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Tag: Raiffeisen

  • Raiffeisen Unveils Exciting Strategy Extension: A New Chapter for Growth!

    Raiffeisen Unveils Exciting Strategy Extension: A New Chapter for Growth!

    Raiffeisen Delays New Strategy: Aiming for Cohesion at the Top

    Raiffeisen has announced a significant shift in its strategic planning timeline, opting to unveil a new group strategy at the end of 2026 instead of the previously anticipated date. This one-year delay is a strategic move to ensure that both the incoming chair of the board and the newly appointed CEO, Gabriel Brenna, have a hand in shaping the bank’s future direction, as the institution stated in a recent release.

    The new board chair is set to be elected during the general meeting scheduled for June 2026. Current chair Thomas Müller has confirmed he will not seek re-election, leaving the board in search of a successor—a process that is still actively underway. In a game of musical chairs, the position has become particularly crucial, with the leadership baton passing hands in a race against time.

    Turning the page, Brenna will officially step into the CEO role in December 2025, succeeding Heinz Huber, who announced his resignation in December 2024. By synchronizing these changes, Raiffeisen seems keen on building a cohesive leadership team—one that can navigate the complex landscape of the banking sector, perhaps hoping to avoid any hiccups that could lead to strategic misalignment. After all, in the world of retail banking, an indecisive leader can be like an empty shopping cart: lacking direction and prone to drift.

    Questions & Answers

    Why has Raiffeisen decided to delay its new group strategy?
    Raiffeisen has postponed its strategy rollout to ensure that both the new CEO and the incoming chair of the board can participate in the development process, fostering a more cohesive leadership vision.

    When will the search for a new board chair be resolved?
    The election for the new chair is set for June 2026, with the current chair, Thomas Müller, opting not to seek re-election.

    What changes are expected with the new CEO Gabriel Brenna?
    Gabriel Brenna is set to take over in December 2025, succeeding Heinz Huber, marking a pivotal moment in Raiffeisen’s leadership and strategic direction as he shapes the future of the bank.

  • Raiffeisen Expands Amid Rising Interest Pressures: A Balancing Act for Growth and Stability

    Raiffeisen Expands Amid Rising Interest Pressures: A Balancing Act for Growth and Stability

    The Raiffeisen Group’s Growth Amid Interest Income Challenges

    In the first half of 2025, Raiffeisen Group, Switzerland’s second-largest banking institution, demonstrated resilience by continuing its growth trajectory, despite a notable decline in net interest income. The bank reported profits of 555 million francs in the first six months, a sharp drop of 87 million francs or 13.6 percent compared to the same period last year. While still meeting analyst expectations, the decrease raises eyebrows in an economic landscape marked by shifting interest rates.

    The primary factor behind this downturn lies in the drop in interest income, which fell by 107 million francs or 7.5 percent to 1.3 billion francs. This decline is largely attributed to the Swiss National Bank’s recent interest rate cuts, a decision that has sent ripples through the financial sector.

    Strength in Non-Interest Revenue Streams

    Despite the challenges in interest income, Raiffeisen saw success in its non-interest business segments. Income from commissions and service fees grew by 9.1 percent to reach 366 million francs, while trading income experienced an impressive 8.5 percent increase. The pension and investment sectors particularly thrived, with net new assets flowing into securities accounts totaling 2.1 billion francs, leading to an astonishing 30,000 new accounts. This surge marks a remarkable 50 percent growth year-on-year. Overall, the volume in securities accounts now stands at 55.3 billion francs, buoyed by discretionary mandates, which soared by 17 percent, alongside gains in pension and fund savings plans.

    Raiffeisen also demonstrated solid performance in traditional lending, reporting a rise in customer loans by 6 billion francs to a total of 239 billion francs, of which 40 percent benefitted corporate clients. Their customer deposits also saw a significant uptick, increasing by 5.5 billion francs to reach 220 billion francs. Notably, the risk environment remains stable, with value adjustments constituting just 0.137 percent of receivables.

