Result
The Raiffeisen Group generated a very good result in 2022, with a Group profit of CHF 1.18 billion. The profit exceeds the previous year’s result by 10.6%. The increases in operating income were the primary contributor to this. As 93% of net profit is retained, it remains within the cooperative and strengthens the capital base of the Raiffeisen Group.
Key performance indicators
| in CHF million, percent, number | 2021 | 2022 | Change in % | |||||||||
| Key figures income statement | ||||||||||||
| Gross result from interest operations | 2,402 | 2,569 | 7.0 | |||||||||
| Result from commission business and services | 536 | 591 | 10.3 | |||||||||
| Operating income | 3,383 | 3,529 | 4.3 | |||||||||
| Operating expenses | 1,895 | 1,972 | 4.1 | |||||||||
| Operating result | 1,268 | 1,354 | 6.8 | |||||||||
| Group profit | 1,069 | 1,182 | 10.6 | |||||||||
| Cost income ratio | 56.0% | 55.9% | ||||||||||
| Key balance sheet figures | ||||||||||||
| Total assets | 284,489 | 280,635 | -1.4 | |||||||||
| Loans to clients | 206,355 | 214,565 | 4.0 | |||||||||
| of which mortgage receivables | 196,360 | 203,656 | 3.7 | |||||||||
| Customer deposits | 201,729 | 204,785 | 1.5 | |||||||||
| in % of loans to clients | 97.8% | 95.4% | ||||||||||
| Total equity (without minority interests) | 19,179 | 20,673 | 7.8 | |||||||||
| Capital resources/liquidity1 | ||||||||||||
| CET1 ratio2 | 20.3% | 18.8% | ||||||||||
| Tier 1 ratio (going concern)2 | 21.7% | 18.8% | ||||||||||
| TLAC ratio | 23.4% | 24.9% | ||||||||||
| TLAC leverage ratio | 7.4% | 8.2% | ||||||||||
| Liquidity Coverage Ratio (LCR)3 | 185.4% | 168.4% | ||||||||||
| Net Stable Funding Ratio (NSFR)4 | 144.9% | 140.9% | ||||||||||
| Market data | ||||||||||||
| Share of mortgage market | 17.6% | 17.6% | ||||||||||
| Market share of client deposits | 14.0% | 14.5% | ||||||||||
| Number of clients | 3,606,540 | 3,637,706 | 0.9 | |||||||||
| Number of cooperative members | 1,963,593 | 2,001,499 | 1.9 | |||||||||
| Client assets | ||||||||||||
| Client assets under management5 | 241,226 | 242,239 | 0.4 | |||||||||
| Net new money client assets under management | 14,509 | 8,159 | -43.8 | |||||||||
| Risk ratio lending business | ||||||||||||
| Value adjustments for default risks | 243 | 248 | 2.0 | |||||||||
| as % of loans to clients | 0.118% | 0.115% | ||||||||||
| Value adjustments for expected losses (risk provisions) | 482 | 484 | 0.3 | |||||||||
| Resources | ||||||||||||
| Number of employees | 11,465 | 11,652 | 1.6 | |||||||||
| Number of full-time positions | 9,729 | 9,901 | 1.8 | |||||||||
| Number of locations | 820 | 803 | -2.1 | |||||||||
| 1 According to the systemic importance regime. | ||||||||||||
| 2 Due to the early fulfillment of the full 2026 TLAC requirements as of 31 December 2022 and the resulting higher reclassification of excess CET1 capital, this figure is reduced as of 31 December 2022. In return, the aggregate requirements for additional loss-absorbing funds (gone-concern funds) applicable as of 2026 have already been fully built up as of 31 December 2022. | ||||||||||||
| 3 The liquidity-coverage-ratio (LCR) measures whether a bank has sufficient liquid funds to cover its liquidity needs from its own funds over a 30-day period in the event of an emergency. The LCR puts the available liquid funds in relation to the expected net outflow. | ||||||||||||
| 4 The net-stable-funding-ratio (NSFR) serves to ensure sustainable and stable funding of a bank's lending and off-balance-sheet activities. In particular, it limits the risk of a bank financing its lending activities with deposits that are deemed too unstable and short-term. | ||||||||||||
| 5 The client assets shown include custody account assets plus liabilities arising from client deposits and cash bonds. "Liabilities arising from client deposits" includes client deposits that are not similar to an investment. The following are not included: fiduciary deposits, custody-only relationships (third-party banks and institutional clients where Raiffeisen acts solely as custodian) and assets of institutional investors where the business activity consists of liquidity and repo investments. Reclassifications between assets under management and unreported assets (such as custody-only) are shown as a change in net new money. | ||||||||||||
Very good annual result
The Raiffeisen Group generated a very good result in 2022, with a Group profit of CHF 1.18 billion. Raiffeisen attributes this success to the strong performance in the client business. The Group recorded pleasing growth in the mortgage business. The pension and investment business remains on a growth trajectory and makes an important contribution to diversification of the business model. The Group’s strategic progress is visible – Raiffeisen is now also an asset management bank.
