Financial Services
Migros Bank remains on a growth course. In the 2014 financial year, there was a substantial increase in both savings deposits and mortgage volume.
Financial Services
Financial services
| CHF million | 2013 | 2014 | Change compared to previous year |
|---|---|---|---|
| Net sales revenue from goods and services sold | 3.4 | 2.9 | -14.7% |
| Income before financial services business | 891.1 | 872.6 | -2.1% |
| Other operating income | 4.3 | 2.7 | -37.2% |
| Total income | 898.8 | 878.2 | -2.3% |
| Operating profit before effect from pension plans (EBIT) | 240.9 | 279 | 15.8% |
| Segment assets | 38'851.8 | 40'845.4 | 5.1% |
| Investments in long-term assets | 16.9 | 15.6 | -7.7% |
| Workforce {(annual average) | 1'552 | 1'526 | -1.7% |
Growth in customer deposits and customer lending
Migros Bank continued to benefit from a strong inflow of savings deposits in the reporting year. Total customer deposits rose by CHF 1.5 billion (+4.8%) to CHF 32.3 billion in 2014. Private and premium accounts recorded the strongest growth (+10.6%), followed by pillar 2 and 3 retirement accounts (+6.0% and +8.8% respectively). Overall, this means that Migros Bank has generated new customer deposits of more than CHF 10 billion since the start of the financial crisis, with the balance sheet total exceeding the CHF 40 billion mark for the first time in the reporting year.
Mortgage lending grew by CHF 1.4 billion (+4.6%) to CHF 32.6 billion. Migros Bank adhered to its careful lending policy. On the balance sheet date, 97% of the portfolio of mortgages on residential properties consisted of mortgages granted to first-time buyers with a loan-to-value rate of up to 67%. The average loan value was CHF 304'000 for apartments and CHF 415'000 for detached houses. Fixed-rate mortgages made up more than 90% of the total mortgage portfolio.
The number of asset management agreements also rose considerably (+7.2%). The volume of Migros Bank's own funds exceeded the two billion mark.
Operating income at record levels
The information given in Migros Bank's income statement complies with the standard accounting regulations for banks in accordance with RRV-FINMA and shows net income from financial services, which is independent of market interest rates, rather than total income.
Operating income rose by 3.0% to CHF 614 million. This represents the highest level in the company's history. Broken down into customer groups, one half of operating income came from the private-clients segment, the other from the premium-banking and corporate-clients segments. Commission income increased by 0.3% to CHF 285 million over the previous year. Ultimately, gross profit increased by 6.1% to CHF 329 million. Due to generally positive earnings performance and successful cost management, the cost/income ratio sank from 48.0% to 46.5%.
Expansion of the branch network
Migros Bank continued to expand its branch network in 2014. It opened a branch in Yverdon-les-Bains on 4 April. This was followed by the new branch in Wallisellen-Richti on 2 October, which replaced the branch in the Einkaufszentrum Glatt shopping centre. The total number of branches rose to 66 in the reporting year. Since the expansion of the branch network began in 2008, 22 new branches have been opened. Migros Bank is planning to open another branch in Meyrin (GE) in 2015.
Sustainable development through low risk
For Migros Bank, sustainable trading means, above all, adopting a responsible, consistent and prudent risk policy. This approach not only supports the company's long-term success but is also in the interests of the lender and helps to prevent misallocation of macroeconomic resources.
Migros Bank finances the Engagement Migros development fund with a considerable annual contribution amounting to ten percent of the dividends paid to the owners.