Slower mortgage growth at FKB
The growth in mortgage loans issued at Fribourg Cantonal Bank (FKB) has slowed further compared to previous years. In the first half of 2016, FKB also had to accept a decline in profits.
The persistent negative interest rate environment is also gradually taking its toll on the cantonal banks. As expected, FKB posted a business profit of CHF 82.9 million in the first six months. This is 2.2 percent less than in the same half of the previous year. Profit shrank by 5.3 percent to 68.5 million. Total income fell by 3.5 percent to 130 million.
By contrast, FKB's total assets climbed by a further 1.3 percent (or minus 0.3 billion in absolute terms) to 20.9 billion at the end of June. This was due to the 1.9 percent (plus 0.2 billion) increase in loans totaling 16.8 billion. This development is mainly due to the increase in mortgage loans of 0.2 billion or plus 1.8 percent to 13.7 billion, writes FKB in its half-year report.
The cantonal bank, which has 28 branches in the Fribourg region, saw its customer deposits fall by two percent to 12.2 billion. According to FKB, a "good growth" of over 50 million was achieved in savings deposits. (mr)
