Banque Cantonale Vaudoise (BCVN) H2 2023 earnings summary

Executive summary

• Record FY 2023 revenue of CHF 1.16bn, up 12% YoY; operating profit was CHF 541m and net profit CHF 469.2m, both up 21%.

• Business activity remained firm; AuM rose 4% to CHF 112.9bn, while total assets declined 1% to CHF 58.9bn.

Financial highlights

• Net interest income rose 28% to CHF 596.1m; net fee and commission income was CHF 339.1m, down 1%.

• Net trading income was CHF 190.1m, up 1%; other ordinary income fell 19% to CHF 34.6m, partly reflecting a 2022 real-estate disposal.

• Operating expenses rose 5% to CHF 540.8m; personnel costs increased 3% to CHF 364.1m and other operating expenses rose 8% to CHF 176.6m.

• Depreciation and amortization rose 9% to CHF 76m; other provisions and losses fell 69% to CHF 2m.

• Tax expense was CHF 74.2m, up 22% YoY; net extraordinary income was CHF 2m.

Outlook and guidance

• FY 2024 business activity is expected to track prior-year lines, barring significant changes in macroeconomic conditions or financial markets; results are expected below the FY 2023 record.

• Target cost/income ratio set at 55%–57%; target ROE is 10%–12% on current equity, or 14.7%–17.7% at the minimum CET1 threshold of 13%.

• Ordinary dividend target range raised to CHF 4.30–4.70 per share for 2023–2027, barring significant economic, regulatory or financial changes.