Berner Kantonalbank AG: history, ownership, mission, how it works & makes money

A Brief History of Berner Kantonalbank AG

Founded in 1834, Berner Kantonalbank AG (BEKB) has established itself as a key player in the Swiss banking sector, particularly focusing on serving the region of Bern. It is a cantonal bank, which means it is owned by the Canton of Bern and enjoys certain advantages, including a state guarantee.

As of 2023, BEKB operates with total assets amounting to approximately CHF 38.4 billion. The bank's strong financial position is highlighted by a Tier 1 capital ratio of 16.2%, exceeding the regulatory minimum requirements. This solid capital base provides the bank with the resilience to withstand market fluctuations.

In terms of profitability, BEKB reported a net profit of CHF 149 million for the fiscal year ending December 31, 2022, representing a growth of 4% compared to the previous year. This increase can be attributed to a rise in net interest income, which reached CHF 307 million.

Throughout its operational history, Berner Kantonalbank has evolved to meet the changing needs of its customers. The bank offers a wide array of services, including retail banking, corporate banking, and asset management. It has consistently invested in technology, which has allowed for the enhancement of customer experience through digital banking services.

BEKB is recognized for its commitment to sustainability, having launched several initiatives aimed at promoting environmental responsibility. The bank's mortgage portfolio includes a significant portion of energy-efficient properties, reflecting its focus on ecological sustainability.

In recent years, Berner Kantonalbank has focused on expanding its digital offerings and enhancing the user experience via mobile applications and online platforms. This strategic direction is aligned with a broader trend in the financial services industry, where consumer preferences have shifted toward digital banking solutions.

As of mid-2023, BEKB has around 850 employees and serves approximately 200,000 customers. The bank maintains a strong local presence, with 32 branches across the Canton of Bern, each offering personalized banking services catered to local communities.

In terms of market presence, BEKB holds a significant share of the mortgage lending market in the Canton of Bern, with a market share of approximately 28%. This extensive portfolio supports the bank's steady revenue streams while also fostering community development through local housing initiatives.

As a key entity in the regional banking landscape, Berner Kantonalbank AG continues to be a trusted financial partner, leveraging its historical roots to drive sustainable growth and innovation in the banking industry.

A Who Owns Berner Kantonalbank AG

Berner Kantonalbank AG (BEKB) is a public sector bank based in the canton of Bern, Switzerland. The ownership structure of Berner Kantonalbank is primarily governmental, with the majority stake held by the Canton of Bern. The ownership distribution is as follows:

As a cantonal bank, BEKB operates under a special legal framework that governs its relationship with the state. The bank is fully owned by the public sector, and its mission includes reinforcing regional economic development and providing banking services to its residents.

Before 2005, BEKB had a different structure including private shareholders, but it transitioned to full public ownership in that year. As of the latest financial reports, the bank's total assets amount to approximately CHF 23 billion as of 2022.

In terms of governance, the board of directors includes representatives from the Canton of Bern, further emphasizing the bank’s public ownership and alignment with regional interests.

As of the fiscal year-end 2022, BEKB reported net profit figures of approximately CHF 49 million, demonstrating its stable financial performance even amid fluctuating market conditions.

Regarding market position, BEKB is considered one of the largest cantonal banks in Switzerland, underscoring its importance in the local financial landscape. The bank's services cover retail banking, corporate finance, and wealth management, contributing significantly to the region's economic stability.

In summary, Berner Kantonalbank AG is wholly owned by the Canton of Bern and operates with a public mandate, focusing on the banking needs of its community. Its financial metrics reflect a strong performance that aligns with its governmental support and responsibilities.

Berner Kantonalbank AG Mission Statement

Berner Kantonalbank AG (BEKB), a prominent player in the Swiss banking sector, operates with a clear mission to support its customers and promote the economic and social development of the region. The bank's mission statement emphasizes commitment to excellent customer service, sustainable finance, and local engagement.

BEKB's mission statement highlights the following core principles:

• Providing a comprehensive range of financial services tailored to individual and business needs.
• Actively contributing to the development of the Bernese region.
• Ensuring financial sustainability and stability for long-term growth.
• Upholding high ethical standards and transparency in all operations.
• Fostering innovation through digitalization of banking services.

