Annual
— Report
2024
Zürcher Kantonalbank is the second-largest universal
bank and the largest cantonal bank in Switzerland.
We have successfully positioned ourselves as a univer-
sal bank with a regional base as well as a domestic
and international network. With a market penetration
of 50 percent, we are the number one for retail and
corporate clients in the Greater Zurich Area. We fulfil
our increased economic responsibility throughout
Switzerland and are a strong partner for large com-
panies as well as private and institutional investors.
We are one of the safest banks in the world – as con-
firmed by top marks from leading rating agencies.
Zürcher Kantonalbank is an autonomous public-law
institution of the Canton of Zurich and benefits
from a state guarantee. Through our public service
mandate, we are committed to the well-being of
society and the environment – and have been for over
150 years. We uphold our values: responsible, in
spiring and passionate. Our vision is “Close to you”.
Key figures (group)
2024
2023
Change in %
›Key figures
in %
Return on equity (RoE)
8.0
9.3
Cost income ratio (CIR) 1
55.0
51.8
Common equity tier 1 ratio (CET1) (going-concern) 2
16.8
17.4
Risk-based capital ratio (going-concern) 2
17.9
18.7
Risk-based capital ratio (gone-concern) 2
7.8
8.0
Risk-based TLAC ratio 2 / 3
25.7
26.8
Leverage ratio (going-concern) 2
6.8
6.6
Leverage ratio (gone-concern) 2
3.0
2.8
TLAC Leverage Ratio 2 / 3
9.8
9.4
Liquidity coverage ratio (LCR) 4
142
147
Net stable funding ratio (NSFR)
116
117
›Income statement
in CHF million
Operating income
3,088
3,194
– 3.3
Operating result
1,277
1,469
– 13.1
Changes in reserves for general banking risks
–
– 225
– 100.0
Consolidated profit before taxes
1,289
1,246
3.4
Consolidated profit
1,120
1,2385
– 9.5
›Balance sheet
in CHF million
Total assets
202,594
201,259
0.7
Mortgage loans
106,600
100,874
5.7
Amounts due in respect of customer deposits
106,980
101,452
5.4
Equity
14,862
14,268
4.2
›Participation of the canton and
municipalities
in CHF million
Dividend to cover actual costs to canton
21
18
17.4
Dividend for the canton
184
340
– 45.8
Dividend for municipalities
170
170
0.0
OECD minimum tax to the canton
156
–
–
Compensation for state guarantee
31
30
3.6
Total participation canton and municipalities
562
558
0.7
›Additional payments
in CHF million
Payments from public service mandate
140
1616
– 13.2
›Further information
in CHF million
Total customers’ assets
(managed assets and assets with custody services)
520,811
450,789
15.5
Total managed assets 7
457,276
395,786
15.5
– of which, net new money inflow/outflow (NNM) 7
29,817
27,419
8.7
Headcount after adjustment for part-time employees,
as at the reporting date
number
5,779
5,539
4.3
Branches 8
number
53
53
0.0
1
Calculation: Cost / income ratio (excl. changes in default-related value
adjustments and losses from interest operations).
2
In accordance with the provisions for systemically important banks.
3
TLAC = Total Loss Absorbing Capacity
4
Simple average of the closing values on the business days during
the quarter under review.
5
Tax expenses, taking into account the OECD minimum taxation
already introduced in 2023, would have amounted to CHF 196 million,
consequently would have reduced the consolidated profit to
CHF 1,050 million.
6
Includes CHF 25 million for the establishment of the ZKB Philanthropy
Foundation.
7
In the 2024 reporting year, Zürcher Kantonalbank clarified the criteria
for distinguishing between assets under management and assets
with custody services. The disclosure was refined accordingly and the
comparative figures adjusted. As at 31 December 2023, this led to
a reclassification from assets under management to assets with custody
services in the amount of CHF 55,003 million and to a reduction in net
new money by CHF 9,354 million to CHF 27,419 million.
8
Of which 51 branches (previous year: 51) of Zürcher Kantonalbank in
Zurich as well as 2 branches (previous year: 2) of the subsidiary Zürcher
Kantonalbank Österreich AG in Salzburg and Vienna.
Group structure
Zürcher
Kantonalbank
Finance
(Guernsey) Ltd.
Zürcher
Kantonalbank
Österreich AG
ZKB Securities
(UK) Ltd.
Complementa
AG
Zürcher Kantonalbank
(parent company)
Swisscanto
Holding Ltd.
Swisscanto Fund
Management
Company Ltd.
Swisscanto Asset
Management
International SA
Parent company and significant group companies
Representative offices:
São Paulo, Beijing, Mumbai, Singapore
(each 2 *)
Are managed as part of the parent company.
Disclosures on companies in which the bank holds
a permanent direct or indirect significant partici-
pation can be found in the annual report, Note 7
to the consolidated financial statements.
4 *
116 *
7 *
105 *
16 *
* Number of employees
60 *
6,291*
Close
to you.
Zürcher Kantonalbank
We are
more
than just
a bank.
2
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
We do
more for
everyone.
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
3
We’re the bank of the people of Zurich. Since our
foundation we have been committed to our public
service mandate, which today consists of the
service, support and sustainability sub-mandates.
Our purpose is to contribute to the canton’s ful
filment of its economic, social and ecological tasks
and thus to support sustainable development.
This gives us a special connection with the people
of Zurich, the canton’s economy and the envir-
onment. The public service mandate is our unique
selling point – and we are proud of it.
Excerpt from the Cantonal Banking Act
on Zürcher Kantonalbank
§ 2 Purpose
1 The bank’s purpose is to contribute to the
canton’s fulfilment of its economic, social and
ecological tasks and thus to support sustainable
development.
2 It satisfies investment and financing needs
through a business policy geared towards con-
tinuity. In doing so, it pays particular attention
to the concerns of small and medium-sized enter-
prises, employees, agriculture and public authori-
ties. It promotes home ownership, affordable
housing and net-zero greenhouse gas emissions.
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
4
› Service mandate
› Support mandate
› Sustainability mandate
We supply the population and the economy
with the services of a universal bank.
We provide our clients with access to our finan-
cial services across all channels in both the physical and
digital worlds. We have the densest branch network in
the Canton of Zurich and cover the basic needs of our
clients at low cost. We are characterised by the high
quality of our financial services. Stability and security
are central pillars of Zürcher Kantonalbank. We offer
We contribute to the economic strength and
quality of life in the Canton of Zurich.
In line with our public service mandate, we support
the Canton of Zurich in fulfilling its economic and social
tasks. We are one of the largest providers of vocational
training and are a major employer in the canton. We are
one of the largest promoters of start-ups in Switzerland.
We support the innovation and educational institutes in
the Canton of Zurich. Our contribution to strengthening
We pursue a business policy geared towards
sustainability and continuity.
Sustainability is an integral component of our
business model. Under our group strategy, we aim to
reconcile successful economic activity with responsibility
for the environment and society in a lasting manner.
When fulfilling our public service mandate, we, as a uni-
versal bank, observe the principles of sustainability and
the recognised rules of risk management. We promote
the achievement of greenhouse gas neutrality. We are
guided by the Sustainable Development Goals (SDGs)
services primarily in the areas of payment transactions,
saving, investing, financing and advice. This advice cov-
ers topics such as retirement planning, financial planning
and succession planning. When rendering these services,
we pay particular attention to the concerns of small and
medium-sized enterprises, employees, agriculture and
public authorities. We also promote home ownership
and affordable housing.
the canton’s competitiveness is an important pillar of our
public service mandate. With our sponsorship commit-
ments and awards, we contribute to the quality of life
in the Canton of Zurich, to the protection of our natural
resources and to the preservation of social cohesion. It
only goes to follow that we advocate for nature and the
environment, as well as for mobility, cultural diversity,
equal opportunity, access to financial knowledge, edu-
cation, innovation and entrepreneurship.
of the United Nations, the Paris Climate Agreement and
the goal to achieve greenhouse gas neutrality by 2050.