The mortgage volume has grown by CHF 7.3 billion. Despite the challenges presented by the market environment, the Raiffeisen Group received new funds of CHF 3.9 billion into pension fund accounts and investment accounts. The number of pension fund accounts increased by 17.6%, while the number of asset management mandates rose by 34.4%. This demonstrates the great trust clients have in Raiffeisen’s investment expertise. On the income side, both interest operations and the neutral business saw an increase. In addition to successful development of the operational business, the Group expanded the cooperative network, thus enhancing its profile. In 2022, four of the previous six branches of Raiffeisen Switzerland were made into independent cooperative banks – the Zurich and Basel branches followed at the start of 2023.
Encouraging growth in the core business
The business volume continued to grow. Loans to clients rose by CHF 8.2 billion (+4.0%) to CHF 214.6 billion. Mortgage loans increased in line with the strategic ambition of tracking the market trend. The Raiffeisen Group maintained its strong position in a highly competitive environment, with market share of 17.6% remaining at the previous year’s level.
Although growth in customer deposits was more moderate, it is still at a high level. The increase was CHF 3.1 billion (+1.5%). Raiffeisen continued to expand its range of pension and investment products, and aligned the existing asset management mandates fully with sustainability. Around 7,700 new asset management mandates (+34.4%) were opened in the past financial year. The number of pension fund accounts went up by around 21,200 (+17.6%), while fund savings plan accounts were up by 9,900 (+11.8%). CHF 3.9 billion in net new money was paid into pension fund accounts and investment accounts. Due to the negative market trend, however, custody account volumes declined by CHF 4.0 billion (‑8.8%) overall.
Raiffeisen welcomed around 31,000 new clients in the past financial year. The number of cooperative members also increased. The Raiffeisen Group has more than 2 million cooperative members for the first time. This means that around a quarter of all adult residents of Switzerland is a co-owner of a Raiffeisen bank. Many people subscribed to share certificates, especially in urban areas and as a result of the branches being made independent. More than 47,000 people have subscribed to one or more share certificates of the six new Raiffeisen banks.
The Raiffeisen Group maintained its strong market position in a highly competitive environment.
Operational profitability remains strong
The operational profitability situation is very encouraging. The increase in the main pillar of income – interest operations – is slightly above the previous year’s level. The net result from interest operations climbed CHF 135.8 million (+5.6%) to CHF 2.5 billion. The interest rate turnaround by the Swiss National Bank (SNB) last year and rising interest rates are only slowly having an impact on the lending business. Almost 80% of mortgages are agreed for a fixed term, with the average fixed-interest period being over three years. The interest margin recovered slightly for the first time in years, at 0.92% (previous year: 0.89%). The market is highly competitive, which is why Raiffeisen will continue to operate in a challenging market environment in the coming quarters.
Income in the neutral business again performed positively. The result from commission business and service transactions again rose sharply, up CHF 55.3 million (+10.3%) to CHF 591.4 million. The result from trading activities also increased, rising by CHF 9.7 million (+4.0%) to CHF 254.3 million. This trend indicates that the Group’s income base has further diversified. The proportion of neutral business in operating income increased from 23.1% in the previous year to 24.0%. The other result from ordinary activities was CHF 55.1 million (–29.2%) lower than in the previous year, which included a one-off effect relating to the disposal of financial investments. Overall, due to the strong operating business, operating income is significantly above the previous year’s level, up CHF 145.6 million (+4.3%) to CHF 3.5 billion.
