Keystone-SDA
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June 13, 2024 – 2:20 p.m.
(Keystone-ATS) Valiant has unveiled its new financial objectives for the period 2025-2029, for which the retail bank will spend 38 million francs. The new roadmap includes a distribution rate “of at least 50%”.
By 2029, loans granted by the bank should experience growth of more than 2% – compared to 3% previously – while the increase in volumes for commission and service operations is expected at more than 5%, indicates Thursday Valiant in a presentation. The target for the core capital ratio is maintained at 15-17%.
The cost-to-revenue ratio is expected to be less than 55% and the return on equity is expected to be more than 7%, compared to the previous target of 6%. Valiant also undertakes to increase the dividend every year until 2029.
The sum of 38 million francs will be invested “roughly equally” across the five axes of the new strategy, CEO Ewald Burgener explained at a press conference on Thursday.
The Bernese banking group has just completed, a few months ahead of schedule, a vast plan to open branches “from Lake Geneva to Lake Constance”. In total, 21 new branches have been created throughout the national territory, including many in French-speaking Switzerland. The group has also created 185 advisor positions and now intends to “significantly” expand its customer base.
“Investments in expansion and digitalization have allowed us to lay the foundations for further growth and development of Valiant,” said Chairman of the Board of Directors Markus Gygax, quoted in a press release published on Thursday.
100 million invested since 2016
The new 2025-2029 strategy is based on the 100 million spent since 2016, assures the Bernese establishment, which says it wants to “increase profitability” without however setting quantified objectives in this area. Income diversification is also among Valiant’s ambitions until 2029. The offering for small and medium-sized businesses (SMEs) will be expanded, as will the white label products for third parties.
Valiant also says it wants to improve efficiency. The group has already achieved “substantial and recurring savings during the current strategic period”.
Valiant’s management finally seems determined to tackle its valuation problem, with the stock trading at a price lower than its theoretical value, says analyst Andreas von Arx of Baader Helvea. Until now, each franc used as basic capital for growth destroyed shareholder value. However, the efforts presented could prove insufficient.
At Zurich Cantonal Bank (ZKB), analyst Daniel Regli says this concern could be resolved thanks to the 7% return on equity (RoE) target. Mr. von Arx recalls for his part that Valiant missed the RoE target that he had set for himself over the last four years.
At 11:54 a.m., Valiant shares rose 0.2% to 102.60 francs, in an SPI down 0.45%.
