After an above-average year in 2023, 2024 could have been another top year for Hypothekarbank Lenzburg.

In the 2024 financial year, the Aargau regional bank increased its revenues in the interest and investment business as well as in the areas of banking-as-a-service and finstar services.

However, costs have also risen. As part of the ongoing realignment, personnel and material costs have also increased. According to the figures published on Friday, the bottom line is therefore a lower profit: it fell by 3.3 percent to 20.5 million Swiss francs compared to the previous year.

Interest Business Remains Central

The interest business is still the bank's most important business area, with net income of 81.6 million francs. The majority of revenues come from the mortgage business.

At 16.3 million francs, the new Banking-as-a-Service and Finstar businesses generated a higher gross result for the first time than the investment business with commission income of 13.3 million francs. However, if the costs are deducted, the investment business remains the bank's second-largest source of income.

Customer Money Inflows Continue

In line with the previous year, the inflow of customer deposits increased by 235 million francs to a total of 5.5 billion francs. There was also a pleasing development in medium-term notes. Thanks to these inflows, Hypothekarbank Lenzburg's total assets exceeded 7 billion francs for the first time in the 2024 financial year. «The inflows are a sign of confidence in Hypothekarbank Lenzburg's strong brand. Hypi is a real love brand and has a strong image even outside the Lenzburg region,» says CEO Silvan Hilfiker, who took over as CEO from Marianne Wildi in June last year.

Strong Growth in Assets Udner Management

In the investment business, which is recognised in the income from commission and service fee business, revenues also increased by 26.0 percent compared to the previous year.

Assets under management rose by 30.3 percent to 3.0 billion francs compared to the previous year. The bank attributes this to the positive market development, the sales performance, the good performance of the various investment solutions and the cooperation agreements.

Solid Capital Base

Hypothekarbank Lenzburg's capital base was further strengthened last year. On one hand, this was achieved through provisions amounting to 5 million francs, and on the other, through an allocation of 12 million francs to profit reserves. The equity ratio stands at approximately 17 percent (compared to the legal requirement of 12.4 percent). The liquidity coverage ratio (LCR) averaged over 200 percent in 2024, significantly exceeding the legal minimum of 100 percent.

Above-Average Growth in New Business Areas

The regional bank also sees the development of the Finstar and Banking-as-a-Service business as a success. Here, it recorded an increase of 68 percent to 16.3 million francs. The encouraging business development of various Fintech partner companies and Finstar banks has had a positive impact. «This development is a clear sign for us that we want to continue implementing our cooperation strategy and need to invest in this area,» says Gerhard Hanhart, Chairman of the Board of Directors of the bank.

After deducting expenses, other ordinary income amounted to 12.0 million francs, which corresponds to an increase of 49.0 percent compared to the previous year.

Authorized Capital Increase Proposed

The Board of Directors is proposing an authorized capital increase for the Annual General Meeting on March 15, 2025. This authorization would allow the Bank’s Board of Directors to adjust the capital as needed over the next five years under a so-called capital band. This will require an amendment to the Articles of Association, which will be voted on at the meeting.

The Board of Directors wants to gain more leeway in the transformation of the bank, particularly in the development of new business areas such as embedded finance and banking-as-a-service.

New Chair Proposed

At the upcoming Annual General Meeting, Marianne Wildi, former CEO of HypoVereinsbank and current member of the Board of Directors, will be proposed as Chair of the Board of Directors.

Gerhard Hanhart will not be standing for re-election to the Board of Directors. He has been a member of the Bank's Board of Directors since 1997 and Chairman of the Board of Directors since 2015.

Susanne Ziegler is also not standing for re-election due to a career change. Felix Muff will take her place.

The dvidend will remian unchanged at 120 francs per share..