Investment freeze dampens profits at Swiss Post's PostFinance
Swiss Post has said said a “difficult” interest rate situation has resulted in a lower than anticipated profit for the third quarter at its financial services division, PostFinance. Low interest rates have meant the postal bank has not made any major investments in months, which should mean only “modest” profit gains for the rest of this year, it said yesterday.
Nevertheless, the postal bank has seen some good growth in its retail services, taking on 39,000 new customers in the third quarter of the year – almost half the total number taken on in the year to date.
Around 73,000 new accounts were opened, while 143 new positions were created to serve the growing customer base.
The year to date has seen 82,000 new customers signing up for PostFinance accounts, bringing the total number of customers to 2.78m, with 176,000 new accounts opened during the three quarters.
Profits
In a briefing note issued ahead of the reporting of its full third-quarter results in early November, Swiss Post said in the nine months of the year to date, PostFinance made a profit of CHF 143m ($162m USD), 1.5% up on the same period last year.
The postal bank now manages CHF 90.5bn ($102.4bn USD) in customer assets.
However, Swiss Post said owing to low interest rates, PostFinance has not invested new funds in capital markets for several months, which will result in lower returns than had been expected.
The company said it therefore expects a “modest profit trend” in the final quarter of this year from its existing investments.
“The financial arm of Swiss Post currently has a good deal of liquidity with the Swiss National Bank and remains flexible in terms of further trends on the capital markets,” the company said in a statement yesterday.
