ZKB net profit down 11.2 pct on low interest rates

* H1 net profit 367 mln Sfr vs year-earlier 414 mln Sfr

* Net new money 5.3 bln Sfr

* Tier 1 solvency ratio 13.5 pct

* Sees FY results in line with 2009

ZURICH, Aug 20 (BestGrowthStock) – Zuercher Kantonalbank’s (ZKB)
first-half net profit fell 11.2 percent as low interest rates
narrowed profit margins in its core savings business, the
state-owned Swiss bank said on Friday.

ZKB [ZKB.UL], the largest of Switzerland’s part or wholly
state-owned cantonal banks, said its commission and fee business
grew steadily but income from trading fell as bond market
activity slackened.

Net profit fell to 367 million Swiss francs ($356 million)
against a year earlier 414 million.

ZKB said it attracted 5.3 billion Swiss francs of new client
money in the first half. It was one of the main beneficiaries of
client money gushing from Switzerland’s largest bank, UBS
(UBSN.VX: ) (UBS.N: ), in the crisis as they sought safety in
state-backed institutions.

UBS clients drained around 5 billion francs from its wealth
and asset management units in the second quarter, sharply down
from outflows of 18 billion francs in the first three months of
2010, prompting UBS to flag a return to client money inflows
this year. [ID:nLDE66Q0FS]

ZKB said it looked to the second half of 2010 with
confidence. “Despite markets susceptible to fluctuations, ZKB
expects the full-year result to be around the same level as the
previous year,” it said.

The cantonal bank’s Tier 1 ratio — a measure of a bank’s
financial strength — fell from 14.1 percent at the end of 2009
to a still healthy 13.5 percent, it said.
(Reporting by Jason Rhodes; Editing by David Holmes)
($1=1.031 Swiss Franc)

ZKB net profit down 11.2 pct on low interest rates