Banks Luzerner Kantonalbank raises profit forecast for 2024

Luzerner Kantonalbank (LUKB) expects higher profits for 2024. The bank cites the generally improved earnings situation, for example in the investment and trading business, as well as active interest rate risk management in an environment of falling interest rates.

LUKB is now targeting a consolidated profit of 270 to 285 million francs, according to a statement on Friday. Previously, the bank was expecting a profit in the region of the previous year, which amounted to CHF 265.4 million.

The higher forecast is subject to the condition that no unexpected or serious events occur, the bank announced. In addition, the new forecast largely compensates for the dilutive effect on earnings per share caused by the 2023 capital increase.

Clients have concluded significantly more asset management and advisory mandates and invested in the funds in recent months, CEO Daniel Salzmann explained in the press release. The strategic initiatives in the trading business have also had a positive impact. These included the expansion of the issuing business in the bond market and the custody function for digital assets.

Salzmann also believes that LUKB is well positioned with regard to the cuts in key interest rates that have taken place or may still be expected. Thanks to active risk management, the bank has largely compensated for the cuts. The bank also benefits from the quality of its loan portfolio and low value adjustments.

SDA