In terms of operational sustainability, we focus on em-
ployee satisfaction, diversity, equity & inclusion and be-
ing a role model in our own operations. In sustainable
banking business we introduced, for example, the ZKB
sustainability standard in the investment business. Our
net-zero transition support includes our contribution to
achieving greenhouse gas neutrality, such as advisory
services for SMEs.
Areas of impact of our public service mandate: p. 6–7
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
5
Areas of impact of our
public service mandate
Support
mandate
Sustainability
mandate
Service
mandate
Net-zero
transition funding
Operational
sustainability
Sustainable
banking
Contribution to
the competitiveness
of the Canton
of Zurich
Contribution to
the quality of life
in the Canton
of Zurich
Stability and
reputation of
Zürcher
Kantonalbank
Physical and
digital access
to financial
services
Quality of
the financial
services
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
6
› What we do
› What we are
committed to
– Densest branch network in the Canton of Zurich and
physical cash supply
– High client satisfaction with our digital offerings
– High level of employee commitment
– Verified equal pay
– Diversity, equity & inclusion goals and internal networks
– Net-zero target in the bank’s operations by 2030
– ZKB sustainability standard in the investment business
– Free everyday banking in the branches and online
– One of the safest universal banks in the world
– Continuity in dividend policy
– Implementation of our net-zero commitments (Net-Zero
Banking Alliance and Net Zero Asset Managers Initiative)
– One of the most important employers and training
centres in the Canton of Zurich
– Promotion of the innovation and educational landscape
in the Canton of Zurich
– One of the largest start-up financiers in Switzerland
– Promotion of financial literacy for children, young people
and families
– Over 400 sponsorship commitments in business,
society and the environment
– ZKB Philanthropy Foundation
– Corporate volunteering programme and support for
our employees taking part in public offices, trade asso-
ciations and expert activities
Physical and digital access
to financial services
Quality of financial services
Stability and reputation of
Zürcher Kantonalbank
Contribution to the com
petitiveness of the Canton
of Zurich
Contribution to the quality
of life in the Canton of
Zurich
Operational sustainability
Sustainable banking
Net-zero transition funding
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
7
For over 150 years
Zürcher Kantonalbank opened its counters for the first
time on 15 February 1870 at Paradeplatz. This was
preceded by fierce political controversy, in which the
population and the Cantonal Parliament finally prevailed
against the government and enshrined the establish-
ment of a cantonal bank in the new Zurich constitution.
It was a victory for common sense, as the economic need
was clearly recognised: small and medium-sized enter-
prises as well as the broad mass of the Zurich population
were inadequately supplied with banking services.
Tradespeople and farmers in particular found it difficult
to obtain affordable loans. The establishment of a can-
tonal bank was able to close this service gap.
Since it started business, Zürcher Kantonalbank
has always remained true to its claim of being the bank
for everyone in Zurich. In a partnership-based relation-
ship, the Canton of Zurich and its bank have strength-
ened each other’s development. This connection has
contributed to Zurich’s development from a canton char-
acterised by small-scale industry and agriculture to one
of the most economically successful regions in the world
with prosperity for the entire population. Zürcher Kan-
tonalbank has now been a part of Zurich’s success sto-
ry for over 150 years. It is passionately committed to the
well-being of its clients and provides important impetus
throughout the canton in terms of both business and
sponsorship. It has a proven corporate strategy, a vibrant
culture, as well as structures and processes that are cap-
able of change. Our corporate culture is based on values
that are also associated with the Canton of Zurich, such
as consistency, reliability, predictability, performance ori-
entation and a long-term approach, which we demand
in our mission statement and which are practised by all
employees.
zkb.ch/geschichte (available only in German)
1869
A peaceful revolution
The founding of Zürcher Kantonalbank was a conse-
quence of the new cantonal constitution of 1869. The
bank was to offer affordable loans to agricultural and
commercial businesses and to meet the savings and in-
vestment needs of broad segments of the population.
1870–1914
Storm and stress
Zürcher Kantonalbank opened its first counter on
15 February 1870. After initial challenges, the bank
quickly recovered and built up a strong presence.
1914–1945
Solid as a rock
Despite setbacks caused by war and crises between
1914 and 1945, Zürcher Kantonalbank remained a reli-
able pillar of the canton’s economy. It also survived the
Great Depression of the early 1930s relatively unscathed
thanks to its focus on the domestic market.
1945–1990
Impressive growth
After the Second World War, Zürcher Kantonalbank expe-
rienced a golden age in the wake of the Western European
economic upswing, growing from around 700 to over
4,000 employees and increasing its total assets from CHF
1.6 billion to CHF 44.4 billion.
1990–today
Stability through diversification
After the real estate crisis of the 1990s, Zürcher Kanto
nalbank reorganised itself strategically by strengthening
its commission, services and trading business. The diver-
sification strategy proved to be a stabilising factor and
pillar for both the bank and the canton.
Zürcher Kantonalbank Annual Report 2024
› More than just a bank
8
More than just a bank
Annual Report
Letter on the 2024 Financial Year
Management Report
Bank of the People of Zurich
Public service mandate
Developments from the public service mandate
Group Mission Statement and Strategy
Group mission statement
Group strategy
Business Environment and Risk Assessment
Overall economy
Switzerland as a banking centre
Regulation
Risk assessment
Banking Services for the Population
and Companies
Client proximity
Core segments individuals clients
Core SME segments
Specialised segments
Producers
Employees
Performance & development
Employer commitment
Business Development
Corporate Governance
Internal organisation
Activity reports
Compensation Report
Foreword by the Board of Directors to the Compensation Report
Competencies and compensation policy
Compensation groups
Components of compensation
Compensation in 2024
Financial Report
Consolidated financial statements
Notes to the consolidated financial statements
Financial statements of the parent company
Notes to the annual financial statements of the parent company
Appendix
Glossary
Locations
Contacts
2
11
12
23
23
24
25
27
28
28
31
31
32
32
34
36
36
39
41
43
47
52
53
54
57
63
69
74
87
90
92
94
95
97
101
103
109
185
190
210
210
215
218
Contents
About this report
This annual report comprises the management
report, the corporate governance report, the compen-
sation report and the financial statements of the Zürcher
Kantonalbank group and its parent company.
The digital version of this annual report is avail-
able at zkb.ch/annualreport.
Zürcher Kantonalbank Annual Report 2024
› About this report
10
Zürcher Kantonalbank
Annual
— Report
2024
11
Zürcher Kantonalbank Annual Report 2024
Letter on the 2024 Financial Year
Detailed biographies can be found in the
corporate governance section: p. 80 ff
Urs Baumann, CEO, and Dr Jörg Müller-Ganz, Chairman (f. l.)
12
Zürcher Kantonalbank Annual Report 2024
› Foreword
In a challenging environment, Zürcher Kantonalbank in
2024 was once again able to generate very pleasing
annual results.
The geopolitical situation remains tense, which is
why the economic environment remains challenging.
Wars are taking place on our doorstep, trouble spots are
smouldering, disruptive political conditions are on the
rise and we are also facing unresolved challenges in vari-
ous areas of domestic politics. The order situation at
some industrial companies is subdued. A solid founda-
tion looks different.
The Swiss banking centre is facing major changes
too. The stricter regulation of all banks following the
merger of the two big banks is likely to change the
framework conditions for all market participants. We
advocate regulation with a sense of proportion that does
justice to the competitive and resilient Swiss financial
centre while also assuming social and economic respon-
sibility. Our financial centre with its more than 200 banks
is diversified, strong and stable. It is an important pillar
for our country and our economy. Regulation should
therefore be based on simple principles and be propor-
tionate to the complexity, size and risk profile of the
various banks.
Strategy for responsible growth to continue
unchanged
Zürcher Kantonalbank’s position within the bank-
ing centre has also become stronger as a result of recent
developments. For many client needs, we are the only
Swiss alternative to the big bank. Last year we fulfilled
this growing importance and responsibility as a partner
with a full range of services for private individuals and
companies of all sizes.
Dear residents
of Zurich
Dear clients,
Dear staff
13
Zürcher Kantonalbank Annual Report 2024
› Foreword
Our tried and tested strategy remains unchanged. We
aim to expand our leadership position in the Greater
Zurich Area, strengthen our national position and utilise
international opportunities.
