Lucerne Cantonal Bank (LUKB) reported a consolidated profit of 144,7 million francs for the first half of 2024. According to figures presented on Friday, this represents an increase of 16,8 million francs, or 13,1 percent, compared to the same period last year. Operating profit rose by 6,7 percent to 156,3 million francs.

LUKB confirmed the increased full-year 2024 target for consolidated profit of between 270 and 285 million francs, which was raised in June. «Our strategy to broaden our revenue structure is bearing fruit,» said LUKB CEO Daniel Salzmann.

More advisory services lead to higher inflows

The bank benefited, among other things, from the sale of the real estate share of Fundamenta Group Holding. This generated an extraordinary pre-tax profit of 32,1 million francs, of which 25 million francs were allocated to reserves for general banking risks.

In the commission and services business, LUKB achieved a total of 63,7 million francs, exceeding the previous year's figure by 8,2 percent. The bank identified an increased need among clients for support and advice in investment management. In the first half of this year, LUKB recorded a total of 623 new mandate agreements. This led to an inflow of 819 million francs in mandate-based client assets.

The assets under management totaled 38,5 billion Swiss francs (+2,3 percent compared to the end of 2023). Net new money inflows amounted to 300 million francs in the first half of the year.

Interest business calculations pay off

In contrast to other institutions, LUKB's interest business continues to perform well. Compared to the first half of 2023, the bank increased its gross income by 9,8 million francs to 217,6 million  francs (+4,7 percent), and net income by 5,2 million francs (+2,5 percent) to 210,6 million francs. According to CFO Marcel Hurschler, this is partly due to active balance sheet management: «The treasury result contributes significantly to the strong interest income. Our loan portfolio is in excellent health. Therefore, we have recorded very low impairments for years, which has also had a sustained positive impact on our interest business.»

Trading income below last year's value

In trading, the bank could not match last year's result (-2,1 percent). However, with 36,0 million francs, it still ranks as the second-best semester result.

Operating expenses increased (+7,1 percent). This was partly due to an expansion of staff by 62,8 full-time equivalents to a total of 11'633 full-time positions. However, the cost-income ratio, at 45,6 percent, remains below the strategic target of a maximum of 50 percent.

High demand for corporate loans

Customer loans amounted to a total of 42,5 billion francs (+1,9 percent). Of this, 36,8 billion francs were mortgage claims, representing modest growth of 0,6 percent. According to the bank, the first semester saw «very strong demand» for corporate loans. Overall, LUKB also recorded an increase of 559,7 million francs (+10,9 percent) in the «claims on customers» category, thanks to higher Lombard loans, bringing the total to 5,7 billion francs.