In the first half of 2025, Raiffeisen Group, Switzerland’s second-largest banking institution, demonstrated resilience by continuing its growth trajectory, despite a notable decline in net interest income. The bank reported profits of 555 million francs in the first six months, a sharp drop of 87 million francs or 13.6 percent compared to the same period last year. While still meeting analyst expectations, the decrease raises eyebrows in an economic landscape marked by shifting interest rates.
The primary factor behind this downturn lies in the drop in interest income, which fell by 107 million francs or 7.5 percent to 1.3 billion francs. This decline is largely attributed to the Swiss National Bank’s recent interest rate cuts, a decision that has sent ripples through the financial sector.
Despite the challenges in interest income, Raiffeisen saw success in its non-interest business segments. Income from commissions and service fees grew by 9.1 percent to reach 366 million francs, while trading income experienced an impressive 8.5 percent increase. The pension and investment sectors particularly thrived, with net new assets flowing into securities accounts totaling 2.1 billion francs, leading to an astonishing 30,000 new accounts. This surge marks a remarkable 50 percent growth year-on-year. Overall, the volume in securities accounts now stands at 55.3 billion francs, buoyed by discretionary mandates, which soared by 17 percent, alongside gains in pension and fund savings plans.
Raiffeisen also demonstrated solid performance in traditional lending, reporting a rise in customer loans by 6 billion francs to a total of 239 billion francs, of which 40 percent benefitted corporate clients. Their customer deposits also saw a significant uptick, increasing by 5.5 billion francs to reach 220 billion francs. Notably, the risk environment remains stable, with value adjustments constituting just 0.137 percent of receivables.
The bank’s mortgage receivables expanded by 5.5 billion francs, bringing the total to 226 billion francs, a growth of 2.5 percent. This development allowed Raiffeisen to bolster its market position, increasing its share to 18.3 percent. However, not all news is rosy; personnel and operating costs rose around 4 percent, resulting in a cost-income ratio of 59.2 percent. On a positive note, the bank’s capitalization remains robust, with a TLAC ratio of 27.6 percent and a leverage ratio of 8.6 percent, solidifying its strong financial standing.
Looking to the remainder of the year, the Group anticipates a modest improvement in net interest income during the second half, alongside augmented commission income compared to last year. Nevertheless, expectations remain tempered, as the final results are expected to fall short of last year’s performance.
How did net interest income impact Raiffeisen’s overall profit?
The decline in net interest income by 7.5 percent contributed significantly to the drop in Raiffeisen’s profits, which fell by 13.6 percent compared to last year.
What areas of Raiffeisen’s business showed growth despite the interest income decline?
Raiffeisen reported growth in its non-interest business areas, particularly in commissions and services, which rose by 9.1 percent, and trading income, which increased by 8.5 percent.
What is Raiffeisen’s forecast for the second half of 2025?
The Group expects a slight recovery in net interest income and higher commission income, although overall results are anticipated to remain below those of the previous year.
