In the wake of an excellent half-year result, Banque WIR is satisfied with a …

WIR bank

A document

On the back of an excellent half-year result, Banque WIR is pleased with solid growth

In a difficult environment, Banque WIR significantly increased its profit to CHF 16.7 million in the first half of 2022. This was driven by both operating activities and exceptional revenues. The significant growth in mortgage loans and the good performance of interest operations contributed in particular to this solid operating result. The balance sheet total broke a new record at almost 6 billion francs.

Basel, July 29, 2022 | Banque WIR records a satisfactory first half of 2022: with a half-year profit of 16.7 million francs, the result for the same period of the previous year (11 million francs) was significantly exceeded. “We are registering a very satisfactory result despite a particularly difficult macroeconomic and geopolitical context”, summarizes the CEO Bruno Stiegler, referring to the first six months of the year, to the war in Ukraine, to the consequent inflation due to the rise in the prices of raw materials and energy as well as rising key interest rates. “As a purely Swiss cooperative bank, we manage to bridge the gap between pragmatic conservatism on the one hand and targeted and measurable risk-taking on the other.”

The growth in mortgages, in particular, is remarkable: the 4.4 billion CHF / CHW recorded in the balance sheet correspond to an increase of 4.3% in the first half of 2022. “This growth is a sign that Banca WIR is perceived as a customer – both for financing in Swiss francs and in the complementary currency WIR – as an attractive and competitive construction financing bank, ”said Stiegler. The CEO adds that this loan growth was achieved despite a prudent funding policy. “We also pursue a scrupulous and forward-looking policy on provisions and value adjustments”.

While the evolution of customer deposits (4.3 billion francs) remained stable in the first half of the year, the balance sheet total reached a new all-time high of 5.99 billion francs (+ 0.3%). The capital base of WIR Bank still significantly exceeds the regulatory requirements: measured on the basis of the capital requirements set out in the Basel III Accords, the BIS ratio stood at 15.4% at 30 June (regulatory target value: 11.2%) and the leverage ratio of 8.9% (regulatory target value: 3%). The bank’s core capital (CET1) was significantly strengthened following a change in tax practice. “In other words, Banque WIR is very healthy and extremely solid,” sums up CFO Mathias Thurneysen.

This financial stability is also reflected in the confidence of credit institutions: despite the volatility of the markets, the common share price (437 francs) has been more or less maintained since the beginning of the year. At the end of May the shareholders’ meeting also approved, on the basis of the solid result of the previous year, the payment of a dividend up by almost 5% (yield: 2.4%). “We will continue to do everything in our power to ensure that investors are happy with their investment,” said Bruno Stiegler. The cooperators also approved an amendment to the statutes which at the same time modernizes, simplifies and opens up the structure of members and that of the capital of Banca WIR. All customers now have the opportunity to become Banque WIR collaborators. “This measure gives us additional flexibility and should come into effect by the end of 2023,” explains Bruno Stiegler.

The operating result is based on sound interest management: the gross interest income was able to increase by 1.1 million to 34.6 million francs (+ 3.4%). Despite the nervousness on the interest side, the margin was maintained and revenues increased. In mid-June, the day after the Swiss National Bank (SNB) raised interest rates, WIR Bank was the first nationally operating financial institution to completely abolish negative interest rates. “We have thus given a favorable signal for SMEs”, explains Bruno Stiegler. Fee revenues with the WIR complementary currency could be practically maintained, this after SMEs had paid a minor contribution to the network on the additional WIR turnover in the comparable period of the previous year in the context of the COVID-19 crisis. “This substantial amount of several million directly benefited Swiss SMEs,” Stiegler recalls.

The upheavals on the financial markets are affecting the result of trading operations: after a profit of 9.8 million francs in the same period of the previous year, a valuation loss of almost 16.5 million francs follows in mid-2022, which however, it could be offset by a release of reserves for general banking risks. “Traditionally, Banque WIR deliberately invests part of its capital in securities, which are broadly diversified in all respects,” explains Mathias Thurneysen. “We focus on premium Swiss values”.

In addition to the rigorous cost control of operating expenses, value adjustments and depreciation of tangible and intangible assets fell sharply by 1.7 million francs, thanks to the fact that major projects were fully amortized. “Of course, we continue to invest in the themes of innovation and diversification”, explains Bruno Stiegler, which also translates into a slight increase in expenses for goods and services. WIR Bank generated exceptional income in the first half of the year thanks to the sale of two properties, which also led to a significantly higher tax burden.

The best example of WIR Bank’s diversification is the first fully digital securities pension solution launched in 2017: VIAC currently has around 70,000 customers, with an 11% year-to-date growth. Assets under management amounted to 1.9 billion francs (+ 7.3%). “Our diversification into fintechs has a lasting effect on earnings,” says Mathias Thurneysen.

For the second half of 2022, Banque WIR expects a solid result despite persistent uncertainties.

Banque WIR
Volker Strohm
Responsable Corporate Communication | Porte-parole
 medien@wir.ch
T 061 277 92 27

Leave a Comment