We are traditionally very strong in our core seg-
ments for private individuals and SMEs in the Greater
Zurich Area and have a market penetration of 50 percent.
Our product range is very competitive. With ZKB Banking,
we have been offering free everyday banking for every-
one for a year now. We also have other extras for people
under the age of 30. Our product range is fully compre-
hensive in line with changing client requirements: on the
one hand with the densest network of 51 branches,
which we are modernising extensively, and on the other
hand through our popular digital channels.
We expanded our specialised segments last year.
Private Banking, Asset Management and Corporate
Banking are on course for growth because we sharp-
ened our positioning in these areas, launched new prod-
ucts and intensified our sales activities.
The universal bank model continues to prove its
worth. In 2024 we generated a consolidated profit be-
fore taxes totalling CHF 1.289 billion. The lower net in-
terest income compared to 2023, which we expected,
was offset by a strong investment business, with income
diversification paying off once again. Taking into account
the OECD minimum tax, the canton will receive a divi-
dend of CHF 361 million (2023: CHF 358 million). In
addition, there is the compensation for the state guar-
antee of CHF 31 million (2023: CHF 30 million). The
distribution to the municipalities amounts to CHF 170
million (2023: CHF 170 million). Overall, the canton and
municipalities will participate in the profit of Zürcher
Kantonalbank with CHF 562 million (2023: CHF 558 mil-
lion) – over the last ten years with over CHF 4 billion. We
are also allocating CHF 740 million of our profit to eq-
uity, thereby strengthening our stability. With a total
loss-absorbing capacity on our risk-based capital ratio
of 25.7 percent, we clearly exceed the regulatory re-
quirements. Zürcher Kantonalbank remains excellently
capitalised.
The good annual results are based on a high level
of client satisfaction. The client satisfaction survey we
conducted in the reporting year once again showed that
client loyalty and service quality are consistently rated
highly in all segments.
We also enhanced our internal operations in the
year under review. We have modified our compensation
model for all managers and employees and further
strengthened our corporate culture through a common
understanding of leadership. We sharpened our business
model by divesting our subsidiary ZKB Österreich and
acquiring Complementa AG. The age-related succes-
sion within the Executive Board was continued with the
election of Hjalmar Schröder as Chief Risk Officer to
succeed Roger Müller. The Cantonal Parliament elected
Dr York-Peter Meyer and Kristine Schulze as successors
to Henrich Kisker and Walter Schoch, who resigned.
Public service mandate and financial security
guide our actions
We will continue to drive the further development
of our bank in the future. Two factors determine the
framework for our business activities.
First, we strive for maximum financial security for
our bank. ZKB is rated triple-A by the three leading rat-
ing agencies, taking into account the state guarantee,
and aa- without the state guarantee, making it one of
the safest banks in the world. Our bank is excellently
capitalised. Another aspect of the bank’s security is that
we grow responsibly – in harmony with the canton and
on the basis of our proven risk policy.
Second, the framework for our actions is provided
by the statutory public service mandate, for which we
invested CHF 140 million in the reporting year. Our busi-
ness model is based on this and, with our unique selling
point of contributing to solving economic, social and
sustainability tasks in the Canton of Zurich, obliges us
“Our tried and tested strategy
remains unchanged: we aim
to expand our leadership
position in the Greater
Zurich Area, strengthen our
national position and utilise
international opportunities.”
Urs Baumann
Chief Executive Officer
“In order to fulfil our public
service mandate, we are
pursuing with our universal
banking model a business
policy geared towards
continuity, stability and
diversification.”
Dr Jörg Müller-Ganz
Chairman
14
Zürcher Kantonalbank Annual Report 2024
› Foreword
to be more than just a bank. In order to fulfil our public
service mandate, we pursue with our universal banking
model a business policy geared towards continuity, sta-
bility and diversification. In addition to ZKB Banking and
the modernisation of our locations, other aspects of our
bank’s activities that show how we are fulfilling our pub-
lic service mandate include corporate volunteering, the
ZKB Philanthropy Foundation, sustainability consulting
for SMEs, ZKB environmental leasing and our climate
targets. We are proud of this.
We aim to continue to grow responsibly in the
future and to diversify our income base in the interests
of the security and stability of our bank. This benefits
everyone in Zurich. That means providing banking ser-
vices to the people of Zurich, contributing to solving
social problems and allowing the canton and its munici-
palities to share in our profits. Just like we’ve done for
over 155 years!
We thank you for your trust.
Dr Jörg Müller-Ganz
Chairman
Urs Baumann
CEO
15
Zürcher Kantonalbank Annual Report 2024
› Foreword
1.29
562
Consolidated profit before taxes
Participation
Return on equity (RoE)
bn
CHF
mn
CHF
The consolidated profit before taxes is CHF 1.29 billion
(previous year: CHF 1.25 billion).
The Canton of Zurich and its municipalities will parti
cipate in the result of Zürcher Kantonalbank for the
2024 financial year in the amount of CHF 562 million.
2022
8.4
%
2023
9.3
%
2024
8.0
%
Cost/income ratio (CIR)
Diversified income
Operating income of CHF 3,088 million comprises the
result from interest operations of CHF 1,680 million
(54 %), the result from commission business and ser-
vices totalling CHF 1,024 million (33 %), the result
from trading activities at CHF 353 million (11 %) and
the other result of CHF 32 million (1 %).
2022
57.5
%
2023
51.8
%
2024
55.0
%
Target: 58–64 %
2024
in brief
Business development: p. 57 ff.,
Financial Report: p. 104 ff.
16
Zürcher Kantonalbank Annual Report 2024
› In brief
2023
2023
2024
2024
18.7 %
6.6 %
17.9 %
6.8 %
26.8 %
9.4 %
25.7 %
9.8 %
8.0 %
2.8 %
7.8 %
3.0 %
2024
2024
2022
2022
146
%
124
%
2023
2023
147
%
117
%
14.9
AAA
Aaa
Leverage ratio
Net stable funding ratio
(NSFR)
Equity
Liquidity coverage ratio
(LCR)
Equity totalled CHF 14.9 billion as at the end of
the year (previous year: CHF 14.3 billion).
Risk-based capital ratio
Group rating
bn
CHF
142
%
116
%
gone-concern
gone-concern
Total loss-absorbing
capacity (TLAC)
Total loss-absorbing
capacity (TLAC)
going-concern
going-concern
17
Zürcher Kantonalbank Annual Report 2024
› In brief
51
Branches
2024
2022
144
bn
CHF
36 bn
CHF
2023
169
bn
CHF
107
521
Mortgage loans
Client assets
Fund volume
Credit exposure
to companies
bn
CHF
We are the market leader in real estate financing in
the Canton of Zurich (mortgage loans in the previous
year: CHF 101 billion)
Client assets totalled CHF 521 billion as at the end of
the year (previous year: CHF 451 billion). The net new
money inflow amounted to CHF 29.8 billion in 2024.
50
Market penetration
%
Densest network
of branches and ATMs
Nearly half of the people of Zurich and of the companies
domiciled in the Canton of Zurich are clients of Zürcher
Kantonalbank.
We operate 51 branches and around 260 ATMs in
the Canton of Zurich.
2024
2023
39 bn
CHF
bn
CHF
206
bn
CHF
Leader in the Greater
Zurich Area
18
Zürcher Kantonalbank Annual Report 2024
› In brief
No. of employees
Public service mandate
Attractive
employer
Anchored in
the Canton
of Zurich
6,607 people work in over 5,779 full-time
positions. With 430 apprenticeships, we are one
of the largest providers of vocational training in
the Canton of Zurich.
6,607
Low fluctuation
rate
2023
2024
6.1
%
5.5
%
Satisfied
employees
2021
78
2023
77
140
Expenses
mn
CHF
Over the past ten years, the Canton of Zurich and
its municipalities have participated in our profit with
an amount exceeding CHF 4 billion.
We have been the bank of the people of Zurich
for more than 150 years.
In 2024 we spent CHF 140 million for the public
service mandate.
154
4
Distribution
bn
CHF
Years
The commitment index of the latest employee
satisfaction survey is a high 77 out of 100 points.
