The Lucerne Cantonal Bank (LUKB) has reported strong financial performance in the first three quarters of 2024, with a net income of 216 million francs, representing a 9.1 percent increase compared to the same period last year.
This growth is attributed to increased loan demand and a solid trading business, despite recent interest rate cuts. LUKB's CEO, Daniel Salzmann, emphasized the effectiveness of active interest management in mitigating the impact of these cuts, demonstrating the bank's strategic agility.
The sale of the real estate division of the Fundamenta Group contributed significantly to LUKB's financial success, generating an extraordinary income of 32.3 million francs. Operating profit also saw a commendable rise of 5.0 percent, reaching 237.1 million francs, while total revenue increased by 5.7 percent to 483.5 million francs.
The demand for corporate loans has increased, with customer loans totaling 42.98 billion francs by the end of September, a 3.0 percent increase. Mortgage loans, which make up the majority of this figure, rose by 2.4 percent to 37.47 billion francs.
LUKB reported an 8.5 percent increase in income in the commission and services business, amounting to 95.8 million francs. However, trading income fell by 8.5 percent to 45.3 million francs.
Looking ahead, LUKB is optimistic about meeting its annual targets, with group profit expected to fall within the guidance range of 270 to 285 million francs. The bank is confident due to a strong performance in customer assets, which reached 39.47 billion francs at the end of the quarter, a 4.7 percent increase from the end of 2023.
LUKB has set ambitious goals for 2025, aiming to grow net new money in its mandated asset management business by over 1 billion francs and targeting non-interest income of at least 215 million francs. The bank also projects credit growth between 2.00 percent and 3.75 percent.
Despite the positive financial indicators, LUKB has faced rising costs associated with its planned increase in personnel. The number of full-time positions increased by 45.6, bringing the total to 1,180.5 for the year. This expansion is part of the bank's strategy to enhance its service offerings and operational capabilities, although it has contributed to an overall increase in expenses, which rose by 7.9 percent to 227.8 million francs.
The cost-income ratio remains favorable at 46.1 percent, below the bank's target of a maximum of 50 percent.
As LUKB continues to navigate the financial landscape, its focus on strategic growth, customer service enhancement, and prudent financial management positions it well for future success. The bank's ability to adapt to changing market conditions while pursuing ambitious goals will be critical as it seeks to maintain its competitive edge in the evolving banking sector.