PostFinance posts record growth and solid results
PostFinance enjoyed a record year in growth in 2008, with more than 120,000 people deciding to do business with company.
PostFinance enjoyed a record year of growth in 2008, with more than 120,000 people deciding to do business with company.
The financial arm of Swiss Post also increased the number of customer accounts by 311,000, and the inflow of new money totalled CHF 5.9bn ($5bn) on average over the year. Profit amounts to around CHF 235m ($198.1m). Given the financial crisis and the necessary writedowns, the result has been described as solid.
The financial arm of Swiss Post acquired 120,000 new customers last year, as well as raising the number of accounts by 311,000. Compared with the record year 2007, this corresponds to a 55% increase in new customers (2007: 77,000) and growth of as much as 71% for accounts (2007: 182,000). Thanks to the considerable inflow of new money of CHF 5.9bn ($5bn) on average (2007: CHF 3.4 bn ($2.86bn)), customer deposits increased to CHF 49.3bn ($41.5bn) on average for the year. This corresponds to a 12.8% increase. At the end of 2008, customer deposits amounted to CHF 64.2bn ($54.1bn) as a result of the extraordinarily strong fourth quarter. Last year, PostFinance created 180 new full-time jobs in Switzerland.
The growth figures are supplemented by solid profit. PostFinance posted a result of around CHF 235m ($198m) in an extremely difficult market environment. Owing to writedowns of some CHF 179m ($150m), the profit is lower than in the record year 2007. The value of the equity portfolio had to be adjusted by CHF 59m ($49.7m) and that of fixed-interest investments by CHF 120m ($101.1m). Writedowns are book values that can have a positive impact on the result and the equity capital again when the financial markets recover.
PostFinance manages customer deposits of more than CHF 50bn ($42.1bn), which it invests on the international money and capital markets. It has pursued a risk-conscious investment strategy for years, mainly in bonds. Nevertheless, PostFinance has to take on higher risks than if it were able to invest customer deposits in its own Swiss loans. It is not permitted to do this at the moment. If it were allowed to grant its own mortgages and SME loans, PostFinance could diversify its financial investments more broadly and thus lower the risks for its owner – the Confederation. Moreover, it could revive competition in the SME segment with its own loans. Demand is high, especially at small companies, as the 25,000 consultations conducted by PostFinance in 2008 show. The opportunity should be seized to provide the Swiss economy with PostFinance customer deposits in the form of loans. The subject of PostFinance’s further development will probably be addressed in Parliament this year as part of the postal legislation reform.