Raiffeisen once again demonstrated its operational strength and recorded an excellent result.
Costs rose within bounds of expectations
As expected, costs increased in the year under review. Operating expenses rose CHF 77.4 million year on year (+4.1%) to CHF 2.0 billion. This was due to investment in projects to implement the Group strategy and a further increase in staff for advising clients at Raiffeisen banks. In addition, as events were not possible in the past few years due to Covid-19, the expenses for client events and member meetings returned to a higher level. Personnel expenses increased by CHF 37.3 million (+2.7%) to CHF 1.4 billion. General and administrative expenses rose by CHF 40.1 million (+8.0%) to CHF 543.0 million.
Despite the cost increases, the high rises in income led to a slight improvement in the cost/income ratio, from 56.0% at the end of the previous year to 55.9%. This positions the cost/income ratio at a very good level and the Group’s productivity remains high. The value adjustments on participations and amortisation of tangible fixed assets and intangible assets were significantly lower than the previous year, while the changes in provisions and other value adjustments and losses increased, albeit at a low level. The operating result in the year under review was CHF 1.35 billion, or CHF 85.9 million (+6.8%) higher than in the previous year.
55.9%
This cost/income ratio is a very good figure for a bank such as Raiffeisen.
Capital base further strengthened and loss-absorbing capital
fully built up
Raiffeisen achieved a very good annual result. The profit increased significantly by CHF 113.1 million (+10.6%) to CHF 1.18 billion. As over 90% of the profit is retained in the form of reserves, the Group is able to further strengthen its capital base.
In the past financial year, four of the six branches of Raiffeisen Switzerland were made into independent cooperative banks. The most important element in capitalising the new Raiffeisen banks was the subscription of cooperative share certificates by clients, who thus became co-owners of their Raiffeisen bank. As a result, new cooperative capital in the amount of CHF 161.5 million has been received into the four Raiffeisen banks as at 31 December 2022. Overall, the Group’s cooperative capital increased by CHF 377.8 million, chiefly due to multiple subscriptions. The high inflow strengthens the capital base significantly and is an expression of trust in the Raiffeisen cooperative model.
The Raiffeisen Group is exceptionally well capitalised. With a TLAC ratio of 24.9%, Raiffeisen meets the risk-weighted requirements of 20.2% (requirements in accordance with contingency planning for systemically important banks, without applying transitional provisions). The requirement of 20.2% already includes the countercyclical capital buffer on Swiss residential properties. This buffer was reactivated by the Federal Council with effect from 30 September 2022 and took effect at Raiffeisen as of 31 December 2022 at the rate of 1.4%.
Raiffeisen also more than meets the unweighted TLAC leverage ratio requirements of 6.6%, with a figure of 8.2%.
Raiffeisen again issued bail-in instruments in 2022. The Group succeeded in placing a volume of EUR 500 million. Bail-in instruments, also referred to as gone-concern capital, serve as additional loss-absorbing capital in the event of a crisis. As a systemically important institution, Raiffeisen has to meet higher capital requirements and requirements for loss-absorbing capital. In principle, the requirements for additional loss-absorbing capital are to be fully built up by 2026 through transitional provisions. As a result of the bail-in bonds issued and the higher reclassification of excess going-concern capital as gone-concern capital, as at 31 December 2022 Raiffeisen already meets the requirements specified for the event of a crisis and within the scope of contingency planning in full. Raiffeisen is therefore not applying the transitional provisions.
Income statement
Income from operating activities
The income situation has performed well. Both income from interest operations and from the neutral business increased. Only the other result from ordinary activities was lower, due to a high one-off effect in the previous year. Overall, operating income increased by CHF 145.6 million (+4.3%) to CHF 3.5 billion.
3.5
CHF billion
Operating income of CHF 3.5 billion was more than 4% above the prior-year figure.
