Thanks to a good market environment and strict cost discipline, Zürcher Kantonalbank achieved a record consolidated profit of CHF 942 million in 2021. The strong result will also benefit the canton of Zurich and its municipalities through a higher dividend.
Martin Scholl, CEO of Zürcher Kantonalbank, looks back on a successful financial year.
The year 2022 is a turning point for the Zurich Central Bank (ZKB). After a period of 15 years, which is almost unimaginable for bank bosses, Martin Scholl will resign as CEO of the financial house at the end of August. The last full financial year, for which Scholl was operationally responsible, can be regarded as a success. The year’s success is not only due to clever management, but above all to a booming stock market.
The state bank was able to continue the high profit momentum of the first half of the year at a similar pace in the second half of the year. Accordingly, the record-high half-year result also resulted in the highest annual profit in the company’s history. At CHF 942 million, this is almost 9 percent above the previous year’s figure. The canton of Zurich and its municipalities should also benefit from this, with a dividend increased by 21 percent to CHF 431 million.
According to the company, the strong growth in income from the commission and service business as well as the consistency in the interest business, which despite a broadly diversified business model is still the bank’s most important source of income, contributed to the record result. The trading business, which was exceptionally strong in the previous year due to the market turmoil caused by Corona, was not quite able to keep up with the high pace of these two segments.
In the commission and service business, success increased the most with a plus of 14.8 percent. In particular, income from fund business, asset management and advisory fees developed very dynamically. Assets under management rose by 13 percent to CHF 409.2 billion. The main driver was a record high net new money inflow of CHF 25.9 billion, 40 percent of which came from private and 60 percent from institutional clients.
In the highly competitive interest business, with the mortgage business as the most important source of income, gross interest income increased by CHF 30 million to CHF 1,287 million. The mortgage portfolio rose by almost 5 percent net to CHF 91.8 billion. The main drivers here were the persistently low level of interest rates and the associated attractiveness of real estate as an investment. ZKB emphasizes that the quality standards in mortgage lending have been maintained despite strong volume growth.