Switzerland’s second-largest banking group posted a profit of 555 million francs in the first six months of this year. According to figures published on Wednesday, this is significantly lower than in the previous year (– 87 million francs or –13,6 percent), but in line with analysts’ expectations.

The main drag came from interest income. Net interest income fell by 107 million francs, or 7,5 percent, to 1,3 billion francs. This is a direct consequence of the Swiss National Bank’s interest rate cuts.

Pension Business Booming

Raiffeisen, however, expanded in its non-interest business. Income from commissions and services rose by 9,1 percent to 366 million francs, while trading income increased by 8,5 percent.

The pension and investment business developed particularly dynamically: net new money of 2,1 billion francs flowed into securities accounts, whose number increased by 30'000—50 percent more than in the previous year (see separate report). Securities account volumes climbed to 55,3 billion francs, driven by discretionary mandates (+17 percent) as well as increases in pension and fund savings plan accounts.

Raiffeisen also grew in traditional lending. Customer loans rose by 6 billion francs to 239 billion francs, of which 40 percent went to corporate clients. At the same time, customer deposits increased sharply by 5,5 billion francs to 220 billion francs. The risk situation remains stable: value adjustments accounted for only 0,137 percent of receivables.

Overall, securities account volumes increased by 3,4 billion francs to 55,3 billion francs due to inflows and positive market performance. The main growth drivers of assets under management were discretionary mandates (+17 percent in both number and volume), as well as increases in pension accounts (+8,3 percent) and fund savings plan accounts (+7,2 percent).

Mortgage Market: Raiffeisen Strengthens Position

Mortgage receivables rose by 5,5 billion francs in the first half to 226 billion francs (+2,5 percent). This enabled Raiffeisen to strengthen its market position, expanding its market share to 18,3 percent.

On the cost side, personnel and operating expenses increased by around 4 percent, pushing the cost-income ratio up to 59,2 percent. Capitalization, however, remains strong: with a TLAC ratio of 27,6 percent and a leverage ratio of 8,6 percent, Raiffeisen continues to be excellently capitalized.

Cautious Outlook for the Second Half

For the full year, the Group expects a slightly better net interest result in the second half and higher commission income compared to the previous year. However, the final result is likely to remain below last year’s level.