Zürcher Kantonalbank generates net profit of CHF 1,238 million in 2023 and distributes record dividend

Media release from 9 February 2024 7.00h (Ad hoc announcement pursuant to section 16 BX Swiss)

  • Operating income grows by 16.1% to CHF 3,194 million, mainly driven by interest operations
  • Operating result increases by 38.8% to CHF 1,469 million, allowing equity to be strengthened through the creation of CHF 225 million of reserves
  • Net profit increases by 17.0% to CHF 1,238 million as a result
  • Broad-based net inflow of new money totalling CHF 36,8 billion
  • Assets under management grow to CHF 450,8 billion
  • Highest profit distribution to date of CHF 528 million to Canton and municipalities
  • The bank is in a position to further improve its already strong capitalisation

Zürcher Kantonalbank delivered a 17.0% increase in net profit to CHF 1,238 million in the financial year 2023 compared to the previous year. This was driven primarily by an exceptionally strong result in interest operations, while the commission and fee business and the trading business also delivered a pleasing performance. The bank recorded a broad-based net inflow of new money and acquired a total of more than 28,000 new active clients. “As one of the most secure universal banks, we were able to achieve growth across the full breadth of the market in a challenging year. I wish to express my sincere gratitude to our clients for the high level of trust that they place in us,” stated Urs Baumann, CEO of Zürcher Kantonalbank. He added: “Considerable thanks also go to our more than 6,000 highly motivated employees, without whom this result could not have been achieved.”

Record distribution, Philanthropy Foundation and ZKB Banking

In view of the strong financial result, the Board of Directors has decided to distribute CHF 528 million – the highest profit distribution to date – to the Canton of Zurich and the municipalities. That corresponds to an increase of CHF 37 million compared to the previous year. A distribution of CHF 358 million will be made to the Canton, including CHF 18 million to cover the costs of the endowment capital, and the municipalities will receive CHF 170 million. In addition, the Canton will receive CHF 30 million by way of compensation for the state guarantee.

In line with its support mandate, Zürcher Kantonalbank founded the ZKB Philanthropy Foundation in 2023 with a one-off contribution of CHF 25 million as endowment capital. This umbrella foundation will be operational from summer 2024 and is designed to serve as an efficient and effective instrument to support clients in their philanthropic endeavours. It will initially fund five sub-foundations that are focused on the Canton of Zurich and will concentrate on the following topics: Health & Sport, Nature & Ecology, Society, Art & Culture, and Education & Research (further information is available here).

As an expression of thanks to its clients, Zürcher Kantonalbank launched its ZKB Banking offering on 1 January 2024 and has abolished the annual fees on private accounts and debit cards. This step will benefit both future and existing clients of the bank. The new everyday banking offering, which is available free of charge, has achieved a strong start: The number of new accounts opened in January 2024 was significantly higher than in the same period of the previous year. “Our strong financial result allows us to give something back – with the profit distribution to the Canton and the municipalities, with the ZKB Philanthropy Foundation that benefits the community, and with ZKB Banking that benefits our clients,” stated CEO Urs Baumann.

Interest rate reversal drives momentum in interest operations

Operating income grew by 16.1% to CHF 3,194 million in 2023, with all three pillars of Zürcher Kantonalbank’s diversified business model contributing to the result. The bank’s most important income stream delivered the largest contribution: Gross interest income rose by 31.5% to CHF 1,870 million. In the first half of 2023 in particular, the monetary policy of the Swiss National Bank (SNB) and the further rise in the yield curve created tailwinds. Savers benefited from these developments, as their savings are once again earning interest: The bank increased its savings rate three times in 2023.

The interest margin between the savings rate and the average mortgage rates in the mortgage portfolio did not widen since mortgage rates are slow to respond to changes in the interest rate environment. The bank benefitted in particular from the fact that the shift in client assets to investment opportunities offering higher interest rates occurred in the first half of the year more slowly than anticipated. In the second half of 2023, earnings momentum slowed due to catch-up effects. After taking account of CHF 49 million of value adjustments for default risks and losses from interest operations (previous year: CHF 18 million), net interest income rose by 29.8% to CHF 1,821 million.

Stable commission income and another strong trading result

Net commission and fee income rose by 1.5% to CHF 940 million in a challenging market environment. Commission income from securities trading and investment activities as well as commission income from other services increased, while commission income from lending activities and commission expense were almost flat compared to the previous year.

Trading income totalled CHF 415 million, an increase of 1.6% compared to the already strong result for the previous year. This was driven primarily by improved income from trading in foreign exchange, bank notes and precious metals, as well as from the trading of bonds, interest derivatives and credit derivatives. The bank also grew its income in the collateralised money market business. In contrast, in the equities and structured products business, income declined due to reduced volatility, which reached its lowest level since the pandemic.

