InCore Bank Annual Report 2022
Business Review
The main focus in the 2022 financial year was on continuing the restructuring measures started in recent years and building up the existing and newly developed business areas. The range of services was consolidated and streamlined, and further processes were stabilised. InCore Bank now operates in the following service areas: brokerage & global custody, digital asset banking, product structuring services, paying agent services, plug & bank technology platform (powered by SOBACO), back office business process outsourcing (BPO) and payment services.
In particular, the product structuring and paying agent services units were newly established and expanded. Strategic alliances and partnerships were formed in these areas. As a result, they will already become the elementary new earnings pillars for the 2023 financial year. Sales and earnings in the traditional brokerage & global custody and FX segments were up significantly. These increases were driven by the substantial growth in asset holdings in global custody, as well as growth in cash holdings, and are the result of professional treasury management. At CHF 4.26 million, trading activities increased considerably by 56.6% (previous year: CHF 2.72 million) due to the larger cash holdings.
In the areas of plug & bank technology platform and BPO (i.e. full outsourcing), InCore Bank benefited from the positive developments in its own customers’ business activities. These therefore remained the most profitable business units.
Despite significant market corrections, AUC increased by 8.5% to CHF 11.4 billion and sales increased by 15.2%. The result from commission business and services rose by a considerable 9.2% to CHF 22.76 million (previous year: CHF 20.89 million). With the passing on of negative interest rates and the change in interest rate policy in Q4 after many years, a profit of CHF 0.89 million was generated in the interest business (previous year: CHF 0.12 million).
In the area of digital asset banking for B2B customers, InCore Bank was able to acquire additional new banks and banking groups, thereby establishing itself as a major digital asset player in the Swiss market. Following the successful launch of the company’s own 24/7 online trading platform in 2021, InCore Bank applied for and received approval from FINMA in 2022 for a potential staking service and formed a partnership with SDX for Ethereum staking. In 2022, the most customer growth was recorded in the payment services segment, which has evolved into a key area for InCore Bank. Due to the new customers for this service, various processes had to be further adapted and expanded.
To cope with the substantial growth and the potential operational risks associated with it, the main focus was on continuing the restructuring that had already begun within the organisation. At the beginning of 2022, the bank announced the reinforcement of the management with Bruno Meyer as Head of Corporate Services. The Customer Relationship & Sales team at InCore Bank was
also completely restructured. At the end of 2022, it already had seven employees. In particular, the reorganisation enables a clear separation of 1st, 2nd and 3rd lines of defence and thereby supports the further expansion and development of the business activities of InCore Bank. The matrix structure introduced in 2021 has been retained to ensure clear product responsibility. The restructuring also included a clear allocation of markets.
With the expansion, personnel costs increased disproportionately by 25.0% to CHF 10.25 million (previous year: CHF 8.20 million). In 2022, the number of employees increased from 52 headcounts to 69. A further increase in employees is expected in 2023. To provide enough space for all employees, InCore Bank also completed a modern, largescale expansion of the office space.
This expansion and the growth in business also led to a corresponding increase in general and administrative expenses to CHF 12.77 million (previous year: CHF 11.49 million). For the financial year ended 2022, a net profit of CHF 3.75 million (previous year: CHF 3.12. million) was generated, which corresponds to an increase of 20.2%. This is an extremely encouraging development, especially
in view of the market correction and the restructuring of InCore Bank. It is the result of efforts to expand the market and optimise operations, which demonstrate the company’s promising evolution.
Outlook
In the coming financial year, InCore Bank will continue systematically expanding its business areas to support the company’s evolution into a full-service B2B transaction bank. In particular, InCore Bank intends to continue positioning itself as one of the leading banks in the market for digital asset banking and paying agent services.
The pipeline of new customers remains well-filled. InCore Bank continues to see a very high level of interest in the payment services segment. There are already various prospects for BPO and plug & bank technology platform services, as well as for brokerage & global custody. Due to the systematic expansion of customer relationship and sales activities, further growth in the number of new customers can be expected overall.
With the targeted expansion of InCore Bank and the continued focus on growth, we can continue to expect positive business development in the coming financial year.
Peter Haist
Chairman of the Board of Directors
Mark Dambacher
CEO
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InCore Bank Annual Report 2022 (EN)
InCore Bank Geschäftsbericht 2022 (DE)