Interest operations
The Group recorded a pleasing increase in the main pillar of income, interest operations. The gross result from interest operations increased by CHF 167.5 million (+7.0%) to CHF 2.6 billion. This is the first time in several years that the interest margin increased slightly. At 0.92%, it is three basis points higher than at the end of the previous year. The turnaround in interest rates by the SNB last year is, however, only slowly having an impact on the lending business, as around 80% of Raffeisen’s mortgages are agreed with a fixed term. Due to the competitive situation, the pressure on the interest margin is likely to continue. After net value adjustments were released last year as a result of the economic recovery, net value adjustments for default risks and losses from interest operations in the amount of CHF 19.6 million were recognised in the year under review. At 0.115%, the total of value adjustments for impaired receivables relative to loans to clients remains at a very low level (previous year 0.118%) despite the slightly increased need for value adjustments. The net result from interest operations climbed CHF 135.8 million (+5.6%) from the previous year to CHF 2.5 billion.
+5.6%
The net result from interest operations increased by CHF 135.8 million to CHF 2.5 billion.
Commission business and service transactions
Income from commission business and service transactions also increased again. The high inflows from pensions and investments contributed to this. In this respect, income from the asset management business performed extremely well. Overall, however, commission income from securities trading and investment activities was slightly lower than in the previous year. The turnover in securities declined compared to the previous year, due to the negative market trend. In the case of income from other services, there were changes in the income structure resulting from adjustments to the business model for issuing credit cards. This affects both the commission income from other services and the commission expenses. Overall, the result from commission business and service transactions increased by CHF 55.3 million (+10.3%) to CHF 591.4 million. Commission business and service transactions thus once again made a significant contribution to the success of the Raiffeisen Group, with its share of total operating income continuing to increase in line with the strategic objectives. This shows that the strategic initiatives to strengthen the pension and investment business are having an effect.
24.0%
Raiffeisen further increased the proportion of income from neutral business in its operating income.
Trading activities
The result from trading activities and the fair value option also performed well. The year-on-year increase was CHF 9.7 million (+4.0%), to reach CHF 254.3 million. The Raiffeisen Group increased its foreign exchange business through a variety of sales activities, especially in the corporate client business. A positive sign is the large growth in foreign exchange transactions in e-banking, as is the high level of activity among clients with direct access to trading. As our clients travelled more after the Covid-19-related decline, demand for foreign currencies increased.
Other result from ordinary activities
In contrast to other income from the operational banking business, the other result from ordinary activities fell by CHF 55.1 million (–29.2%) to CHF 133.6 million. The fall is mainly due to a large one-off effect in the previous year. Disposals of financial investments generated high income in the past year. Income from participations climbed favourably by CHF 19.7 million (+26.8%). This is due to write-ups on the investments in Leonteq AG and Viseca Payment Services AG, valued according to the equity method. In addition, higher dividend income was received.
Operating expenses
On the cost side, the Raiffeisen Group posted an increase as expected. These higher costs were primarily due to investment in implementing the Group strategy and a further increase in staff for the advisory teams at Raiffeisen banks. Operating expenses rose by a total of CHF 77.4 million (+4.1%) to CHF 2.0 billion.
Personnel expenses
Personnel expenses increased by CHF 37.3 million (+2.7%) to CHF 1.4 billion. There were 172.4 full-time positions added during the reporting period. This means that the Raiffeisen Group’s headcount as at 31 December 2022 was 9,901 full-time positions. The Raiffeisen banks account for a major part of the staff increase, as they have again invested in additional advisory capacity.
172 new full-time positions led to slightly higher personnel expenses.
General and administrative expenses
General and administrative expenses were significantly higher than in the previous year, up CHF 40.1 million (+8.0%) to CHF 543.0 million. Following the Covid-19-related cancellations in the past few years, more client events have been taking place again. Moreover, general and administrative expenses again include higher accruals for costs relating to member meetings and anniversaries in the 2022 financial year. Higher sponsorship contributions were also made by the Raiffeisen banks.
Value adjustments on participations and depreciation and amortisation of
tangible fixed assets and intangible assets
Value adjustments on participations and depreciation and amortisation of tangible fixed assets and intangible assets fell by a total of CHF 28.6 million (–13.1%) to CHF 188.8 million in the year under review. Value adjustments on participations were CHF 9.3 million lower than in the same period of the previous year. Depreciation and amortisation of tangible fixed assets decreased by CHF 13.6 million year on year, while depreciation and amortisation of intangible assets was down by CHF 5.7 million.
