Pre-tax profit, on an IFRS accounting basis, fell 27 per cent to SFr513 million in the first half of 2022, while IFRS net profit attributable to shareholders fell 26 per cent to SFr451 million. Results were affected by a large rise in provisions and losses following the settlement of a legacy litigation case. On 30 June this year the Swiss bank resolved a claim by the liquidator of a Lithuanian corporation filed in Geneva in 2019, related to matters dating back more than 10 years. (The claim was for €335 million plus 5 per cent interest per annum since December 2011. About half of the settlement of €105 million was covered by provisions in place prior to 2022. The balance of SFr55 million was charged against the 2022 half-year financial results.)
It logged a 46 per cent year-on-year pre-tax profit of SFr467 million. Profit after taxes rose by 48 per cent to SFr384 million. Operating income rose by 21 per cent to SFr1.536 billion. Wealth and asset management business accounted for 80 per cent of the record income generated in 2021. Operating income in the business with asset management clients rose by 15 per cent to SFr594 million. The strongest income driver was the global business with wealth management clients, where operating income grew by 15 per cent to SFr634 million compared with 2020’s level.
The private banking arm logged a pre-tax profit of €463 million, versus a €15 million loss a year ago. Private bank net revenues were €2.2 billion, rising 7 per cent on a year earlier, or 4 per cent if adjusted for effects such as a cut in foregone revenues from a German court ruling and lower revenues linked to workout activities from its acquired Sal Oppenheim business. Within the German private bank, the group said revenues rose 11 per cent, although the gain was only 3 per cent if adjusted for the reduced impact of the BGH ruling. (This relates to the German Federal Court of Justice (BGH) April 2021 ruling on customer consent for pricing changes on current accounts and the non-recurrence of a negative prior-year impact from the sale of Postbank Systems AG.)
At the international private bank, revenues rose 2 per cent, or 6 per cent if adjusted for the effect on revenues of Sal Oppenheim workout activities. The German lender said its private bank logged net new business volumes of €11 billion in the quarter. This included net inflows of €7 billion, including inflows into investment products of €5 billion and new deposits of €2 billion, and net new client loans of €4 billion.
The wealth and personal banking arm – which includes its private banking arm – logged an adjusted pre-tax profit of $2.946 billion in the half-year to June 2022, a decline from $3.751 billion a year earlier. Operating costs at this business division stood at $7.411 billion, up from $7.277 billion a year before; net operating income was $10.349 billion, from $11.018 billion.
It reported profit attributable to shareholders of £2.5 billion for the first six months of 2022, down from £3.8 billion in the same period a year ago. The figure reflected a £600 million net of tax impact for over-issuance of securities in the US. Stripping out the over-issuance of securities, the UK-listed bank said that group income was £12.4 billion, rising 10 per cent year-on-year, driven by strong client activity in markets, recovery in both consumer, cards and payments (CC&P), and Barclays UK more than offsetting the impact of a weak fee pool in investment banking.
Total operating costs increased to £9.127 billion, from £7.3 billion in the same half-year period of 2021. Litigation and conduct charges rose sharply to £1.857 billion (H121: £176 million), it said. These significantly added to the cost figures.
Barclays doesn’t break out financial results for its wealth and investment business.
The private banking arm of UK-listed NatWest Group said its operating profit in the three months to end-June 2021 stood at £105 million, up from £82 million a year earlier. For the six-month period to the end of June, meanwhile, the profit figure was £187 million, rising from £146 million. The private bank’s cost/income ratio was 61.8 per cent at the end of the half-year period to 30 June, narrowing from 67.6 per cent a year before. NatWest said that its private bank pulled in £1.4 billion of net new money in H1 2022, down a touch from £1.6 billion a year before.
Profit, attributable to shareholders, was $1.873 billion for the six months to the end of June, from $1.718 billion a year before. Underlying pre-tax profit rose 5 per cent to $2.817 billion. Operating income rose 8 per cent year-on-year to $8.225 billion. Operating costs fell 2 per cent on a year ago to $5.328 billion. The group’s cost/income ratio was 64.8 per cent from 68.4 per cent a year earlier.
Announced pre-tax profits of £3.66 billion for the first six months of June, 6 per cent lower than the same period in 2021 but beat expectations. Statutory profit after tax reached £2.8 billion, compared with £3.9 billion the same time last year. This was due to the higher net income being more than offset by the non-repeat of the significant impairment release and the deferred tax credit in the first half of 2021. Underlying profit before impairment was up 34 per cent to £4.1 billion in the first half of 2022, driven by strong net income growth
Wealth management and consumer banking income fell by 8 per cent in 2021 from a year before to S$5.32 billion, with the impact of lower interest rates somewhat moderated by loan and deposit growth. For DBS overall, it achieved a record net profit of S$6.80 billion in 2021, rising 44 per cent from the previous year and restoring a trend of consecutively higher earnings disrupted by the pandemic in 2020.
Return on equity rose to 12.5 per cent from 9.1 per cent a year ago. “Strong business momentum” mitigated the full-period impact of interest rate cuts in March 2020 and “exceptional investment gains” the previous year, it said in a statement. Loan growth of 9 per cent was the highest in seven years, while fee income and Treasury Markets income rose to record levels. Fourth-quarter 2021 net profit was S$1.39 billion, a 37 per cent rise from a year ago.
Wealth management fees increased by 19 per cent to a record S$1.79 billion from higher sales of investment products and bancassurance. Assets under management in the wealth arm stood at S$291 billion at the end of 2021, up from S$264 billion a year before.
OCBC, the parent of Bank of Singapore reported that its group net profit for the first six months of 2022 rose 7 per cent from a year ago to S$2.84 billion, buoyed by rising interest rates, which helped margins. In the three months to 30 June, net profit was S$1.48 billion, surging 28 per cent year-on-year, and up 9 per cent from Q1 2022.
OCBC said its wealth management income, comprising income from insurance, private banking, premier private client, premier banking, asset management and stockbroking, grew 8 per cent in Q2 2022 from a year before to S$1.03 billion; this division made up 36 per cent of the group’s income in the second quarter. At June 30, 2022, assets under management in the wealth arm stood at S$250 billion, falling from S$254 billion a year ago as net new money inflows were more than offset by a drop in market valuations.