In 2017, the Raiffeisen Group built on the previous years' good results. Growth continued both in loans to clients and the deposit business, although at a slightly slower pace than in 2016. Income went up across the board in the current year. In addition to achieving favourable growth in our core business, we also made further strides in the investment and corporate client business.
Longer value chain in the core business
By establishing Raiffeisen Immo AG, Raiffeisen has entered real estate marketing with a pilot operation in Northwestern Switzerland and the Bernese Oberland – a bold step to extend the value chain in its core business. RaiffeisenCasa, the expanded home and real estate portal, offers comprehensive home information and services in addition to its established real estate marketplace. As a result, clients enjoy a complete, seamless range of services for residential properties.
Raiffeisen invests in the future
Raiffeisen is perfectly poised for the continued digital transformation and is actively seizing opportunities while examining and utilising new technologies to streamline processes. Raiffeisen also uses the new possibilities of digital technology to develop novel, innovative products and services to satisfy and surpass client expectations.
The new "Raiffeisen Piazza" app, for example, offers the Raiffeisen banks an additional channel for communicating with clients via chat. The app also provides anytime, anyplace access to regional news and information from the local Raiffeisen banks. In addition, the "lokalhelden.ch" crowdfunding platform supports the realisation of regional projects. Through this platform, associations and nonprofits can collect donations simply, efficiently and digitally, and finance projects that benefit society. "Raiffeisen Piazza" and "lokalhelden.ch" share Raiffeisen's cooperative values, local roots and client intimacy, and innovatively bring them to the digital world.
Through RAI Lab, its innovation incubator, Raiffeisen researches future trends, technologies and business models to capture important trends and introduce them into the Raiffeisen Group. Raiffeisen formed the "Swiss Fintech Innovations" association along with around 16 other banks and insurers in 2017. This association aims to use networks and collaborations to experiment and innovate, pool interests, share knowledge and work out novel solutions. It allows Raiffeisen to advocate issues outside its own organisation and discuss them across disciplinary lines. Raiffeisen also plays an active part in the SwissID. Together with several other leading Swiss companies, Raiffeisen signed a Memorandum of Understanding (MoU) as part of the 2017 Digital Day. The MoU laid the groundwork for establishing a joint company (SwissSign Group AG) that aims to develop and implement a simple, safe and unambiguous method of digital identification for the Swiss population.
Another venture launched in 2017 was Raiffeisen TWINT, a new channel for mobile payments. With this "digital wallet", clients can make cashless payments, easily send and request money from friends, conveniently shop online or receive attractive discounts. Around 100,000 clients had signed up for Raiffeisen TWINT by the end of 2017.
The first wave of Raiffeisen banks migrated to the new Avaloq-based core banking system at the turn of the year. The new system simplifies the IT landscape and provides a strong foundation for future digitisation projects.
Successful completion of the optimisation of Notenstein La Roche Private Bank Ltd's internal processes and organisational structures
Notenstein La Roche Private Bank Ltd's organisational structures, processes and service range were optimised, thereby reducing operating expenses even more. In 2017, we continued to tighten our focus on the Swiss market and a small number of target markets. To support this objective, we sold the non-strategic Eastern Europe business. Additional measures to grow assets and increase income will be implemented in 2018.
The third quarter of 2017 was marked by the 1 October 2017 rollout of the new core banking system, which is also based on Avaloq. The private bank was put under new leadership at the same time. Dr Patrick Fürer, who joined Notenstein La Roche Private Bank Ltd in the spring as its CFO, took over as CEO in October 2017.
Sale of participations in Helvetia and Avaloq
Raiffeisen sold its participations in Helvetia and Avaloq in 2017 for a healthy profit. The sale was related to the realignment of Raiffeisen's cooperation strategy. Under this strategy, successful cooperation does not necessarily require an equity investment. Furthermore, the sale of the participations strengthens Raiffeisen's equity base and sends out a clear signal about its commitment to focus on its core business.
Persistently high expenses for regulatory projects
Regulatory compliance remained a challenge in 2017, necessitating substantial investments in human resources and infrastructure. The requirements resulting from our classification as a systemically important bank were implemented to a substantial extent. In June 2017, the Federal Council published an evaluation report defining the TLAC (total loss absorbing capacity) requirements for systemically important banks in Switzerland. These are additional capital requirements that the Raiffeisen Group will most likely be required to meet starting in 2025. Under these requirements, Raiffeisen must have additional funds to cover a potential reorganisation by the stated deadline. Thanks to its reliable cooperative business model, Raiffeisen currently believes that it will be able to meet these additional requirements on its own without having to raise extra capital.
Once again, the current financial year underscored the strength of Raiffeisen's cooperative business model, even in a challenging environment, and showed that the rigorous implementation of the strategic objectives lays the groundwork for Raiffeisen's continued growth and success.