VP Bank’s profit halved in the first four months of 2024 compared to the same period last year, driven mainly by lower interest income.
After VP Bank was able to benefit from the positive rate environment in 2023, interest income fell further in the first four months of 2024, as it did in the second half of 2023, according to a statement. The reason for this is further shifts of customer funds from current account balances to higher interest fixed-term deposits and securities as a result of the higher rate environment.
This led to a 50 percent decrease in net profit for the first four months of 2024 compared to the same period last year. Operating expenses fell slightly while net new money inflow is currently annualized at 1 percent.
CEO Departure
Over a week ago, VP Bank announced that former CEO Paul Arni was leaving the firm with immediate effect. No substantial reasons were given at the time, although it was known that the bank had already failed to meet expectations in its 2023 results. Now, it has become clear why Arni's departure came about.
«VP Bank is optimally positioned for profitable growth,» said Stephan Zimmermann, VP Bank's chairman of the board of directors. «Together with the board of directors and the executive board, I am continuing to make every effort to exploit this potential by applying the necessary measures with respect to efficiency and growth.»
Accelerated Growth
According to the bank, the development and investment phase regarding «Strategy 2026» has now been completed. VP Bank's focus is now will be placed on implementing substantial efficiency measures to sustainably reduce the cost base and complexity.
A corresponding package of measures that strengthens and complements measures already in progress will be presented in the half-year results. In addition, efforts will be intensified to significantly accelerate growth in the bank's strategically relevant areas.
«Very Good Liquidity Situation»
Results for the first half of 2024 will be announced on August 20. Until then, no further information on business activities will be provided.
As of the end of April 2024, VP Bank Group reported an above-average capital base with a Tier 1 ratio of 24.7 percent. The bank said it is in a «very good liquidity situation» with a liquidity coverage ratio (LCR) of 263 percent.
