Comments on the 2023 accounts
We are very pleased to present the digital edition of our Comments on the 2023 accounts and Financial Report 2023. It marks a new and very important step in our commitment, and by publishing it, we are improving the transparency of our activities while underlining our focus on sustainable development.
Numbers at a glance
The Banque Cantonale of Fribourg increased its profit of 4,5 % to reach CHF 141,1 million.
Balance Sheet
Balance sheet
| 2023 | 2022 | Change as % | |
|---|---|---|---|
| Total assets | 27'960'449 | 27'324'676 | +2,3 |
| Advances to customers | 22'674'544 | 21'569'674 | +5,1 |
| Financial investments | 1'461'574 | 1'474'473 | -0,9 |
| Customer deposits | 16'507'088 | 16'086'917 | +2,6 |
| Equity (after repartition) | 2'499'146 | 2'360'650 | +5,9 |
In 2023, the balance sheet total rose by CHF 0.6 billion or 2.3% to CHF 28.0 billion.
This was primarily attributable to the strong growth in advances to customers of CHF 1.1 billion or 5.1%. Mortgage loans alone rose by CHF 0.7 billion to CHF 19 billion.
New credit limits totaled CHF 2.4 billion.
Customer deposits in all forms rose by CHF 0.4 billion to CHF 16.5 billion.
Cash Flow and equivalents
According to Article 13 et ff. of the Ordinance to the Federal Act on the Swiss National Bank (OBN) of March 18, 2004, the average monthly liquidity requirement for the reference period from December 20, 2023, to January 19, 2024, amounts to CHF 150.4 million. In December 2023, the daily average for that period shows a balance of CHF 3,520.8 million, which is CHF 3,370.3 million above the required amount.
In terms of liquidity reserves, the short-term liquidity ratio (LCR) based on the Basel III agreement is 226%, well above the regulatory limit of 100%.
Balance sheet overview 2013 – 2023
Assets
Receivables from banks, consisting mainly of short- and medium-term deposits placed with investment-grade banks, amounted to CHF 0.3 billion.
At the end of 2023, as at the end of 2022, the balance sheet contains no receivables from securities financing transactions (reverse repo).
Advances to customers, less value adjustments for default risks, increased by CHF 1.1 billion to CHF 22.7 billion (+5.1%).
For the first time, mortgage loans rose by CHF 0.7 billion to CHF 19.0 billion (+3.7%). Other amounts due from customers rose by CHF 0.4 billion (+13.1%) to CHF 3.7 billion.
Assets breakdown in %
The significant increase in advances to customers demonstrates BCF’s strong support for the economy of the Canton of Fribourg, particularly for SMEs and the real estate market, while practicing sound risk management.
Financial investments amounted to CHF 1.5 billion. They include securities acquired for investment purposes and as a cash reserve (over 98%), precious metals stocks and real estate held for resale.
Tangible fixed assets, consisting mainly of buildings used by the Bank, are recorded in the balance sheet at CHF 74.4 million, after depreciation.
Liabilities
On the liabilities side, total liabilities to banks remained stable at CHF 1.4 billion.
At the end of 2023, BCF had no receivables from securities financing transactions.
Customer deposits rose from CHF 355.4 million to CHF 16,1 billion.
Cash bonds gained in attractiveness and increased by CHF 64.8 million to CHF 358.3 million (+22.1%).
Total borrowings and loans from the central mortgage bond institution amounted to CHF 7.3 billion. In 2023, the Bank issued a new bond of CHF 150.0 million and subscribed to the various issues of the Pfandbriefzentrale Schweizer Kantonalbanken for a total amount of CHF 387.0 million. During the same period, CHF 264.0 million of the cantonal banks’ mortgage bonds were repaid and CHF 200.0 million of the bonds were repaid.
Provisions comprise amounts to hedge the Bank’s operational risks and value adjustments for default risks on off-balancesheet liabilities. They amounted to CHF 19.1 million, compared to CHF 10.2 million at the end of 2022.