19
Zürcher Kantonalbank Annual Report 2024
› In brief
Milestones
Sustainability for SMEs
We have a new sustainability-related advisory
service for small and medium-sized enterprises
(SMEs). With Eco-Check, a company analysis,
we show SMEs potential for improvement in
terms of resource usage, energy consumption
and climate-related matters, and offer further
advice and products.
Opening of a location in Lausanne
We have bolstered our business with pension
funds and institutional clients in French-speak-
ing Switzerland. To this end, we opened a local
sales office in Lausanne.
Opening of first branch based
on a new concept
As part of the modernisation of all our branches,
we opened the Kloten and Wollishofen locations
according to a new concept.
Sustainability
Location
Location
Capital adequacy requirements
fulfilled
In the reporting year we placed another
bail-in bond totalling CHF 300 million. The
total of five bail-in bonds which we have
issued mean that we already fully meet
the gone-concern requirements that will
apply from 2026. Furthermore, the final
requirement for our contingency plan has
been fulfilled, which is why FINMA con-
firmed on 26 March 2024 that it deems
the contingency plan implementable.
QR codes available only in German
20
Zürcher Kantonalbank Annual Report 2024
› In brief
Free everyday banking
At the beginning of the reporting year, we eliminated
the annual fees for private accounts in CHF and debit
cards.
Acquisition of
Complementa AG
We acquired Complementa AG in
order to enhance our expertise in
custody services.
New members elected to
the Board of Directors
The Cantonal Parliament held elec-
tions to replace Walter Schoch and
Henrich Kisker, two members of the
Board of Directors who resigned due
to age. York-Peter Meyer and Kristine
Schulze followed them.
Launch of thematic funds
Zürcher Kantonalbank’s Asset Management di-
vision expanded its range of sustainable invest-
ment strategies to include the topics of circular
economy, healthy longevity and digital economy.
Offer
Investment strategy
Divestment of ZKB Österreich
The sale of our subsidiary Zürcher
Kantonalbank Österreich AG was
agreed with Liechtensteinische
Landesbank (LLB).
New vested benefits
foundation
We have expanded our offering for
vested benefits assets by launching a
second vested benefits foundation.
Offer for trading and custody
of cryptocurrencies
Since this reporting year we have
been offering our clients trading and
custody services for the cryptocur-
rencies Bitcoin and Ethereum.
21
Zürcher Kantonalbank Annual Report 2024
› In brief
Subdued economic growth with
significant regional differences
We anticipate global economic growth will remain
subdued for the foreseeable future, but we do not ex-
pect a recession.
In 2025 we foresee a gradual, sustained economic
recovery in Europe and the emerging markets outside
China. Growth in China remains lower than in the past,
but still higher than in the EU. Geopolitical tensions, po-
tential trade conflicts and high government debt will
lead to more volatile price trends. In particular, the po-
tentially inflationary policy of the new US administration
could result in fewer interest rate cuts and rising interest
rates again.
For Switzerland we expect robust GDP growth.
Inflation will likely remain stable in most other countries,
giving central banks room for manoeuvre for further
interest rate cuts.
Challenging environment
We anticipate competition in the Swiss banking
centre will intensify further as a result of the merger of
the two big banks and the increased market activities of
foreign banks. The aim must be to collaborate with the
political community to maintain the good framework
for Switzerland as a financial centre. Equally important
is that people’s trust in the financial centre be strength-
ened while also highlighting the important role played
by banks, particularly that of domestic banks, with re-
spect to society and the economy.
Continuing the strategy
Zürcher Kantonalbank is adhering to its strategy.
We have a business policy focused on continuity that
prioritises the universal bank strategy, the bank’s high
level of security and stability, as well as its proximity to
clients. We are also driving income diversification for-
ward, in particular through a balanced product portfolio
and a broad range of services in the investment and
pension business. In the individual clients and SME core
segments, we are striving to expand on our standing as
a top-ranked bank. All internal activities are focused on
increasing quality and efficiency. Great importance is at-
tached to the Zürcher Kantonalbank brand. We want to
be perceived as the most highly appreciated bank across
Switzerland, both in the physical and digital worlds.
Sustainability as an integral component
of our business model
Sustainability is an integral component of our busi-
ness model. We incorporate the criteria of ecological,
social and economic sustainability into everything we do
and are guided by the United Nations Sustainable De-
velopment Goals and the Paris Agreement. We support
our corporate and retail clients with banking services
on the path to net zero by 2050. With our Net-Zero
Banking Alliance commitment, we have undertaken to
establish interim targets for 2030 and every five years
thereafter until 2050. We make our contribution to so-
cial responsibility through our strong and, in particular,
locally rooted social commitment, and by ensuring com-
prehensive access to financial services, especially for the
target groups defined by the Cantonal Banking Act on
Zürcher Kantonalbank.
Outlook
The environment for the banking industry will remain chal-
lenging in 2025. As a universal bank, however, we still
expect to be able to present gratifying results thanks to our
strategy and diversified business model. When conducting
our business activities, we aim for a balanced combination
of economically, socially and environmentally sustainable
development. We aspire to further expand our market posi-
tion in the Greater Zurich Area as the number one for
private individuals and SMEs.
22
Zürcher Kantonalbank Annual Report 2024
› In brief
23
Zürcher Kantonalbank Annual Report 2024
› Management Report
Bank of the People
of Zurich
Zürcher Kantonalbank has a clear statutory public service
mandate from the Canton of Zurich: to continuously
provide investment and financial services to the public and
business, to contribute towards efforts to address the
economic, social and environmental issues of the canton
and thus to support a sustainable development. This
makes us more than just a bank and has made us unique
for over 150 years.
24
Zürcher Kantonalbank Annual Report 2024
› Management Report
Public service mandate
Zürcher Kantonalbank was founded in 1870 as the bank
of both the people and companies of Zurich. It is an
independent public-law institution under the cantonal
law of Zurich. We have a public service mandate from
the Canton of Zurich. What this covers is specified in the
Cantonal Banking Act on Zürcher Kantonalbank and in
the Guidelines for the Fulfilment of the Public Service
Mandate issued by the Board of Directors and approved
by the Cantonal Parliament (zkb.ch/corporate-govern-
ance). Our business activities and public service mandate
therefore benefit the canton, the municipalities, com-
panies and the population. In 2024, expenses for items
not purely profit-oriented or cost-covering amounted to
CHF 140 million (2023: CHF 161 million).
Endowment capital and state guarantee
The endowment capital of CHF 2.425 billion forms
the corporate capital of Zürcher Kantonalbank and is
provided by the Canton of Zurich at market-based in-
terest rates. The canton also provides the bank with a
state guarantee. In doing so, it is liable for all the bank’s
(non-subordinate) liabilities should the bank’s resources
prove inadequate. This is a security measure that has
never had to be drawn upon. In exchange for the pro-
vision of the state guarantee, we pay annual compen-
sation to the canton, the amount of which is calculated
in accordance with an actuarial model that is approved
by the Cantonal Parliament. In 2024, the compensation
for the state guarantee totalled CHF 31.2 million (2023:
CHF 30.1 million).
Participation of the canton and municipalities
in the result of Zürcher Kantonalbank
Zürcher Kantonalbank fulfils its public service
mandate in several ways, including through a business
strategy geared to long-term continuity. This strategy
is based on market-oriented principles and intended to
achieve an adequate level of profitability.
Zürcher Kantonalbank will distribute a dividend
of CHF 375 million for 2024 (2023: CHF 528 million).
This includes the dividend to cover the actual costs of
the endowment capital in the amount of CHF 21 million
(2023: CHF 18 million). In addition, the canton partici
pates in the profit of Zürcher Kantonalbank through
the compensation for the state guarantee totalling
CHF 31 million (2023: CHF 30 million) and the total
OECD minimum tax of CHF 156 million (2023: CHF 0).
The municipalities participate in Zürcher Kantonalbank’s
profit with a dividend in the amount of CHF 170 million
(2023: CHF 170 million). Overall, the canton and munic-
ipalities will participate in the result of Zürcher Kanto
nalbank with CHF 562 million (2023: CHF 558 million).