    Mortgage Market Gains

    The bank’s mortgage receivables expanded by 5.5 billion francs, bringing the total to 226 billion francs, a growth of 2.5 percent. This development allowed Raiffeisen to bolster its market position, increasing its share to 18.3 percent. However, not all news is rosy; personnel and operating costs rose around 4 percent, resulting in a cost-income ratio of 59.2 percent. On a positive note, the bank’s capitalization remains robust, with a TLAC ratio of 27.6 percent and a leverage ratio of 8.6 percent, solidifying its strong financial standing.

    A Pessimistic Look Ahead

    Looking to the remainder of the year, the Group anticipates a modest improvement in net interest income during the second half, alongside augmented commission income compared to last year. Nevertheless, expectations remain tempered, as the final results are expected to fall short of last year’s performance.

    Questions & Answers

    How did net interest income impact Raiffeisen’s overall profit?
    The decline in net interest income by 7.5 percent contributed significantly to the drop in Raiffeisen’s profits, which fell by 13.6 percent compared to last year.

    What areas of Raiffeisen’s business showed growth despite the interest income decline?
    Raiffeisen reported growth in its non-interest business areas, particularly in commissions and services, which rose by 9.1 percent, and trading income, which increased by 8.5 percent.

    What is Raiffeisen’s forecast for the second half of 2025?
    The Group expects a slight recovery in net interest income and higher commission income, although overall results are anticipated to remain below those of the previous year.

  • Raiffeisen Reports: Immigration Key to Sustaining GDP Growth Momentum

    Raiffeisen Reports: Immigration Key to Sustaining GDP Growth Momentum

    Swiss Economy’s Growth Weighed Down by Global Concerns

    The Swiss economy’s growth appears to be buoyed more by immigration trends than by domestic productivity, according to Raiffeisen’s latest semi-annual economic forecast. The report highlights that challenges in the global economy, particularly from the U.S. and EU, are casting a shadow over Switzerland’s economic outlook.

    As trade relations with the U.S.—Switzerland’s second-largest trading partner—remain precarious, Raiffeisen’s economists caution that the impact of potential tariffs looms large. Negotiations have been sluggish, with possible tariffs on the Swiss pharmaceutical industry still on the table. “The market underestimates that Trump is focused on increasing tariff revenues, not on reciprocal tariffs,” warned Chief Economist Fredy Hasenmaile, during a web call.

    Hasenmaile projected that regardless of the severity of any final tariff measures, the pervasive uncertainty is stifling the industry, predicting a loss of momentum in the latter half of the year.

    Economic Activity Dips Following Early Surge

    Switzerland experienced a paradoxical first half of the year, driven initially by pre-emptive purchases but ultimately leading to a significant downturn. After a robust boost in the first quarter, economic activity fell to its lowest level in over 15 months.

    Raiffeisen now forecasts GDP growth of 1.1 percent for the current year and 1.0 percent for the next, a considerable drop from earlier projections made in December 2024, which had assessed a 1.3 percent growth for 2025. “The return to potential growth of around 1.5 percent is further delayed,” Hasenmaile noted, positioning Raiffeisen on the conservative end of economic forecasts.

    Mixed Signals in Industrial Performance

    The outlook for Swiss industry is bleak, with purchasing manager indices indicating poor business conditions. Domestically focused small and medium enterprises (SMEs) are faring better, continuing on a growth trajectory. Conversely, export-driven firms are witnessing dwindling demand, particularly from Germany, with only 20 percent anticipating any improvement.

    The service sector, which had seen sustained positive momentum for nearly a year, has now dipped below the growth threshold in the purchasing managers’ index, indicating rising concerns.

    Real Wage Growth Fuels Consumer Spending

    Despite the uncertain industrial backdrop, Swiss consumer spending remains robust, bolstered by wage increases and low inflation contributing to real wage growth. Yet, signs of a cooling labor market are increasingly evident.

    Employment Landscape Slows

    The labor market mirrors the economy’s mixed expectations, with the KOF employment indicator showing signs of weakness. Surveys reflect a dip in hiring intentions, hinting at slower employment growth and a seasonally adjusted uptick in unemployment. “So far, the industrial downturn has hardly affected the service sector,” Hasenmaile pointed out, “but even the previously resilient domestic market could encounter challenges as the year progresses.”

