Neue Bank reports solid business performance

Neue Bank is continuing on its growth path, achieving net new money of CHF 97.8 million and increasing profit by 21.8% to CHF 4.6 million, despite the challenging situation in the first six months of the year.

The massive impact of the war in Ukraine on the global economy and financial markets led to an extremely unstable and turbulent market environment in the first half of 2022. This special situation posed major challenges for the entire banking industry. Despite net new money of CHF 97.8 million, the value of Neue Bank’s assets under management decreased from CHF 6.5 billion at the end of 2021 to CHF 6.0 billion due to the strong corrections on the financial markets.

Positive development of operating income

In the income statement, the first interest rate hikes implemented by several central banks to combat inflation resulted in an increase in net interest income (incl. income from securities) by 19.1% to CHF 2.7 million over the same period of the previous year. Even though clients showed considerable restraint in their trading and investment activities due to the prevailing uncertainty worldwide, commission and fee income stayed nearly constant, declining by 1.0% to CHF 9.0 million. Income from financial operations, on the other hand, reflected the significant corrections on the global equity markets, falling to CHF 2.2 million due to valuation adjustments on the bank’s own securities holdings.

Overall, operating income increased by 11.3% to CHF 15.8 million over the same period of the previous year, thanks in part to a one-off gain from a trading transaction. Gross operating profit for the first half of 2022 increased by 22.9% to CHF 5.7 million, despite a rise in operating expenses by 5.7% to CHF 10.2 million due to strategy implementation. Nevertheless, operating expenses remained below target.

High level of security and stability

With a Tier 1 ratio of 30.9%, Neue Bank not only clearly exceeds the regulatory requirements, but is also one of the best-capitalised banks in the industry. This means that Neue Bank clients benefit from a capital base that offers a very high level of security and stability in times marked by great uncertainty.

Outlook

Economic development in the coming months will continue to be impacted by the war in Ukraine, additional interest rate hikes by central banks in the fight against inflation combined with fears of recession, and the spectre of an energy crisis. In this challenging environment, it is hardly possible to provide a reliable assessment of further business development. Neue Bank is well prepared for the challenges ahead and is entering the second half of the year from a position of strength. It will do everything it can to implement its planned forward-looking projects, especially in the area of digitalisation, with the goal of achieving an even greater focus on the needs of its clients.