ZKB 2009 profit up 50 pct on trading ops recovery

ZURICH, Feb 12 (BestGrowthStock) – State-owned Swiss bank Zuercher Kantonalbanksaid
2009 profit rose almost 50 percent as a turnaround in trading operations and
steady growth in income from fees and commissions outweighed a sharp fall in its
traditional interest business.

Net income rose 49.4 percent to 751 million Swiss francs ($701 million) and
the bank said on Friday it would raise payouts to canton and local authorities
to 330 million francs.

Switzerland’s cantonal banks have benefited from worried clients moving
their cash from UBS (UBSN.VX: ) (UBS.N: ) during the financial crisis as they sought
security in state-backed institutions.

Inflows to ZKB peaked during the financial crisis as clients pulled money
from troubled banks without state backing such as UBS, slowing somewhat in the
second half of 2009, ZKB CEO Martin Scholl said.

But Scholl said he did not expect the bank would give up its gains: “We can
now show that money which came to us during the crisis is here to stay,” Scholl

The leap in ZKB’s profits was also spurred by a sharp turnaround in equity
trading operations, which earned 56 million francs after losing 211 million a
year earlier.

This trend was in line with larger, listed banks, such as local rival Credit
Suisse (CSGN.VX: ), Barclays (BARC.L: ) of the UK and JPMorgan (JPM.N: ) and Goldman
Sachs (GS.N: ) in the United States, which have also all recently reported a pick
up in trading numbers in 2009 after a difficult 2008.

ZKB’s results wrap up a week that saw Credit Suisse hitting an upbeat tone
on its full-year results, contrasting with a bleaker outlook for UBS, which is
still battling with client outflows.[ID:nLDE61926D] [ID:nLDE61802M]

ZKB also saw solid growth in its fees and commissions business, where income
was up 8 percent to 508 million francs.

The bank said assets in its investment business rose to 134 billion francs,
making it Switzerland’s seventh-largest banking institution in terms of assets
under management. Data from funds intelligence company Lipper show inflows into
the bank’s gold exchange traded fund were strong through most of the year.

ZKB said its Tier 1 ratio — a measure of a bank’s financial strength — was
14.1 percent, well ahead of the regulatory minimum. This gave the bank room for
strategic expansion, Scholl said, but added the bank had no specific takeover
($1=1.072 Swiss Franc)

Investing Basics

(Reporting by Martin de Sa’Pinto and Albert Schmieder; Editing by Rupert

CORRECTED – ZKB 2009 profit up 50 pct on trading ops recovery