Neue Bank AG investments suppress profit
Neue Bank AG has increased its investments in the future of the bank. The restructuring of its departments has, however, adversely impacted profit. Nevertheless, the bank continues to post an above-average core capital ratio.
Neue Bank AG is investing in its future. As outlined in a press release, the bank has invested in digitalization during the first half of 2019. Moreover, its consultancy services for private customers and entrepreneurs in Liechtenstein and Switzerland have been expanded by the creation of the financial planning department. The process of setting up the Family Office has also now been completed and activities are underway here.
According to Neue Bank AG, the reconfiguration of the Supervisory Board and the reorganization of its departments were “highly intensive in terms of both work and costs”. For this reason, profit for the first half of the year was down 17.6 percent versus the prior-year period after deducting operational expenses, amortization and depreciation and taxes. Nevertheless, with a core capital ratio of 37.2 percent (Tier 1 ratio), the bank “remains a model of security and stability”. International standards dictate that a value of 7 percent is regarded as a benchmark for a healthy bank balance sheet.
Positive development was also recorded in terms of mortgage loans. Here, an increase of 8 percent in the first half-year was registered. Interest-rate related business suffered under the influence of negative interest rates in Swiss francs and euros, while the falling US dollar interest rate was an additional burden. In contrast, the trend in financial transactions was more favorable. Overall, Neue Bank AG generated operating income of 13.4 million francs. Moreover, equity investments in sustainable and socially responsible companies developed positively. In this investment spectrum, the bank’s customers enjoyed an increase in value of 24 percent over the course of 2019 alone.
Despite the continued challenging market environment, the executives of Neue Bank AG are looking ahead to the second half of the year with confidence in respect of business development.