Raiffeisen increases profits thanks to strong interest business – News

Raiffeisen as Switzerland’s new number two has earned well. The core business with mortgages in particular declined.

Step by step, the National Bank raised interest rates in order to combat inflation. The result: Practically all banks benefited. Also Raiffeisen. Raiffeisen boss Heinz Huber is pleased about the growth and confirms that the interest business played a significant part in it. At 1.39 billion francs, group profit was 18 percent above the previous year’s result.

Profits bubble up because the banks do not immediately pass on all the advantages to their customers when interest rates are higher. They keep a significant portion of the additional income, for example from mortgage loans, for themselves. Only gradually do they pay more interest on their savings accounts.

There are already signs of a turnaround in interest rates

The only question is how long the windfall will last. The tide has already turned, says Huber. The National Bank’s interest rates would probably fall again this year. The margin in the lending business is already coming under slight pressure again. This trend is expected to continue in the current year. The Raiffeisen boss still doesn’t have to worry about profits.

The desire to own a home is great and remains a general dream despite increased interest rates.

Last year, the cooperatively organized Raiffeisen Group increased its market share in the mortgage business to an impressive 18 percent, which generates solid earnings. The demand for loans for home ownership remains unbroken, says Huber: Home ownership remains a general dream of the Swiss population despite increased interest rates.

However, the bank will now have to pass on more interest rate advantages to customers, meaning they will have to pay more. Huber emphasizes that there is competition in the Swiss banking market, particularly with regard to customer deposits. Attractive conditions are necessary here.

Customers are demanding their share of the cake and Raiffeisen has to react so that people don’t take their money to another bank. The competition seems to be working. Even if with the demise of Credit Suisse, not only UBS, but also Raiffeisen gained market power as the new number two.