Changes in provisions and other value adjustments,
and losses
The item “Changes in provisions and other value adjustments, and losses”, at CHF 14.1 million, was CHF 11.0 million higher than in the same period of the previous year. Provisions for default risks have been set aside in the net amount of CHF 8.9 million. Net new provisions for expected losses were CHF 1.7 million.
Operating result
Due to the high operating income, the operating result increased further despite the rise in costs. The increase amounted to CHF 85.9 million (+6.8%) to reach CHF 1.35 billion.
+85.9
CHF billion
The operating result rose to CHF 1.3 billion.
Extraordinary income and expenses
Extraordinary income of CHF 33.6 million includes gains from the disposal of tangible fixed assets, and gains from the sale of the investments in responsAbility Investments AG and Liiva AG. The extraordinary expenses of CHF 9.8 million include losses from the sale of tangible fixed assets and from the deconsolidation of a participation.
Taxes
Tax expenses rose CHF 13.2 million year on year (+7.2%) to CHF 196.2 million. The financial statements of the Raiffeisen Group include provisions for deferred taxes so as to correctly present the tax effect of the measurement differences between the Group’s true-and-fair-view financial statements and the single-entity financial statements of the consolidated companies. The actual tax expenses were CHF 175.9 million.
Balance sheet
The Raiffeisen Group’s total assets fell by CHF 3.9 billion (–1.4%) compared to the end of the previous year. The drop in total assets is the result of active balance sheet management and liquidity management, which may lead to fluctuations around the reporting date. In line with the Group’s strategic ambition, the balance sheet items from the client business have grown at about the same level as the market, or slightly above it.
Amounts due from and liabilities to banks
At CHF 2.2 billion, amounts due from banks were CHF 1.0 billion (–32.3%) lower than in the previous year. Amounts due to banks fell by CHF 1.9 billion (–12.1 %) to CHF 14.0 billion. These items may be subject to fluctuations around the reporting date due to active balance sheet management and due to liquidity management.
Receivables and liabilities from securities financing transactions
Securities financing transactions are subject to fluctuations depending on the need for liquidity management. Due to expired, non-renewed repo transactions, liabilities from securities financing transactions fell by CHF 7.4 billion to CHF 35.0 million. As in the previous year, there are no receivables from securities financing transactions as at the cut-off date.
Loans to clients
The steady growth in the business volume continued in the past financial year. The Group succeeded in maintaining its strong market position in the mortgage business. Raiffeisen reached the CHF 200 billion mark for the first time. Mortgage loans increased by CHF 7.3 billion (+3.7%). The ambition to grow at about the same level as the market was therefore achieved. Market share was stable at 17.6%. Raiffeisen performed well in a highly competitive environment.
+7.3
CHF billion
With this growth in the mortgage business, Raiffeisen reached the CHF 200 billion mark for the first time.
Amounts due from clients rose by CHF 913.7 million (+9.1%) to CHF 10.9 billion, despite the fact that there are numerous repayments of Covid-19 loans posted to this item. During the period under review, Covid-19 loans totalling around CHF 400 million were repaid. The nonetheless significant increase is attributable to increased growth in the corporate client business. Total loans to clients increased by 4.0%, by CHF 8.2 billion to CHF 214.6 billion. Saron Flex mortgages and money market loans for businesses saw a substantial increase. Due to the changes in the interest rate environment, clients increasingly turned to money market-based products.
The quality of the credit portfolio remains high. Value adjustments for impaired receivables increased insignificantly, from CHF 243.0 million in the previous year to CHF 247.8 million. The proportion relative to total loans to clients even fell to 0.115%(previous year: 0.118%). This shows that growth is in line with the unaltered cautious risk policy. Value adjustments for expected losses increased by CHF 1.3 million net year on year, which is also only a slight rise.
Trading activities
Trading portfolio assets increased by CHF 315.7 million (+12.3%) to CHF 2.9 billion in the period under review. Owing to its short-term nature, the trading volume is generally subject to some fluctuation around the reporting date.
