Raiffeisen poised for more growth after record year

Raiffeisen, Switzerland’s third largest banking group, presented annual results on Friday that serve as another reminder that 2009 was a prosperous year for many Swiss financial groups, in spite of the recession.

The co-operative banking concern boosted its net profit last year by 14.4 percent to a record 645.4 million francs as it benefited from a significant influx of new customers and a jump in mortgage business.

“Raiffeisen was able to profit last year again from its excellent positioning, presenting a model sustainable business,” chairman Pieren Vincenz, told a press conference in Saint Gallen.

Similar comments were made by Patrick Gisel, Raiffeisen vice-chairman at a simultaneous press conference in Lausanne. The Vaud capital is the headquarters for the group’s operations in French-speaking Switzerland.

The co-op group - the biggest retail bank in Switzerland - attracted 101,000 new customers, bringing its total to 3.3 million (up three percent), while boosting its membership by 70,000 to 1.6 million.

Virtually all sectors of the group’s business did well, as assets rose six percent to 139.5 billion francs and it added 330 new employees to its staff of around 8,000 full-time equivalent employees.

Raiffeisen recorded its best year in history for growth in mortgages, rising 9.1 percent to 110.7 billion francs.

Assets under management rose 8.1 percent to 134 billion francs, client deposits increase 6.1 percent to 110.7 billion francs and client loans jumped 8.3 percent to 117 billion francs.

Like other smaller banking interests, Raiffeisen benefited from the problems of UBS, which lost a significant number of clients last year.

Commenting on its improved business, the banking group did not mention Switzerland’s largest bank by name but its said in a statement that “since the financial crisis an increasing number of people intent on security trust the values of Raiffeisen”.

The group said it is continuing to grow in 2010 with the opening of two new banks in Zurich, a new office in Adliswil and a customer centre in Winterthur.

Other outlets are planned for Geneva (in the Servette neighbourhood), in Vuadens (Fribourg), Moutier (Bern) and Délémont) Jura.

Raiffeisen consists of a network of 350 independent but affiliated banks with a total of 1,146 branches across the country.

Its results this week follow similarly upbeat reports from cantonal banks, with those in Valais, Vaud and Geneva, recently all reporting improved business.

These banks focus their activities on local customers and businesses, rather than the global banking of Swizerland’s biggest financial institutions, UBS and Credit Suisse.

But domestically they have taken a bite out of the market segment once dominated by the big two.

UBS, which has slashed staff and operating expenses, acknowledged that outflows of customers in Switzerland contributed to its 2.7-billion-franc loss in 2009.

Swiss private banks have been prospering, as well, as the banking giant tries to find its feet.

Basel-based Bank Sarasin earlier this week reported a six percent rise in net profit to  120 million francs.

More impressively, the bank saw its assets under management jump by 34 percent to just over 90 billion francs.

Controlled by Rabobank, the Dutch financial group, Sarasin has focused on investments in sustainable development and has committed to becoming a “carbon neutral” bank.

Noting the “green roof” of the bank’s headquarters, covered with grass and plants, David Bain, a columnist for the Wealth Bulletin website said it is proving that sustainable investing can be profitable.

“It is also helping to define private banking post-banking secrecy,” Bain added.