PostFinance quarterly results: 62,000 new customers and a solid profit

PostFinance has continued to expand at a brisk pace in 2008, lifting the number of customers by 62,000 and chalking up increases in both accounts and new money. At the end of the third quarter, profit stands at around CHF 200 million. Thanks to a cautious investment policy, impairment losses in the amount of CHF 95 million represent a milli-fraction of the overall investment portfolio.
PostFinance continues to grow apace. In the period to the end of September, Swiss Post’s financial arm attracted 62,000 new customers and saw an extraordinary surge in new account openings. The number of customer accounts rose by 222,000 to 3.56 million, an increase of 55 percent over the prior-year period (143,000 new accounts). In the space of a year, PostFinance has received CHF 4.8 billion in new money.
1 USD = 1.16529 CHF

PostFinance has continued to expand at a brisk pace in 2008, lifting the number of customers by 62,000 and chalking up increases in both accounts and new money. At the end of the third quarter, profit stands at around CHF 200 million. Thanks to a cautious investment policy, impairment losses in the amount of CHF 95 million represent a milli-fraction of the overall investment portfolio.
PostFinance continues to grow apace. In the period to the end of September, Swiss Post’s financial arm attracted 62,000 new customers and saw an extraordinary surge in new account openings. The number of customer accounts rose by 222,000 to 3.56 million, an increase of 55 percent over the prior-year period (143,000 new accounts). In the space of a year, PostFinance has received CHF 4.8 billion in new money.
A solid profit and milli-metric impairment losses
PostFinance generated a solid profit of around CHF 200 million during the first three quarters of the year amid difficult market conditions. This figure is down on the same period of 2007, a record year (CHF 247.7 million), due to impairment losses of CHF 95 million which PostFinance was forced to post on its financial assets. CHF 67 million of the write-downs relate to fixed-income investments and the remaining CHF 28 million to equity investments. Thanks to its risk-conscious investment strategy, the fall in value represents around 0.2 percent of the overall investment portfolio.
Broader spread of risk required
PostFinance invests its customer deposits in global money and capital markets, and in doing so pursues a risk-conscious investment strategy. It invests mainly in bonds (CHF 44 billion), which has proven to be a wise choice in the current environment. Amid “normal” market conditions, the probability of default on a broadly diversified bond portfolio is around 0.15 percent. The impairment losses of CHF 67 million are therefore in line with the normal level of risk. By comparison, the risk of default on a sound portfolio of Swiss mortgages is much lower. PostFinance’s portfolio would be more secure if it were able to offer mortgages independently. Current legislation does not allow it that investment option, however.
PostFinance is a secure and liquid financial institution
PostFinance will remain a secure financial institution going forward. With customer deposits of around CHF 48 billion, it is a liquid institution without any financing or capital-raising worries. It also has sufficient equity and a state guarantee. PostFinance expects further strong growth in the fourth quarter. Its year-end profit will depend on the further developments in the financial markets.