Financial investments
Financial investments mainly consist of highly rated bonds; they serve to manage liquidity in line with legal requirements and internal objectives. The financial investments are therefore managed on an opportunistic basis in the course of active liquidity management. In the year under review, the portfolio of financial investments increased by CHF 6.6 billion (+77.2%) to CHF 15.2 billion, due in part to the purchase of SNB money market securities.
Non-consolidated participations
During the year under review, the book value of non-consolidated participations increased by CHF 84.1 million (+11.6%) to CHF 808.2 million. First, this is due to write-ups on the investments in Leonteq AG and Viseca Payments AG, valued according to the equity method. Second, the Pfandbriefbank schweizerischer Hypothekarinstitute AG carried out a capital increase in the year under review. Raiffeisen participated in it by using its subscription rights to invest around CHF 28 million.
Tangible fixed assets
The book value of tangible fixed assets rose slightly by CHF 22.0 million (+0.7%) to CHF 3.0 billion. Investments totalling CHF 246.6 million were made in the year under review, mostly in bank buildings. Against this stood depreciation of CHF 185.7 million and disposals of CHF 30.6 million.
Net investments by category
| in million CHF | 2018 | 2019 | 2020 | 2021 | 2022 | |||||
| Bank buildings | 109 | 92 | 85 | 89 | 124 | |||||
| Other real estate | 53 | 17 | 6 | 36 | 34 | |||||
| Alterations and fixtures in third-party premises | 9 | 26 | 34 | 17 | 23 | |||||
| IT hardware | 14 | 16 | 21 | 10 | 10 | |||||
| IT software | 157 | 56 | 24 | 15 | 9 | |||||
| ATMs | 12 | 15 | 11 | 7 | 6 | |||||
| Furniture | 6 | 6 | 4 | 2 | 3 | |||||
| Fixtures | 10 | 10 | 6 | 4 | 3 | |||||
| Office machines, vehicles, security installations | 13 | 9 | 4 | 5 | 4 | |||||
| Total net investment | 383 | 247 | 195 | 185 | 216 |
Net investments by region
| in million CHF | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
| Lake Geneva region | 35 | 27 | 36 | 36 | 37 | |||||||||||||||
| Espace Mittelland | 43 | 38 | 29 | 44 | 47 | |||||||||||||||
| Northwestern Switzerland and Zurich | 59 | 38 | 39 | 26 | 46 | |||||||||||||||
| Eastern Switzerland1 | 217 | 95 | 53 | 51 | 32 | |||||||||||||||
| Central Switzerland | 21 | 40 | 28 | 7 | 31 | |||||||||||||||
| Ticino | 8 | 9 | 10 | 21 | 23 | |||||||||||||||
| Total net investment | 383 | 247 | 195 | 185 | 216 | |||||||||||||||
| 1 Incl. central investment by Raiffeisen Switzerland. | ||||||||||||||||||||
Intangible assets
The book value of intangible assets amounted to CHF 6.5 million in the year under review (previous year: no intangible assets). These are intangible assets that arose when implementing a new business model in the credit card business.
Amounts due in respect of customer deposits
Growth in customer deposits was much more moderate than in previous years. Amounts due in respect of customer deposits increased by CHF 3.1 billion (+1.5%) to CHF 204.8 billion. In an overall declining market, Raiffeisen expanded its market share from 14.0% at the end of the previous year to 14.5%. Due to the increase in loans to clients during a period in which growth in customer deposits was moderate, the refinancing ratio fell slightly from 97.8% in the previous year to 95.4% at the end of the year under review. This means that more than 95 % of loans to clients are still refinanced at a stable level with customer deposits, a very high percentage.
95.4%
This refinancing level confirms that loans to clients are refinanced at a stable level with customer deposits.
Liabilities from other financial instruments at fair value
This item contains the structured products issued by Raiffeisen Switzerland B.V. Amsterdam, which are measured at market value. Liabilities from other financial instruments at fair value were down CHF 488.7 million (–21.9%) to CHF 1.7 billion. The accounting treatment varies for structured products issued by Raiffeisen Switzerland. Their underlying components are reported in the item “Bond issues and central mortgage institution loans” and are covered below.