A firm grip on costs and risks

Operating expenses rose by CHF 84 million, or 5.3%, to CHF 1,679 million, and thus increased at a much slower rate than income. As a result, the cost/income ratio decreased to 51.8%. Headcount rose by almost 5.5% to 5,539 full-time equivalents (FTE). Despite this increase, personnel expenses rose by only 2.4% or CHF 27 million, partly because variable compensation per employee did not increase year on year. General and administrative expenses rose by CHF 57 million, or 12.9%. Excluding the exceptional item of CHF 25 million for the establishment of the ZKB Philanthropy Foundation mentioned above, general and administrative expenses rose by 7%. The remaining general expense mainly comprises targeted investments in the future, such as in IT infrastructure and the further digitalisation of the bank. Zürcher Kantonalbank made increasing use of the specific knowhow of external specialists in this area. Higher costs were also incurred for the services of third-party providers and licenses.

The charge for value adjustments on participations as well as depreciation and amortisation of tangible fixed assets and intangible assets decreased by CHF 26 million year on year to CHF 75 million, mainly because goodwill from the Swisscanto acquisition has been fully written off since the first quarter of 2023. The line item “Changes to provisions and other value adjustments and losses” included a net release of CHF 28 million (2022: net release of CHF 2 million). This mainly reflects the release of provisions for default risks of CHF 27 million. Zürcher Kantonalbank’s risk profile remained stable throughout 2023 and was largely unchanged.

Record result allows for creation of reserves

The operating result rose to CHF 1,469 million, an increase of 38.8% compared to the previous year. This strong result enabled the bank to strengthen its equity and to additionally create CHF 225 million of reserves for general banking risks. The resulted in net profit of CHF 1,238 million, exceeding the previous year’s figure by CHF 180 million. Return on equity rose from 8.4% to 9.3%.

Growth in assets under management

The volume of assets under management grew by CHF 50.8 billion, or 12.7%, to CHF 450.8 billion. This partly reflects a pleasing, broad-based net inflow of new money totalling CHF 36.8 billion, corresponding to an increase of CHF 2.8 billion, or 8.4%, compared to the previous year. Positive market performance also contributed CHF 15.4 billion to this growth.

Leading role in Swiss capital markets business

In 2023, Zürcher Kantonalbank – which ranks a strong second in the Swiss capital market – advised on a total of 75 debt capital transactions by domestic issuers in the amount of CHF 6.5 billion. In the equity capital market for companies listed on SIX Swiss Exchange, Zürcher Kantonalbank ranked first in 2023, acting as lead manager for a total of 20 transactions. In addition, Zürcher Kantonalbank was lead manager for 38 bonds issued by the Central Mortgage Bond Institution of the Swiss Cantonal Banks (Pfandbriefzentrale der Schweizerischen Kantonalbanken) in the amount of CHF 8.5 billion. By supporting Swiss companies, cantons, cities and municipalities in their capital raising efforts, Zürcher Kantonalbank is performing an important economic function.

Mortgages exceed CHF 100 billion mark

The bank’s balance sheet grew by almost 1% to CHF 201.3 billion. On the assets side of the balance sheet, the mortgage portfolio increased by 4.2% and thus grew at a slightly slower rate than in the previous year. At CHF 100.9 billion (2022: CHF 96.8 billion), mortgage loans exceeded the CHF 100 billion mark for the first time. The bank achieved strong growth in mortgage volumes while maintaining the same high standards of quality in terms of borrowers and financed properties. On the liabilities side of the balance sheet, client deposits declined by 1.8%, or CHF 1.9 billion, to CHF 101.5 billion. This was mainly due to a shift in assets as well as strong competition in terms of interest rates.

Strengthened capital base

Zürcher Kantonalbank further strengthened its already strong capital base. The risk-weighted TLAC (Total Loss-Absorbing Capacity) Ratio rose from 22.5% to 26.8%, significantly exceeding the requirement of 18.7% for a systemically important bank. The TLAC Leverage Ratio also increased from 7.7% to 9.4%, clearly exceeding the requirement of 6.1%. This capital strength is based on three factors: In addition to retained earnings and the above-mentioned creation of reserves, the bank issued around CHF 1.5 billion of bail-in bonds for the first time in 2023. Reflecting its high liquidity reserves, the Liquidity Coverage Ratio (LCR) was 147% at end-2023 (previous year: 146%).

The ratings assigned to Zürcher Kantonalbank by the rating agencies Fitch, Moody’s and Standard & Poor‘s remain unchanged at AAA or Aaa. On a stand-alone basis (i.e. excluding any state support), Zürcher Kantonalbank ranks as one of the world’s most secure universal banks with a rating of aa- from Standard & Poor’s.


“2024 will be another challenging year with continued uncertainty in the macro environment. The exceptional interest income generated in 2023 will not be repeated. This means that operating income and the operating result for the current year will not match the outstanding results for 2023. We nevertheless expect to deliver a pleasing net profit for 2024,” stated CEO Urs Baumann.

Further Information

Key Figures Group (PDF, 86 KB)

Presentation media conference (PDF, 231 KB)