Banque Cantonale Vaudoise Reports 5% Profit Growth Amid Diversified Revenue Model
The Swiss regional bank posted CHF 225 million in H1 2026 net profit, benefiting from tight cost control and strong deposit growth despite low interest rates.
Profit Growth Despite Rate Headwinds
Banque Cantonale Vaudoise (BCVN) delivered a 5% increase in net profit to CHF 225 million for the first half of 2026, according to CEO Pascal Kiener, who attributed the performance to the bank's diversified business model and disciplined cost management. "Basically, BCV is doing quite well with continued growth in all business sectors," Kiener said during the earnings call (earnings call, 2026-08-20).
The bank achieved "only 1%" growth in total costs, including personnel, operating expenses, and amortization, while revenues edged higher despite what Kiener described as a "negative or the low interest rate environment" (earnings call, 2026-08-20). BCV's revenue diversification through private banking and asset management distinguished it as "the more diversified in terms of revenues of all cantonal banks," according to Kiener (earnings call, 2026-08-20).
Business Volume Expansion
Mortgage and loan volumes expanded across the board, with the retail banking segment on track to meet the bank's "roughly 4%" annual mortgage growth target and "2%" for customer deposits (earnings call, 2026-08-20). Customer deposits rose CHF 1.1 billion, a net increase that CFO Thomas Paulsen noted was "even more pleasant" given that one large depositor had withdrawn funds during the period (earnings call, 2026-08-20).
Assets under management reached CHF 142 billion, with "2/3 of this increase" attributable to market performance, while the bank also saw "good results in net new money" from retail, SME, and institutional clients (earnings call, 2026-08-20).
COVID Loan Legacy and Credit Quality
Kiener highlighted the strong performance of Switzerland's COVID-19 bridge loan program, reporting that "93% are paid back by the customer" with an additional "8% by the guarantee corporate" backed by the Swiss Confederation (earnings call, 2026-08-20). This sharply contrasts with the "20% to 25% loss" originally assumed when the program launched, demonstrating what Kiener called the resilience of the Swiss economy (earnings call, 2026-08-20).
The bank remains cautious on trade finance given "geopolitical issues" and doesn't "expect to grow this business in the next 2 to 3 years, unless suddenly, the U.S. Iran war is solved, which I don't believe, and the same for the war between Russia and Ukraine" (earnings call, 2026-08-20).
Capital and Outlook
Risk-weighted assets increased approximately 5% year-on-year, driven by mortgage growth and a regulatory capital increase at the central mortgage institution that created "additional negative impact of CET1 of about 0.2%" in the second half of 2025 (earnings call, 2026-08-20). Paulsen indicated this one-time effect means future risk-weighted asset growth should align more closely with mortgage expansion.
Looking ahead, Kiener expects Swiss GDP growth "very close to 1% this year and probably slightly better next year," though he acknowledged uncertainty around U.S. trade policy, noting "I cannot really follow exactly what's going on" with tariff negotiations (earnings call, 2026-08-20). The bank's mortgage business is expected to benefit from continued population growth of "between 1% and 1.5%" driven by immigration, outpacing housing supply and driving vacancy rates to just 87 units (earnings call, 2026-08-20).
This article was generated by MarginX from the earnings call on 2026-08-20. It is not investment advice.