Zürcher Kantonalbank (ZKB)’s 2024 profits fell slightly, yet the canton and municipalities will benefit from increased distributions.
In a somewhat anticlimactic turn of events, Zürcher Kantonalbank (ZKB) reported a modest decline in profits for the year 2024, falling just short of the previous year’s record-breaking figures. Nevertheless, the cantonal authorities and municipalities can still anticipate a more generous distribution of funds.
The bank disclosed that its net profit dipped by 9.5 percent, settling at 1.12 billion Swiss francs. Operating profit, a critical indicator of operational efficacy, experienced a more pronounced decline of 13.1 percent, amounting to 1.28 billion Swiss francs. Despite this downturn, ZKB managed to secure the second-best operating result in its storied history—a testament to its resilience amidst challenging market conditions.
A notable contributor to this decline was the central interest rate business, which faced a significant contraction, primarily attributed to the decrease in key interest rates. Here, net income plummeted by 7.7 percent to 1.68 billion francs. Additionally, the trading segment, although relatively minor, also suffered a substantial drop of 15.1 percent, resulting in earnings of 353 million francs. The bank attributed this downturn to a lackluster market dynamic compared to the previous year.
Conversely, Zürcher Kantonalbank (ZKB) demonstrated robust growth in its commissions and services sector, with profits surging by 8.9 percent to 1.02 billion francs. This growth, albeit a silver lining, could not fully offset the overall decline, leading to a 3.3 percent reduction in total operating income, which now stands at 3.09 billion francs.
On a more positive note, the bank’s mortgage portfolio saw a commendable increase of 5.7 percent, culminating in a total of 106.6 billion francs by year-end. Furthermore, customer deposits swelled by a net addition of 29.8 billion francs. As a result, the canton of Zurich and its municipalities can look forward to a heightened profit distribution of 562 million francs—surpassing last year’s record distribution of 558 million francs, much to the delight of local authorities.
While Zürcher Kantonalbank (ZKB)’s profit margins may have taken a hit, the bank’s strategic growth in certain sectors and its commitment to community support through profit distribution remain commendable.