In 2022, the bank reported a net profit of CHF 151 million, showcasing a year-on-year increase of 8%. Total assets reached approximately CHF 35.5 billion, indicating strong growth in its asset base.

BEKB's focus on sustainable finance is evident from its portfolio, which includes a commitment to green bonds and responsible lending practices. As of mid-2023, the bank had issued over CHF 1 billion in green bonds, aimed at financing environmentally sustainable projects.

Moreover, the bank emphasizes digital innovation. In 2022, BEKB introduced new digital services and saw a 20% increase in the number of transactions conducted through its mobile banking platform, reflecting a growing trend in preference for digital solutions among customers.

The bank also engages in various community initiatives. In 2022, it invested over CHF 2 million into local projects aimed at promoting social welfare and environmental protection, reinforcing its role as a socially responsible institution.

Berner Kantonalbank AG's mission is not just a statement but a commitment to fostering economic stability, environmental sustainability, and social responsibility, paving the way for long-term success in both the banking sector and the community it serves.

How Berner Kantonalbank AG Works

Berner Kantonalbank AG (BEKB) plays a pivotal role in the financial landscape of the Bern region in Switzerland, operating primarily as a universal bank. Established in 1834, it offers a range of financial services that include retail banking, corporate banking, and wealth management. As of December 31, 2022, BEKB reported total assets amounting to CHF 36.4 billion.

In the retail banking segment, BEKB serves individual clients with products like savings accounts, mortgage loans, and personal loans. The total volume of residential mortgages reached CHF 26.5 billion, representing a substantial component of its asset base. The bank’s net interest income stood at CHF 225 million for the fiscal year 2022, reflecting the interest earned from its lending operations after subtracting interest paid on deposits.

Corporate banking at BEKB focuses on small and medium-sized enterprises (SMEs) and large corporations in Switzerland. The bank offers services such as business loans, cash management, and trade finance. The total credit volume provided to corporate clients amounted to CHF 6.3 billion.

Moreover, Berner Kantonalbank benefits from a strong capital base with a Tier 1 capital ratio of 19.2%, exceeding the regulatory minimum requirements. The bank's focus on risk management and its conservative lending policies further solidify its financial stability.

In terms of customer base, BEKB serves approximately 250,000 clients, including private individuals and businesses, which contributes to its strong market position in the Bern region. The bank's digital banking platform continues to enhance customer engagement, with a reported increase in online transactions by 15% in 2022 compared to the previous year.

In summary, Berner Kantonalbank AG operates as a universal bank, catering to a wide range of clients with diversified financial services while maintaining a strong focus on sustainability and community support. The bank continues to evolve its offerings to meet the changing needs of its customers in an increasingly digital world.

How Berner Kantonalbank AG Makes Money

Berner Kantonalbank AG (BEKB) primarily generates revenue through various banking services, which include interest income, fees for services, and asset management. As of 2022, the bank reported a net profit of CHF 138 million, representing an increase of 5.1% from the previous year.

One of the main sources of income is interest income, which stems from loans granted to clients. In 2022, BEKB recorded interest income of approximately CHF 297 million. This income was supported by the bank's total outstanding loans amounting to around CHF 17 billion.

In addition to interest income, BEKB earns significant revenue through fees and commissions. In 2022, fee and commission income was reported at CHF 63 million, a slight increase compared to CHF 61 million in 2021. This income includes transaction fees, advisory fees, and asset management fees.

BEKB is also involved in investment operations, which play a crucial role in generating income. The bank's investment portfolio had a market value of about CHF 10.2 billion as of December 2022. Investment income contributed approximately CHF 54 million to total earnings.

The following table summarizes the key financial metrics from BEKB's income statement for the year 2022:

Moreover, BEKB capitalizes on its strong position in the local market. With over 60 branches and a robust digital banking platform, the bank caters to both retail and corporate clients, thereby diversifying its revenue streams.

Other notable revenue sources include mortgage lending, which remains a significant component of its loan portfolio, accounting for approximately CHF 12 billion of outstanding loans. The bank's strategy focuses on maintaining a healthy interest margin while managing operational costs, which were reported at CHF 157 million in 2022.

The overall return on equity (ROE) for BEKB in 2022 stood at 9.6%, indicating efficient utilization of equity capital in generating profits. The bank's tier 1 capital ratio, a measure of financial strength, was reported at 16.8%, significantly above the regulatory minimum.