    Negative Interest Rates Unlikely in Switzerland

    As uncertainties around tariffs persist, they have become a significant hindrance to Switzerland’s return to potential growth, raising the proverbial elephant in the room. Hasenmaile commented on the Swiss National Bank’s (SNB) interest rates, stating, “Zero is not negative,” and he does not foresee the SNB pushing rates back into negative territory soon.

    Global Influence on Interest Rate Policy

    The robust Swiss franc plays a critical role in shaping interest rate policy conditions. The current strength of the dollar has also lent a hand to the eurozone. While further rate cuts are anticipated in the eurozone and the U.S., where more flexibility exists, Hasenmaile believes the European Central Bank is likely to keep rates steady in July.

    Population Growth Fuels Economic Activity

    Two consecutive years of moderate economic growth could potentially lead to a decline in per capita economic output in Switzerland. With the economy largely expanding due to population growth rather than productivity, maintaining pace with demographic changes remains a crucial factor. Hasenmaile predicts a population growth rate of 0.9 percent for 2025, falling slightly to 0.8 percent the following year. “Net immigration depends heavily on the domestic labor market and developments in the EU,” he concluded.

    Regional Disparities in Growth

    Raiffeisen’s analysis reveals significant regional disparities within Switzerland. While sectors driven by population growth—such as retail, education, and healthcare—are thriving, autonomous sectors like industry and IT services are either stagnating or contracting in many regions. Zurich stands out, accounting for over 40 percent of autonomous growth, particularly in IT and consulting services. Central Switzerland and parts of western Switzerland, like Nyon and Rolle–Saint-Prex, are resisting the tide of deindustrialization and showing dynamic growth, although the overall contribution to growth from autonomous sectors has diminished.

    Questions & Answers

    What factors are currently impacting Swiss economic growth?
    Key factors include global economic uncertainties, particularly concerning trade relations with the U.S., and substantial net immigration which has bolstered growth.

    How is the industrial sector performing in Switzerland?
    The industrial sector faces challenges, with many companies reporting poor business conditions and declining demand, especially from export markets like Germany.

    What is the outlook for interest rates in Switzerland?
    The Swiss National Bank is not expected to move interest rates into negative territory, as existing economic conditions do not warrant such a drastic measure.

  • Raiffeisen Aims Big by Thinking Small

    Raiffeisen Aims Big by Thinking Small

    After the takeover of Credit Suisse, cooperative banks reluctantly found themselves thrust into Swiss banking’s number two role. In a business dominated by major banks, Raiffeisen has ambitions.

    In a recent interview, Heinz Huber said the Raiffeisen Group has no interest in becoming an international player like UBS and Credit Suisse. We don’t want to be a big bank, said the CEO of Raiffeisen Switzerland, the country’s largest mortgage bank.

    Even so, the group’s moving into the number two slot in Swiss banking after the demise of Credit Suisse is grudgingly acknowledged, which isn’t to say that Huber’s not aiming high in some areas.

    The group made up of 219 individual institutions, is preparing to make its mark in asset management, an area dominated by UBS and Credit Suisse.

    Raiffeisen Group attracted 1.8 billion Swiss francs of new custody assets in the year’s first half. With client assets under management of 246.6 billion francs, it’s equivalent to the portfolio of a medium-sized Swiss private bank. Driven by asset management, net income from commission and service fees rose to 310.9 million francs.

    There’s more to come. In the first half of the year, we passed the mark of half a million custody accounts. With 3.65 million customers, I still see some potential, Huber said at a conference.

    Compared to UBS, which netted $15.3 billion of client assets in Switzerland in the past second quarter alone, Raiffeisen’s volumes look tiny. The Group reoriented its wealth business following a strategic turnaround when it sold its private banking subsidiary, Notenstein La Roche, and relaunched its mandate offerings four years ago.

    Two aspects of Raiffeisen’s new money should give the market leader pause. One is the dynamism the investment and pension business is showing, as 16,600 accounts were opened in the first six months of the year, while asset management mandates saw 15.6 percent growth.

    Then there’s the money’s source. Mandates are available from Raiffeisen for as little as 50,000 francs; in the case of the Rio digital asset management service, the minimum investment is 5,000 francs targeted at affluents.

    Raiffeisen wealth management’s results suggest cooperative members succeeded in cracking a notoriously difficult market.

