VP Bank (VPBN) H1 2024 earnings summary

Executive summary

• Net income for H1 2024 was CHF 11.5 million, down 54.8%–55% year-over-year due to lower net interest income and higher interest expenses amid a challenging market environment.

• Client assets under management rose 8.8%–9% to CHF 50.4 billion, with net new money inflow of CHF 0.5 billion and total business volume at CHF 56.2 billion.

• Comprehensive efficiency measures are underway, targeting CHF 20 million in cost savings by 2026, including workforce reductions and organizational simplification.

• The Hong Kong office will close, consolidating Asia operations in Singapore to improve profitability.

• Ongoing strong capitalisation with a Tier 1 ratio of 26.1% and liquidity coverage ratio of 309.5%–310%.

Financial highlights

• Operating income fell 13.6%–14% year-over-year to CHF 162.6 million, mainly due to a 27%–27.1% drop in net interest income.

• Operating expenses decreased 6% year-over-year to CHF 148.8 million, reflecting lower personnel and depreciation costs.

• Client assets under management increased to CHF 50.4 billion; credit/loan volume up 5.2% to CHF 5.8 billion.

• Cost/income ratio rose to 91.5% from 84.0% a year earlier.

• Group net income per share A was CHF 1.86, down from CHF 4.15 in H1 2023.

Outlook and guidance

• Efficiency measures and cost optimisation initiatives planned for H2 2024, with restructuring costs of CHF 10–12 million expected.

• Focus on scalable and profitable growth, leveraging intermediary business and expanding in core markets.

• Still challenging interest environment and market conditions expected in the second half of 2024.