In the first half of 2025, Luzerner Kantonalbank (LUKB) achieved the highest half-year profit in its history, posting 150.7 million Swiss francs (+4.1 percent or 6 million francs). The state bank announced this on Friday.. 

All major revenue streams increased: net interest income rose by 10.1 percent to 231.7 million francs, commission and service income by 9.6 percent to 69.7 million francs, and trading income by 13 percent to 40.6 million francs. Total operating income grew by 8.7 percent to 347.4 million francs.

SNB's Zero-Interest Policy Has Consequences

LUKB CEO Daniel Salzmann sees this as evidence of the resilience of the business model: the bank can successfully navigate both volatile markets and low-interest environment. However, CFO Marcel Hurschler warned of declining interest margins as a result of the Swiss National Bank's current zero-interest-rate policy: «Thanks to very active interest rate and liquidity management, we were able to maintain net interest income at a very high level over the past quarters. However, due to the SNB's current zero-interest policy, our year-on-year advantage - as already signaled last autumn - will slightly decrease in the coming months.»

Cost-Income Ratio Declines

Customer loans increased by 1.6 percent to 44.1 billion francs, of which 38.8 billion were mortgage loans. Assets under management rose by 1.5 percent to 40.1 billion, supported by net new money of 464 million francs; the previous year it was 767.6 million francs.

Despite an 8.5 percent increase in costs to 161.7 million francs, the cost-income ratio declined from 46.1 auf 45.9 percent. 

For the full year, LUKB now expects a profit at the upper end of the previously communicated range of 265 to 285 million francs, thus slightly below last year's figure  (286.6 million francs).