The reserves for general banking risks, considered as equity capital, were increased by an allocation of CHF 52.0 million. They amount to CHF 719.0 million.
Liaibilities breakdown in %
Income Statement
For the 30th consecutive year, BCF achieved a record high. This marked increase enabled BCF to pay the canton CHF 75.0 million, including an extraordinary payment of CHF 19.5 million. Taking into account taxes, the canton, municipalities and parishes receive a total of CHF 85.8 million.
Equity capital was also increased by an allocation of CHF 52.0 million to reserves for general banking risks and CHF 87.0 million to the retained earnings reserve.
This confirms BCF’s strong market position by offering a local service and decisive and sustainable support to the Canton economy, while at the same time achieving very good operational profitability.
Breakdown of operating revenues in %
Operating income
Total operating income increased significantly by CHF 60.5 million to CHF 370.6 million (+19.5%).
Interest operations
The robust growth in advances to customers and the rise in interest rates are drivers of the Bank’s most important source of income. Net interest income rose significantly by CHF 68.1 million to CHF 322.4 million (+26.8%).
This result takes into account the change in value adjustments for default risks and interest losses amounting to CHF 28.5 million. The value adjustments set out in the FINMA Accounting Ordinance (OEPC) cover default risks for impaired loans/receivables and inherent default risks for non-impaired loans/ receivables.
The share of interest income represents 87% of the total operating income.
Commissions and service operations
The result of commission and service operations, as in the previous year, amounted to CHF 39.3 million (-1.9%).
Trading operations
Income from trading operations, which is mainly composed of income from foreign exchange and precious metals, amounted to CHF 10.9 million and is thus similar to 2022.
Other ordinary results
Ordinary expenses of CHF 5.4 million exceed ordinary income of CHF 3.4 million, resulting in an excess of CHF 2.0 million.
Operating expenses
Operating expenses increased by CHF 13.2 million to CHF 126.7 million (+11.6%). Much of this development can be explained by the tangible reinforcement of front office and defence lines.
The cost-to-income ratio after depreciation was 36.6%, confirming the Bank’s effectiveness.
Breakdown of operating expenses in %
Results
Value adjustments on participations, depreciation on tangible assets and intangible assets
Depreciation of tangible fixed assets and value adjustments on investments totaled CHF 10.2 million, compared with CHF 18.7 million, a decrease of CHF 8.4 million.
Changes in provisions and other value adjustments, losses
Changes in provisions, other value adjustments and losses amounted to CHF 9.4 million, compared with CHF 4.2 million in 2022.
Operating income
Operating income reached CHF 224.3 million, an increase of CHF 50.5 million (+29.1%). For the first time, it has crossed the barrier of CHF 200 million.
Taxes
The municipalities received CHF 4.5 million, the parishes CHF 0.5 million and the Canton CHF 5.8 million.
Profit for the year
After an allocation of CHF 52.0 million to the reserves for general banking risks, profit amounted to CHF 161.5 million, an increase of CHF 20.3 million or +14.4%.
Development of results 2013 – 2023
Breakdown of profit
At their last meeting, the Board of Directors has decided on the presented financial statements. It recommends the following appropriation of profit and distributions :
Breakdown of profit
| Profit for the year | 161'496'131 |
|---|---|
| Retained earnings | 650'099 |
| Profit shown on the balance sheet | 162'146'230 |
| Breakdown of profit | |
| Compensation for the State guarantee | 15'000'000 |
| Remuneration of the endowment capital | 60'000'000 |
| Allocation to reserve fund | 87'000'000 |
| Retained earnings | 146'230 |
Evolution of the annual payment (including taxes) to the State 2013 – 2023
The Bank expresses its gratitude to its loyal clientèle for their trust. It is committed to continuously improving the quality of its services.
On behalf of the Board of Directors: A. Geissbühler, Chairman
On behalf of the Executive Board: D. Wenger, Chairman