Basler Kantonalbank (BSKP) H1 2024 earnings summary

Executive summary

• Net profit for the first half of 2024 reached CHF 80.3 million, up 6.3% year-over-year, despite a challenging environment with reduced interest margins.

• Stable balance sheet growth and a strong commission business offset lower interest income, while investments in digitalization and infrastructure continued.

• Client loans increased by 1.6% and client deposits by 1.4%, with total assets rising 2.2% to CHF 53.9 billion.

• The group maintained high capital strength, with a total capital ratio of 18.1% and top credit ratings from Fitch (AAA) and S&P (AA+).

Financial highlights

• Operating income fell 4.1% year-over-year to CHF 323.3 million, mainly due to a 2.8% drop in gross interest income and an 18.7% decline in trading income.

• Commission and service income rose 1.1% to CHF 68.3 million, while operating expenses increased 7.5% to CHF 179.5 million due to investments and higher payroll costs.

• Cost/income ratio increased to 55.2% from 49.6% a year earlier, aligning with the strategic target.

• Return on equity was 5.7%, down from 7.0% year-over-year.

• Reserves for general banking risks increased by CHF 45.7 million to CHF 3.0 billion.

Outlook and guidance

• The current strategy will be pursued, focusing on digital onboarding, cloud transformation, and instant payment projects.

• A slight increase in earnings is expected in the second half of 2024, depending on interest rate trends.

• Management expresses confidence in achieving a good to very good result for the full year 2024.