Bond issues and central mortgage institution loans
Bond issues and central mortgage institution loans decreased by CHF 2.1 billion (–6.0%) to CHF 32.0 billion in the year under review. The reduction is due to expired money market securities in the amount of CHF 3.2 billion. In contrast, central mortgage institution loans grew by CHF 1.3 billion to CHF 27.0 billion. Due to maturities, Raiffeisen Switzerland’s unsubordinated bonds are CHF 176.6 million lower than in the previous year.
Raiffeisen again issued a bail-in bond in the past financial year to build up loss-absorbing capital for the event of a crisis. The Group was successful in placing a volume of EUR 500 million.
Within the Raiffeisen Group, Raiffeisen Switzerland B.V. Amsterdam as well as Raiffeisen Switzerland issue structured products. The instruments underlying the structured products issued by Raiffeisen Switzerland fell by CHF 330.7 million to CHF 1.0 billion. Due to general uncertainty on the financial markets, demand for structured products also declined. Volume and portfolio performance in the year under review was also significantly influenced by the lower valuations compared to the previous year. All of the Raiffeisen Group’s structured products fell by CHF 910.6 million to CHF 2.7 billion.
Provisions
Provisions increased by a total of CHF 14.1 million (+1.5%) to CHF 947.1 million. Provisions for deferred taxes rose by CHF 27.2 million. Provisions for default risks increased by CHF 4.7 million and those for expected losses by CHF 1.7 million. Other provisions fell by CHF 19.5 million. Provisions totalling CHF 21.3 million were applied for their intended purpose in the year under review.
Capital adequacy / equity capital
The equity capital of the Raiffeisen Group (including minority interests) rose significantly by CHF 1.5 billion (+7.8%) to CHF 20.6 billion in the year under review. The cooperative capital increased by CHF 377.8 million to CHF 3.1 billion (+14.0%). When four of the six branches of Raiffeisen Switzerland were made independent, this alone brought in capital of CHF 161.5 million to the Group in 2022. The remaining increase is due to the high retention of earnings. The Raiffeisen Group is exceptionally well capitalised and the TLAC ratios were further increased. With capital and loss-absorbing capital amounting to CHF 23.1 billion, the Group’s risk-weighted TLAC ratio is 24.9%. The unweighted leverage ratio is 8.2%.
+7.8%
Equity capital increased to CHF 20.6 billion in the year under review.
Economic outlook for 2023
The market environment remains challenging. The rise in interest rates and high inflation are leaving their mark. Economic indicators point to a slowdown in growth. The Swiss economy is unlikely to escape the global economic downturn in the current year. The Ukraine war and the related energy crisis are also having a negative impact on Swiss industry. Raiffeisen does not see an acute risk of recession, especially since the mild winter has very much reduced the risk of a gas shortage, and the manufacturing sector is less energy intensive than in other European countries. The economists at Raiffeisen Switzerland expect Switzerland’s gross domestic product to grow by a reasonable 1%. Inflation in Switzerland remains comparatively moderate.
The Swiss home owner market remains relatively unperturbed by the sustained higher level of interest rates. Due to the rise in interest rates, property investments are less attractive and less affordable for potential home buyers than in recent years. On the other hand, the high level of immigration into Switzerland combined with a declining housing supply is increasingly leading to a shortage of available living space. This raises the pressure on rents, but stabilises property prices.
On the capital markets, Raiffeisen expects another challenging year marked by volatility in 2023. For bonds, the turnaround in interest rates is creating interesting opportunities. In the case of equities, the focus remains on quality stocks from defensive sectors such as food, healthcare and consumer goods.
The economists at Raiffeisen Switzerland expect Switzerland’s gross domestic product to grow by 1%.
Development of the Raiffeisen Group's business
Raiffeisen is well positioned strategically and financially, and can act from a position of strength. The Raiffeisen 2025 Group strategy will continue to be pursued consistently in the current year, with the primary objective of further diversifying the business model. The aim is to maintain or slightly increase income in all income items. On the cost side, Raiffeisen expects costs to rise because of additional expenses to implement the Group strategy and as a result of growth. Raiffeisen is cautiously optimistic for 2023 and expects solid business performance.
The Raiffeisen Group is well positioned both strategically and financially, and expects to see solid business performance in the 2023 financial year.