400
140
Sponsorship commitments
for an attractive canton
Expenses for the public
service mandate
mn
CHF
Participation of the canton
and municipalities
* incl. special coronavirus dividend for the canton
(CHF 67 million) and municipalities (CHF 33 million)
Compensation for state guarantee to
the canton
OECD minimum tax to the canton
Dividend for the canton
Dividend for municipalities
CHF million
2020 *
2022
2021
2024
562
558
519
458
600
500
400
300
200
100
0
2023
479
25
Zürcher Kantonalbank Annual Report 2024
› Management Report
Developments from the
public service mandate
Free everyday banking launched
Zürcher Kantonalbank eliminated the annual fees
for private accounts in CHF and debit cards for retail
clients as of 1 January 2024 (for more information on
ZKB Banking, see p. 39).
Advisory service on sustainability
for SMEs launched
After a test phase at the end of 2023, in 2024 we
launched our advisory service for SMEs on climate-relat-
ed matters, energy consumption and resource efficiency.
The service combines engineering and financing expert-
ise, provides clients with an analysis and improvement
measures as well as an estimate of investment costs and
customised financing solutions and products – such as
the ZKB environmental loan or the newly launched ZKB
environmental leasing.
New ZKB environmental leasing supports
sustainable investments
We launched ZKB environmental leasing for our
corporate clients at the beginning of 2024 together with
the new advisory service on sustainability for SMEs. In
this way we support climate-friendly objects and pro-
jects. Zürcher Kantonalbank contributes 1 percent to the
procurement costs for sustainable investments financed
via environmental leasing. This contribution supports
clients in two ways. First, green leasing can be used to
finance objects with sustainable drive systems. Second,
environmental leasing can also be used to implement
sustainable pioneering projects based on sustainability
advice from Reffnet, our partner for the advisory service.
In the 2024 financial year, financing totalling CHF 25 mil-
lion was concluded with ZKB environmental leasing.
Joint education initiative of all cantonal
banks launched
On the initiative of Zürcher Kantonalbank, the
Swiss cantonal banks jointly launched in the reporting
year an investment solution that distributes an annual
donation to Education Cannot Wait, the United Nations
initiative for education in emergency situations. The fund
was launched by Zürcher Kantonalbank with Swisscanto
Asset Management International SA as the fund man-
agement company. The cantonal banks support the new
product with start-up capital totalling CHF 10 million. As
a result, around 1,600 children in 48 crisis regions can
enjoy a school education.
ZKB Philanthropy Foundation established
In line with our support mandate, at the end of
2023 we decided to establish the ZKB Philanthropy Foun-
dation. This was established in spring 2024 and funded
with a contribution of CHF 25 million as foundation cap-
ital. The foundation, which commenced operations in
the reporting year, initially comprises five funding areas
with an impact on the Canton of Zurich: health and
sport, nature and ecology, social affairs, art and culture,
as well as education, science and research.
As an umbrella foundation, the foundation offers
clients the opportunity to realise their own philanthropic
projects – with significantly less effort than setting up
their own foundation. In addition, existing foundations
that would like to hand over their administrative work
can be integrated under the umbrella of the foundation.
Certificate of energy efficiency for
residential buildings piloted
In order to promote the advisory service for our
clients on sustainability in real estate, we piloted in the
reporting year the new product “Certificate of energy
efficiency for residential buildings” at the Affoltern am
Albis branch.
The certificate was developed by the bank’s Real
Estate Research department and provides sustainability-
relevant characteristics for each residential property in
the Canton of Zurich, such as carbon emissions, carbon
savings through refurbishment, heating replacement op-
tions and solar potential. Selected clients were presented
with such a certificate for their own home, which gave us
a quick and uncomplicated overview of the sustainability
of their property and the possibilities for optimisation.
The feedback from clients was consistently posi-
tive. They appreciated both the sensitisation to the topic
and the solutions offered.
Katharinen Tower supported as
main sponsor
A temporary installation rose up in 2024 next to
the Fraumünster Tower in the city of Zurich: the Kathar-
inen Tower. It commemorates Katharina von Zimmern,
the last abbess of the Fraumünster monastery. She hand-
ed over her abbey to the Zurich Council in 1524.
Throughout the centuries, women have always
occupied a prominent place in history and helped to
shape it.
Zürcher Kantonalbank supported the Katharinen
Tower as the main sponsor in order to create visibility for
the historical figure Katharina von Zimmern and another
500 women who have helped to shape Zurich to this day.
26
Zürcher Kantonalbank Annual Report 2024
› Management Report
Corporate volunteering programme launched
ZKB introduced a corporate volunteering pro-
gramme in the year under review. Employees can spend
up to two days volunteering for the benefit of society in
the focus areas of the environment, social affairs, sport
and education.
ZKB Sustainability Standard
in the investment business
For our investment business we defined the ZKB
Sustainability Standard, which covers both the Invest-
ment Solutions and Asset Management divisions. We
apply this standard in our active investment solutions
(active investment solutions refer to asset management
mandates and investment funds, with the exception of
indexed, individualised and third-party managed in-
vestment solutions and investment funds in the area of
alternative investments). It also applies to investment
recommendations made by Zürcher Kantonalbank as
part of the standardised, sustainable investment advisory
mandates of the Investment Solutions division, where
clients make the investment decisions themselves.
Climate targets set for the
balance-sheet-relevant financing business
We are guided in the financing business primarily
by the objectives of the federal government regarding
Agenda 2030 and the achievement of greenhouse gas
neutrality by 2050. As part of the Net-Zero Banking Alli-
ance (NZBA), our bank is aiming for net-zero greenhouse
gas emissions by 2050 and has undertaken to apply
science-based sector-specific climate targets in the finan-
cing business that are based on the 1.5 ° C climate target.
As part of this commitment, in 2023 Zürcher Kanton-
albank defined the first quantitative climate target for
the residential mortgage business. In 2024, a further
quantitative climate target was set for the office-related
mortgage business. In our sustainability policy we have
also defined climate targets in the form of conditions
and exclusion criteria for the climate-intensive sectors
of coal, oil and gas, energy production and cement.
Removal portfolio for the complete
neutralisation of residual operational
emissions
The goal of our operational environmental pro-
gramme is to reach net zero by 2030. Our own emissions
are to be reduced to less than 1,800 tonnes by 2030. To
achieve net zero in its operations, the bank takes add-
itional emission reduction measures and also neutralises
the residual emissions it creates by means of negative
emission technology certificates (NET). Our partners for
the removal of all operationally generated residual emis-
sions are Neustark AG, Climeworks AG and Bioenergie
Frauenfeld AG.
New commitments as main sponsor
As part of our support mandate, we entered into
two new commitments as the main sponsor in the re-
porting year. We are now supporting the Musikkollegi-
um Winterthur and thus making a further contribution
to Winterthur as a diverse city of culture. We are also
the new main sponsor of Stadtzürcher Seeüberquerung
(Zurich Lake Crossing), which is our contribution to pro-
moting health.
We were also able to support some highlights of
existing partnerships, including the Cantonal Brass Band
Festival organised by the Zurich Brass Band Association
and the North-East Swiss Wrestling Festival organised by
the Zurich Wrestling Association. We also supported the
2024 Paracycling and Cycling World Championships in
Zurich and the Trachtentrail event in the city of Zurich
as part of the 2024 Federal Costume Festival.
27
Zürcher Kantonalbank Annual Report 2024
› Management Report
Group Mission
Statement and Strategy
Our vision is “Close to you”. Our mission statement describes
our identity and serves as a compass for our conduct:
We support, advise and offer solutions. Always, everywhere.
Throughout your life. Our strategy shows us which path
we need to follow in order to fulfil our public service man-
date, both now and in the future: We are a universal
bank and a leader in our home market. Throughout Switzer-
land we are a strong partner for large companies as well
as private and institutional investors. We provide services in
selected countries outside Switzerland.
Our vision
We support, advise and offer solutions.
Always, everywhere. Throughout your life.
