High level of stability, gratifying inflow of new funds

NEUE BANK AG achieved an inflow of new funds in the amount of CHF 281.8 million in 2020. Client assets under management increased to CHF 5 804.8 million. The Board of Directors will propose to the General Meeting to adopt a dividend of 16% on the share capital.

“Fiscal 2020 was marked by the global Covid-19 pandemic with very volatile markets in March and April, along with further intensification of the negative interest rate environment that has persisted for years, due to the cuts in US dollar interest rates. These developments are also reflected in NEUE BANK AG’s annual result,” says Prof. Dr. Manuel Ammann, Chairman of the Board of Directors of NEUE BANK AG. “Despite these factors, our result is solid.” The net annual profit reached CHF 7.3 million. This figure includes the donation in the amount of CHF 0.5 million to public-benefit organisations in the year under review, with the aim of supporting organisations especially impacted by the coronavirus crisis. Despite the difficult environment, NEUE BANK AG achieved a solid gross operating profit of CHF 9.6 million, which – excluding the donation – even slightly exceeded expectations.

Adjustments on the Board of Directors
Chairman Karlheinz Ospelt and Vice Chairman Josef Quaderer left the Board of Directors in the autumn. Additionally, Alexander Jeeves announced his resignation from the Board of Directors in spring 2020. A new Chairman of the Board of Directors was found in Prof. Dr. Manuel Ammann, who has profound knowledge of the banking business and already helped shape the development of the bank as a member of the Board of Directors from 2008 to 2017. Marc-André Sola, a lawyer, also made himself available for appointment to the Board of Directors. Dr. Ernst Walch, who had already served on the Board of Directors of NEUE BANK AG since 2017, was appointed Vice Chairman.

Increase in operating income
Commission and fee income in the amount of CHF 16.2 million and income from financial transactions in the amount of CHF 6.7 million developed extremely positively, increasing by 11.8 % and 10.1 % respectively in comparison with the previous year, in particular due to active client behaviour at the beginning of the pandemic. Conversely, net interest income (incl. income from securities) dropped significantly by 18.1 % to CHF 5.5 million. Overall, operating income in the amount of CHF 28.6 million nevertheless increased by 4.7 % over the previous year. On the cost side, business expenses increased by 14.0 % over the previous year to CHF 19.0 million. Taking into account the donation in the amount of CHF 0.5 million, the cost/income ratio of 64.7 % would be below the budget target.

The new inflow of net new funds in the amount of CHF 281.8 million developed positively in the reporting year. This is not fully reflected in the overall development of client assets under management due to the massive price slump on the markets caused by the outbreak of Covid-19 in spring 2020 and the sharp decline in the US dollar exchange rate over the course of the year. The total portfolio of client assets under management increased by 2.4 % to CHF 5 804.8 million.

Surpassingly high level of security
Based on the result for fiscal 2020, the Board of Directors proposes to the General Meeting to be convened on 23 April 2021 to adopt a dividend of 16 %. CHF 1.0 million will be allocated to other reserves. Subject to the approval of the General Meeting, NEUE BANK AG’s own funds will thus amount to CHF 140.1 million, with a Tier 1 ratio of 37.5 % as at the end of 2020. The bank thus has a solid capital base that is above average, providing its clients with a high level of security and stability.

Outlook
“Over the past years, the range of services offered by NEUE BANK AG has been steadily expanded. In addition to an increase in personnel, additional investments
in IT are planned for 2021, which will contribute both to increasing efficiency and to strengthening the bank’s digital presence,” says Pietro Leone, CEO of NEUE BANK AG. Even through the situation on the financial markets, driven by strong growth in money supply and low interest rates, now appears to have eased, corrections like last year’s cannot be ruled out in light of strongly increased valuations. This means it will be all the more important to abide by the principles of diversification. Despite these uncertainty factors and the ongoing Covid-19 pandemic, NEUE BANK AG will make every effort to achieve the goals it has set for itself.