VP Bank, which issued a profit warning in May, released its half-year results on Tuesday. The bank reported a profit of 11.5 million Swiss francs, marking a significant 54.8 percent decline from the previous year.

Under the continued leadership of interim CEO Urs Monstein, the Liechtenstein-based bank is on a cost-cutting path, evident from a 6 percent reduction in operating expenses to 148.8 million Swiss francs. The bank has announced additional «efficiency measures», including the closure of its Hong Kong branch and the discontinuation of «services that were not successfully positioned in the market». Notably, this includes its private market investment offerings, an area generally viewed as a growth segment.

Job Cuts Expected

VP Bank aims to save at least 20 million Swiss francs by the end of 2026, which will involve staff reductions, with some positions facing potential layoffs. The bank currently employs around 1,000 staff members.

Despite the challenges, the half-year results include some positive figures. The bank reported a net new money inflow of 0.5 billion Swiss francs, an 8.8 percent increase in client assets to 50.4 billion Swiss francs, and a 5.2 percent rise in loan volume to 5.8 billion Swiss francs since the end of 2023.

Declining Interest Income

The decline in operating income by 13.6 percent to 162.6 million Swiss francs is attributed to a drop in interest income, as clients shifted their deposits into higher-yielding term deposits and securities.

For the second half of 2024, VP Bank anticipates restructuring costs of 10 to 12 million Swiss francs related to its «efficiency and growth acceleration measures».

More to follow...