– No. 1 in the Greater Zurich Area
– Nationally strong
– Internationally successful
Close to you
Our values
Inspiring
– Motivate, think ahead, show courage
Responsible
– Be reliable, create value, be present
Passionate
– Be involved, enthuse, persevere
Our goals
– Happy clients
– Committed staff
– High financial security
– Sustainable success
Powerful Swiss universal bank
Our roots
– For the population and the economy
– Continuity in business policy
– Economic, ecological and social engagement
Bank of the people of Zurich
Group mission statement
28
Zürcher Kantonalbank Annual Report 2024
› Management Report
Group mission statement
Zürcher Kantonalbank is characterised by continuity and
stability. To ensure that we can continue to keep our
promise of being “close to you” in future, we keep pace
with economic, social and technological developments
and align the organisation accordingly.
The group mission statement serves as a compass
for our conduct and the future development of Zürcher
Kantonalbank and its subsidiaries.
The more fast-paced the environment, the more
important it is that long-term visions, goals and values
guide our actions. Our Board of Directors has reformu-
lated what this means in today’s world in our mission
statement.
The key element of this is the way we view our-
selves. We’re the bank of both the people and com-
panies of Zurich. We engage in economic, environmental
and social activities to fulfil our public service mandate.
Stakeholder groups
We want to enthuse our clients. In order to main-
tain our successful positioning in a rapidly changing
world, we continuously strive to improve our under-
standing of proximity: We want to advise our clients
not only as financial experts, but also expand their own
financial expertise, provide them with lifelong support
and offer them solutions to challenges they might not
even be aware of.
As an institution under public law, we have a spe-
cial responsibility to the Canton of Zurich. Because of
this, we conduct our business activities with a focus on
maximum financial security and reliability at all times.
This is only possible through the efforts of com-
mitted employees who identify with our vision, goals
and values. That is why we provide them with compre-
hensive, long-term support to enable them not only to
contribute actively to the development of the organisa-
tion, but also to successfully develop individual plans for
enhancing their own qualifications and skills.
Our partners and suppliers are also pivotal to our
actions. We attach great importance to cultivating a fair
and cooperative business relationship with them, not
only by focusing on economic aspects, but also by pay-
ing attention to ecological and social standards as well
as the regional value chain.
We communicate with clients, employees and the
public collaboratively, transparently and in good time.
Our values
Our values – responsible, inspiring and passion
ate – shape and reflect our culture and the conduct of
the staff.
We conduct ourselves responsibly in every situation and
with respect to all stakeholder groups. We are a reliable
partner, make a positive impact and are at hand when
needed. At the same time, our decision-making is always
focused on creating sustainable added value – for both
society and the environment.
Those who take initiative and inspire do not wait
to see what others do. We think ahead, anticipate
trends, show courage and assume a pioneering role, and
in doing so inspire others and provide positive food for
thought. We internalise our value of “inspiring” within
our culture and thus become the bank that sets the pace
beyond the Zurich area.
Our actions always revolve around people. Our
passion for what we do is palpable – regardless of
whether these contacts take place in person or online.
Our collaborative commitment and perseverance spark
enthusiasm in every encounter and in every aspect of
our work.
Group strategy
Strategic principles
We are a universal bank and a leader in our home
market, the Greater Zurich Area. Throughout Switzer-
land we are a strong partner for large companies as
well as private and institutional investors. We operate
internationally in the interests of our Swiss clients.
Globalisation, digitalisation, regulation of the fi-
nancial sector and demographic change are challenges
that we address by providing contemporary and for-
ward-looking solutions for our clients. Our group strat-
egy tells us which path we must take as Zürcher Kan-
tonalbank. It defines our current and future business
activities and priorities.
We firmly believe that the only way for us to fulfil
our broad statutory public service mandate – which we
passionately embrace – is by being a universal bank. This
puts us in a position to offer the full range of banking
services from one source and generate added value for
clients in the process. We actively address key sustain-
ability-related issues, lead the way with sustainable offer-
ings and guide clients on their journey towards a more
sustainable future.
Our entire value chain is focused on providing
banking services to private individuals and companies
in the Greater Zurich Area. The strong presence in our
home canton and cross-divisional collaboration under
the umbrella of the universal bank give us a competitive
edge that we use to offer benefits to clients.
29
Zürcher Kantonalbank Annual Report 2024
› Management Report
We pursue a diversification strategy: We generate in-
come in several different business areas. Doing so en-
ables us to minimise risks and increase stability, which
in turn benefits our clients. We pursue a policy of broad
income diversification and intend to expand on this even
further, in part by aiming for qualitative growth in the
investment and asset management business. We are also
pursuing limited geographical diversification in order to
slightly reduce our risk exposure to the narrow core mar-
ket of Zurich.
The group strategy is geared towards client
segments, producers and functions, and we define a
sub-strategy for each of these areas.
Client segments
In the core individual client segments, we aim to
retain our status as the leading financial services pro-
vider for the people of Zurich. We are there for our cli-
ents. When faced with life events such as entering the
workforce, starting a family, the purchase of residential
property, the founding of a company or inheritances,
we are the reliable partner at their side. We understand
what moves them and which challenges they face. Our
experts offer the right solutions for those events and
create added value.
In the core SME segments, our goal is to further
expand our position as the clear number one for com-
mercial, business and corporate clients in the Greater
Zurich Area. We aspire to be the indispensable financial
partner of choice for the 5,000 largest corporate groups
in Switzerland.
The specialised segments include large corpora-
tions, pension funds, financial institutions, key clients,
external asset managers and international private cli-
ents. We make targeted investments in these specialised
segments in order to achieve qualitative growth.
Producers
Producers is the term we apply to the Asset Man-
agement, Trading, Capital Markets & Research divisions,
as well as to the custody business. These are divisions
that not only offer products directly on the market and
maintain client relationships, but also perform an intern-
al service function for the bank’s various distribution
channels (i. e. for product distribution via the client ad-
visors, via our digital channels, etc.). We make ongoing,
targeted investments to strengthen our producers and
ensure that they are capable of delivering high-quality
services that underpin their long-term ability to compete
on the market.
Functions
Functions include all internal activities that provide
targeted services to support and monitor the client seg-
ments and producers. These include Risk Management,
Legal & Compliance, Communications, Marketing, IT,
Segment, Product & Channel Management, People &
Culture (Human Resources) and Finance. They are all
committed to boosting the efficiency of the universal
bank even further and delivering on the promise of being
the bank “close to you”.
Our priorities:
Our vision is to be “close to you”. Our goal is that we want to be perceived as the most highly ap-
preciated bank, both in the physical and digital worlds. Six priorities serve as our guiding principles:
– We want to further develop our successful growth and diversification strategy.
– We want to increase our effectiveness and efficiency.
– We want to use digitalisation to create a top client experience.
– We want to further expand our leading position in the area of sustainability.
– We want to further strengthen our strong brand.
– Our culture is our success factor. We want to develop it further in a targeted manner.
30
Zürcher Kantonalbank Annual Report 2024
› Management Report
Our strategy house
Reports on:
Client segments: p. 38 ff.
Core segments – individual clients: p. 38 ff.
Core SME segments: p. 41 ff.
Specialised segments: p. 43 ff.
Producers: p. 47 ff.
Group strategy
Client segments
Producers
Functions
Group mission statement
Core segments –
individual clients
Asset management
Core SME segments
Trading, capital
markets & research
Specialised segments
Custody
– Retail clients
– High-net-worth
individuals
– Private Banking
– Segment, product &
channel management
– Commercial clients
– Business clients
– Corporate clients
– Investment solutions
– Fund management
– Financing centre
– IT
– Operations
– Real estate
– Large corporations
– Pension funds
– Financial institutions
– Key clients
– External asset managers
– International private clients
– Marketing
– Communications
– People & Culture (HR)
– Finance
– Risk
– Legal & compliance
31
Zürcher Kantonalbank Annual Report 2024
› Management Report
Business Environment
and Risk Assessment
Overall economy
US economy more dynamic than euro zone
and China – Swiss economy robust
In 2024, the global economy proved to be more
dynamic and resilient than expected. In the US in par-
ticular, economic growth was surprisingly high thanks to
continued strong private consumption. The divergence
between the US and Europe has thus become even more
pronounced. Despite a recovery towards the end of the
year, private consumption in the euro zone was still well
below the pre-pandemic trend. Although the economy
grew slightly in the year under review, this development
was primarily driven by Southern Europe, while the Ger-
man economy has been stagnating for some time.
