BCV Group delivered very good H1 results. Despite the impact of the Covid-19 pandemic and the continued negative-interest-rate environment, revenues were up 3% to CHF 493m, driven mainly by an increase in fee and commission income. Operating profit rose 13% year on year to CHF 203m on firm cost control. Net profit was up 10% to CHF 173m.
In response to the ongoing pandemic, BCV fulfilled its role by maintaining the measures put in place to protect its employees and customers, while continuing to provide a full range of banking services to the people and businesses of Vaud. In addition, BCV once again offered local SMEs the possibility to suspend two principal repayments on their loans.
Revenues up 3% to CHF 493m
Total revenues were up 3% year on year to CHF 493m. In the continued negative-interest-rate environment and with the Bank’s Trade Finance exposure still intentionally reduced, net interest income before loan impairment charges declined 2% to CHF 237m. Net interest income was down just 1% to CHF 227m on lower loan impairment charges. Fee and commission income increased 11% to CHF 173m, bolstered by a strong business trend in private and institutional wealth management. Trading income was once again solid, edging down 2% to CHF 72m. Other ordinary income rose 13% to CHF 21m.
Operating profit at CHF 203m
Operating expenses were steady at CHF 256m (+1%). Personnel costs increased 3% to CHF 178m, reflecting the insourcing of around 20 IT specialists from IBM. Other operating expenses declined 2% to CHF 78m. Depreciation and amortization was flat at CHF 37m. Operating profit was up 13% to CHF 203m.
Net profit up 10% to CHF 173m
The Bank recorded a tax expense of CHF 30m. Net profit was up 10% to CHF 173m. That corresponds to an ROE of 9.7% – one of the highest in BCV’s peer group.
Significant expansion in the balance sheet
Total assets increased 4%, or CHF 2.4bn, to CHF 55.6bn, driven by large cash inflows. Cash and cash equivalents, which are mainly held as SNB sight deposits, rose 1% to CHF 11.7bn. Mortgage lending expanded 2%, or CHF 642m, to CHF 28.7bn, in a very dynamic real-estate market. Other loans increased 5% to CHF 6.1bn, primarily driven by a gradual uptick in Trade Finance business volumes.
On the liabilities side, customer deposits grew 5%, or CHF 1.8bn, to CHF 37.2bn.
Net new money and increase in AuM
The Group's assets under management rose 7%, or CHF 7.1bn, to CHF 110.2bn. Net new money totaled CHF 3.1bn and came from individuals, SMEs, and institutional clients. The Bank’s investment performance drove AuM up by CHF 4.0bn.
Solid financial position
The Bank’s total capital ratio stood at 17.2% at 30 June 2021 and shareholders’ equity amounted to CHF 3.4bn, attesting to BCV’s financial solidity. Within the last 18 months, Standard & Poor's has once again reaffirmed its AA rating for BCV with a stable outlook, and Moody's has maintained its Aa2 rating, also with a stable outlook.
CHF 310m paid out to shareholders
In accordance with its dividend policy, BCV returned an ordinary dividend of CHF 3.60 per share to its shareholders in May, for a total payout of CHF 310m. This payout was unchanged from the prior year and represents a total dividend yield of 3.7% based on BCV’s 2020 year-end share price.
Fulfilling BCV’s mission as Vaud’s cantonal bank throughout the pandemic
In the first half of 2021, the Bank maintained the measures it had implemented to protect its customers and employees, while continuing to provide a full range of banking services to the people and businesses of Vaud. Remote working arrangements were kept in place for employees, and customers could visit BCV’s branches or use various remote banking channels to carry out their day-to-day transactions and speak with their advisors. The Bank also offered on-site vaccination for employees and their families.
To help support local SMEs, the Bank offered them the possibility to suspend the 31 March and 30 June principal repayments on their loans (including mortgage loans, overdraft facilities, and capital goods loans). A similar measure was taken in 2020 (see the press releases of 19 March 2020 and 3 February 2021).
Barring a significant deterioration in the financial markets and/or the overall economic situation, FY 2021 results are expected to be in line with those recorded in the first half.
Lausanne, Switzerland, 19 August 2021
17 February Full-year 2021 results
5 April Publication of the 2021 Annual Report (on www.bcv.ch)
5 May Annual Shareholders’ Meeting in Lausanne
18 August Half-year 2022 results
Banque Cantonale Vaudoise – Contacts
Daniel Herrera, Communications Director
Tel.: +41 21 212 28 61
Gregory Duong, Investor Relations
Tel.: +41 21 212 20 71
The above text is a translation of the original French document; only the French text is authoritative.