000 people subscribed to shares in the six new Raiffeisen banks. As a result, Raiffeisen now has a little over 2 million members across Switzerland.

The equity of the banking group increased. According to the information on the creation of additional compensation funds, Raiffeisen already meets the requirements as a systemically important bank. Due to its good capitalization, it does not benefit from transitional provisions until 2026.

Despite the challenging market environment, the banking group expects a “solid workflow” in the current year. While the Swiss domestic market has so far been unaffected by the high interest rate, Raiffeisen now expects slightly weaker momentum for 2023 than in previous years. Unless inflation in Switzerland rises surprisingly sharply, mortgage interest rates are likely to rise only slightly. (SDA/kae)

Source :Blick