After a strong start to the year, growth in China
has slowed significantly. Structural problems such as the
ongoing real estate crisis, the provinces’ high levels of
debt and the demographic trend had an increasingly
negative impact on economic growth.
The Swiss economy proved robust over the course
of the year. This is due not only to the high level of immi-
gration, but also to diversification in high-tech industries.
These sectors have sales markets that are less price-sen-
sitive, which means any potential strengthening of the
Swiss franc will have less of an impact on demand.
Central banks lower key interest rates
due to decline in inflation
Inflation receded across a broad front in 2024.
The major economic upheavals caused by the pandemic
and the war in Ukraine are largely a thing of the past.
The decline in inflation and the stabilisation of inflation
expectations, however, were also bolstered by the de-
cisive action taken by the central banks. Over the course
of the year, inflation rates in many major economies
approached the target value of 2 percent again. This
allowed most major central banks to lower their key
interest rates again.
The Swiss National Bank (SNB) gave the go-ahead
back in March and subsequently lowered the key interest
rate at every assessment to 0.5 percent by the end of
2024. Several interest rate cuts also took place in 2024 in
the US, the euro zone, the UK and Canada. In contrast,
the Japanese central bank ended its almost eight-year
experiment with negative interest rates and raised its key
interest rate to 0.4 percent.
Positive market developments
The equity markets benefited from the construct-
ive macroeconomic environment and the prospect of
lower interest rates. In addition, investors’ fantasies con-
tinued to be fuelled by the ongoing boom in the field of
artificial intelligence. The major technology companies
therefore remained the driving force behind the equity
markets. It was only later in the year that defensive
sectors, such as consumer staples and energy suppliers,
were able to recover somewhat.
The US equity market received additional support
from the re-election of Donald Trump, from whom invest-
ors expect a business-friendly course with lower taxes
and deregulation in the financial and energy sectors. As
a result, the US equity market rose by more than 20 per-
cent for the second year in a row. Yields on government
The year under review was characterised by geopolitical
uncertainties, weakening inflation and interest rate cuts by
the central banks. The financial centre remains a pillar
of the Swiss economy, but the conditions are challenging.
Numerous regulatory requirements are in the works.
The risk profile of Zürcher Kantonalbank has not changed
significantly compared to the previous year and remains
robust as at the end of the 2024 financial year.
32
Zürcher Kantonalbank Annual Report 2024
› Management Report
Many growth initiatives
Some areas of activity in the advisory business hold
obvious potential for banks. Investment, pension and tax
matters have become more complex, for example. Con-
cerns about inflation and uncertainties are prompting a
greater focus on sustainable asset protection. Against
that backdrop, there is a growing need for comprehen-
sive financial advice; banks can meet that need by offer-
ing both advisory services and corresponding products.
Digitalisation solutions
Digitalisation is leading to new fintech companies
trying to gain a foothold in the market. It is also opening
up numerous opportunities for established banks – in
some cases through collaborative partnerships with in-
novative fintech start-ups. These collaborative partner-
ships are seen by most financial services providers in
Switzerland as a key to success if they want to offer new
client experiences and solid quality at reasonable costs.
Most of the institutions active in retail banking are still
working on digitalisation solutions. Ultimately, however,
the digital channels are more useful for maintaining the
loyalty of existing clients than for acquiring new ones.
Regulation
The regulatory focus was mainly on reviewing banking
legislation following the merger of the big banks, as
well as on the major trends of data management and
digitalisation as well as sustainability and sustainable fi-
nance. Bank-related initiatives are monitored by Zürcher
Kantonalbank and proactively supported by its repre-
sentatives, either directly or in trade associations.
Continued development of
supervisory law
In 2024, FINMA, the SNB and the Financial Sta-
bility Board (FSB) published their reports on the merger
of the two big banks. In addition, FINMA approved the
merger of the big banks without conditions in June 2024
based on the Competition Commission’s report. The
Federal Council also published its too-big-to-fail report in
June, in which it analyses possible measures. The report
of the Parliamentary Investigation Committee was pub-
lished towards the end of 2024. Parliament has therefore
postponed until 2025 all proposals in connection with
the merger (including the 60 or so initiatives already
pending in Parliament) and the Federal Council’s propos-
al to introduce a public liquidity backstop. In that way
all proposals can be discussed in their entirety.
FINMA opened various consultations, including on
the FINMA Insolvency Ordinance and a new circular on
consolidated supervision. The transfer of the supervisory
principles on auditing into an ordinance, including a
bonds rose for the most part since the beginning of
the year, reflecting the improved economic outlook and
lower expectations of interest rate cuts.
In Switzerland, on the other hand, yields declined
significantly due to the SNB’s scaled-back key interest
rate, lower inflation and the continuing high demand for
government bonds from institutional investors. At the
end of the year, the yield on 10-year Swiss government
bonds fell below 0.2 percent. The price of gold was on
an upward trajectory and repeatedly reached new record
highs amid robust demand.
Switzerland as a banking
centre
The Swiss financial centre makes an important contri-
bution to the Swiss economy. Some 240 banks account
for almost 5 percent of the domestic value chain. Switzer-
land is still the world’s number one for cross-border
private banking.
Structural changes on Switzerland’s
domestic market
Margins remain under pressure in many business
areas, especially as the Swiss market is highly competi-
tive. After interest operations generated high revenues
for many banks in 2023 in the wake of the rapid interest
rate shift by the Swiss National Bank, this normalised in
the year under review as a result of the SNB’s interest rate
cuts.
The merger of the two big banks in 2023 revealed
the first structural changes for the Swiss financial cen-
tre in the reporting year and will result in further major
changes in the coming years.
The general conditions in banking operations re-
main challenging. Banks have to contend with increasing-
ly extensive national and international regulatory require-
ments, find the right solutions to accommodate changing
client behaviour and make good use of the opportunities
opened up by digitalisation. Cost management remains
one of the key strategic objectives at many banks.
Swiss banks optimistic despite
uncertainties
The SNB lowered the key CHF interest rate in sev-
eral steps, from 1.75 to 0.5 percent, during the year
under review. As a result, margins came under pres-
sure again, and interest operations saw declines. So far,
there have not been any major defaults in the Swiss
lending business. In contrast, banks’ income from the
commission business increased, while trading business
was down in many places.
33
Zürcher Kantonalbank Annual Report 2024
› Management Report
complete revision of Circular 2025 / 1 “Auditing”, has
already taken place and entered into force on 1 January
2025, as has the new Circular 2025 / 2 on “Rules of con-
duct under FinSA / FinSO”.
The contingency and stabilisation plans of Zürch-
er Kantonalbank as a systemically important bank were
reviewed by FINMA in March 2024 and deemed imple-
mentable.
In the area of financial market law, the revision
of the Financial Market Infrastructure Act (FinMIA) has
begun, with a focus on financial market infrastructures,
derivatives trading, market abuse, criminal provisions
and financial analysis.
Data and digitalisation becoming
increasingly important
As further headway is made with respect to di-
gitalisation, the importance of data increases too. This
development goes hand in hand with a growing number
of statutory regulations and requirements.
In 2024, the EU qualified the revised Data Protec-
tion Act and its ordinances as equivalent. The Swiss-US
Data Privacy Framework (DPF), which enables compliant
data exchange in accordance with the Federal Act on
Data Protection (FADP), came into force in line with the
regulation between the EU and the US. Following the
finalisation of the revised Cyber Security Act, which now
stipulates a reporting obligation in the event of critical
cyber attacks, the Federal Council launched the con-
sultation on the new Cyber Security Ordinance.
The law on the creation of a legally recognised
digital identity (e-ID), which is central to digital busi-
ness models, passed through the parliamentary process
quickly and largely uncontested at the second attempt.
In December 2024, both councils approved the Federal
Act on the e-ID together with credits. This legislation,
which is important for digital business models, is sched-
uled to come into force in 2026.