    Other banks have been trying to accomplish that for years. If consulting firms like Oliver Wyman are to be believed, the potential in private banking for the masses is enormous, By 2026, the market is expected to generate revenue streams of $45 billion globally, and in four years, two-thirds of all private banking revenue could come from the affluents.

    Challenges remain, however, because it’s quite difficult for large asset managers with expensive structures to gain a profitable foothold. Raiffeisen’s advantage lies in being able to approach the affluent market from the bottom. With its enormous retail banking reach, it knows its customers long before they’re wealthy. Clients are already in the door when assets come into play upon retirement, inheritance, or the sale of a house or company.

    Still, it’s not quite that simple. We’ve invested a lot in consulting, says Huber. We want to ensure a basic understanding of issues among customers so decisions are made together.

    Rapid investments were made in products and services. The Group launched Rio digital asset management in 2020, and a digital pillar 3a pension offering was integrated into e-banking the following year. Last year, the product range was expanded with sustainable index-tracking funds, with around 95 percent of Raiffeisen’s fund volume invested sustainably.

    Huber attributes the rapid growth in recent months to this groundwork. We focus on investment solutions that are easy to understand and geared to the needs of our customers, which are already available for small assets.

  • Raiffeisen Pushes Foward with Asset Management Business

    Raiffeisen Pushes Foward with Asset Management Business

    Switzerland’s banking group Raiffeisen, saw mortgage loan volumes reach record levels last year.

    Raiffeisen Group posted a group profit of 1.18 billion Swiss francs ($1.3 billion) in 2022, it said in a statement Thursday. The cooperative bank, which consists of 220 banks, said that operational revenue increases drove its 10.6 percent profit increase over the previous year.

    The market leader for Swiss mortgages saw mortgage loans rise 3.7 percent to 203.7 billion Swiss francs, bringing its mortgage volume over the 200 billion mark for the first time.

    Despite a difficult market environment, Raiffeisen recorded a net new money inflow of 3.9 billion francs in its pension and investment portfolios. A total of more than 40,000 retirement and investment custody accounts were opened last year, 158 custody accounts per working day.

    The number of pension custody accounts increased by 17.6 percent, the number of asset management mandates by 34.4 percent, and the number of fund savings plan custody accounts by 11.8 percent.

    However, due to negative market developments, custody account volumes decreased by 4 billion Swiss francs to a portfolio of 41.1 billion Swiss francs, it added.

    Raiffeisen expects business to be solid in the coming months. However, the market environment remains challenging, it said.

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  • Raiffeisen Planning Digital Services Expansion

    Raiffeisen Planning Digital Services Expansion

    The Swiss cooperative bank plans to spend a significant portion of its 500 million Swiss franc strategy budget on digitization by 2025.

    Over the past several years, Raiffeisen Switzerland was replacing outdated banking systems which had taken up numerous resources. With that project now completed, the bank can proceed with its digitalization plans.

    Raiffeisen has attached great strategic importance to digitalization even before the group strategy. Our digital channels, especially our e-banking, have enormous significance. However, we want to position our digital solutions more broadly and continue to drive digitization as a complement to our physical branches, interim CIO Robert Schleich said in an interview with inside-it.ch

    With the foundation now in place for implementing digital products, Raiffeisen has reached a comfortable starting position from which digital services can be expanded, Schleich said.

    But the bank is not starting completely from scratch. Its mobile e-banking app has over one million users and, according to Schleich, is gaining ground among competitors. He admitted the bank was lagging behind competitors, but now that the core banking system has been renewed it can be built upon.

    Process efficiency is also an important element, Schleich said. For the core mortgage lending business, it’s not just about digitizing the existing process, but also improving it. That means the ability to conveniently apply for mortgages online and to be able to check the application more quickly.

    We’re spending 500 million francs on the entire group strategy by 2025. There’s more to it than digitization. For example, new customer business or the diversification of income. However, a significant portion of the overall budget is reserved for digitization itself, Schleich said.

    Schleich will be handing the CIO reins to Niklaus Mannhart in September 2022 at the latest, but cannot discuss issues with him since he is still under contract at his current employer.

    For now «I’m concentrating fully on the interim management of IT at Raiffeisen Switzerland. We are currently discussing what will happen after that. There are more than enough exciting tasks at Raiffeisen,» he said.

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