Important regulations have come into force in the
EU which, depending on the business model, also di-
rectly or indirectly affect providers in Switzerland. These
include the EU Data Act, which aims to ensure fair ac-
cess to and fair use of data. The EU Digital Services
Act establishes the framework for digital platforms and
search engines to improve data protection, combat illegal
content, etc. The EU AI Act also came into force in mid-
2024. In response, the Federal Council is expected to
present an analysis of possible Swiss regulations on the
topic at the beginning of 2025. FINMA has therefore
refrained from issuing its own regulation, but published
at the end of 2024 a supervisory communication on the
application of governance and risk management also in
relation to artificial intelligence. The EU has also begun
to comprehensively regulate cryptocurrencies. Switzer-
land was quicker in this regard and has already imple-
mented this through the distributed ledger technology
(DLT) legislation, with selective adjustments to Swiss law.
Sustainability and sustainable finance
Following the consultation process, the Federal
Council will bring the Climate Protection Ordinance into
force on 1 January 2025, with obligations for businesses
to draw up transition plans and to continuously adapt
to climate change and take protective measures.
In mid-2024, the Federal Council endorsed
self-regulation within the financial sector to combat
greenwashing and is temporarily refraining from legis-
lating on this topic. It will, however, continue to actively
monitor regulatory developments in the EU.
In mid-2024, the Federal Council opened the
consultation on broadening sustainability reporting in
accordance with the Swiss Code of Obligations (CO).
By lowering the thresholds, more companies are to be
subject to this reporting requirement. Only in the case
of banks should all institutions be subject to this obliga-
tion, regardless of their size and degree of influence on
sustainability. The banks are calling for equal treatment
in this regard.
In mid-2024, the Federal Council opened the
consultation on the CO2 Ordinance to further reduce
greenhouse gas emissions. As part of the ongoing CO2
legislation, an amendment was also made to the Federal
Act on Unfair Competition (UCA) in 2024. It is now also
considered unfair to make false or misleading statements
in terms of quality, quantity or in relation to production
processes.
After FINMA had adopted many of the financial
sector’s proposals for clarification and simplification in
two consultations, it will bring the new Circular 2026 / 1
“Nature-related financial risks” into force on 1 January
2026.
The new directive on due diligence in the area of
sustainability (CS3D, Corporate Sustainability Due Dili-
gence Directive) has been adopted in the EU. This goes
further in some areas, but is less far-reaching in others
(e. g. with regard to child labour) than the Swiss CO rules.
The EU supervisory authorities are also proposing that
the category “transition” be added to the designation of
sustainable investment solutions. The EU is thus adopt-
ing the UK’s approach defined in its policy statement
Sustainable Disclosure Requirements and Investment
Labels (SDR), which also allows for “improvers”. This
broadens the permissible investment universe.
Other relevant regulatory topics
at federal level
In mid-May 2024, the Federal Council launched
the dispatch on further strengthening the fight against
money laundering. In particular, the new Transparency
Act (TLEA) aims to create a central register of beneficial
34
Zürcher Kantonalbank Annual Report 2024
› Management Report
owners. In addition, advisors will now also be subject to
the Anti-Money Laundering Act (AMLA), but only for
transactions that are considered to be particularly critical
from an AMLA perspective, such as company formations
and restructurings as well as property purchases.
In the area of taxation, Switzerland and the US
have signed a new agreement on the mutual exchange
of financial data. Based on this, the previously unilateral
exchange of data in favour of the US is now reciprocal
for the first time.
Developments at cantonal level
Following the adoption of the OECD / G20 pro-
posal to tax large, internationally active companies at a
minimum rate of 15 percent in the federal referendum
on 18 June 2023, the regulation came into force on
1 January 2024. The OECD minimum tax also affects
Zürcher Kantonalbank, which will be subject to tax based
on the new criteria. For state-owned organisations, in-
come from the supplementary tax accrues to the owners.
The bank and Cantonal Parliament amended the Zürcher
Kantonalbank Act to ensure that the previous distribu-
tion of profit from Zürcher Kantonalbank remains the
same. The respective tax amount paid to the canton is
to be taken into account when determining the amount
of the distribution. The Cantonal Parliament adopted
the amendment to the Zürcher Kantonalbank Act in
the reporting year; the amendment enters into force on
1 January 2025.
In the year under review, the Cantonal Parliament
rejected a parliamentary initiative that provided for the
Cantonal Parliament to now approve the profit distri-
bution in a separate vote at the request of the Board of
Directors.
The amended Zürcher Kantonalbank Act entered
into force on 1 January 2024 and its purpose article now
enshrines sustainable development and greenhouse gas
neutrality.
Risk assessment
The Board of Directors’ risk management tasks
Risk management is practised at every level with-
in the bank. The Board of Directors is responsible for
managing overall risks: It approves the principles for risk
management and compliance, the Code of Conduct,
the framework for group-wide risk management and
the risk policy requirements at group level. The Board of
Directors is responsible for assuring a suitable risk and
control environment within the group and arranges for
an effective internal control system (ICS). It also approves
transactions involving major financial exposure.
Ongoing risk monitoring
Zürcher Kantonalbank fosters a risk culture that
is geared towards responsible behaviour. This includes
the ongoing monitoring of risks in all dimensions. The
risk organisation provides the Board of Directors and
the Executive Board with comprehensive reports on a
quarterly basis on the development and profile of credit,
market and liquidity risks, as well as compliance risks and
reputational risks.
Credit risks
The corporate loan portfolio shows pleasing
growth. Among other things, opportunities arose for
Zürcher Kantonalbank from the reorientation of various
companies following the merger of the big banks. The
portfolio remains stable in terms of default risks. While
the export-oriented sectors suffered from subdued in-
ternational demand, domestic and consumer-oriented
sectors benefited from robust private consumption. The
regular assessment of all major unsecured balance sheet
exposures has not revealed any extraordinary risks. Un-
certainties nevertheless remain due to several factors,
including the ongoing geopolitical tensions, the change
of governments in Europe and the threat of trade barri-
ers from the US.
The mortgage portfolio of Zürcher Kantonalbank
grew by 5.7 percent in 2024, outperforming the overall
market. Growth in owner-occupied housing was 2.1 per-
cent. Credit risk management ensures that the portfolio
growth in mortgage lending maintains a balanced risk
profile.
Zurich real estate market
The accentuated decline in interest rates has hard-
ly had any impact to date on price trends in the market
for owner-occupied homes. Despite the tailwind from
interest rates, price growth for owner-occupied homes
in Zurich has slowed slightly from 3.7 percent in 2023
to this year’s increase of 3.3 percent. In particular, prices
moved sideways for the “land” region of the ZWEX
Index, i. e. in more rural and therefore more affordable
35
Zürcher Kantonalbank Annual Report 2024
› Management Report
regions of the Canton of Zurich. The reason for the
limited price movement is probably the existing excess
supply. Following the rise in interest rates that began in
2022 with the end of the pandemic and the outbreak
of the war in Ukraine, prospective homeowners became
more cautious. The sales process was particularly difficult
in the new-build segment. Longer selling times and a
larger selection of properties for sale were the result. As
financing conditions became more favourable, buyers’
appetite to live in their own four walls increased again
in 2024. Ultimately, buying your own home can reduce
housing costs again compared to renting a similar prop-
erty. After a historic low in the number of transactions,
market activity picked up again in the second half of the
year. However, the reduction in the number of homes
available for sale will continue for some time and will
keep the price trend in check. That means the market for
owner-occupied homes is in a stable condition.
Market and liquidity risks
The risk profile in trading was largely characterised
by credit risks in bond trading. The value at risk (VaR) at
the end of the year was lower than in the previous year.
The bank managed the risks of its balance sheet
structure against the backdrop of falling interest rates
and, as a consequence thereof, changes in client behav-
iour when choosing mortgage products. With the SNB’s
interest rate cuts, client preference shifted in the second
half of the year in favour of fixed-rate mortgages, includ-
ing those with longer terms.
The good liquidity situation of Zürcher Kantonal-
bank is reflected in the solid liquidity risk ratios. Since
1 January 2024, additional liquidity requirements with a
stress horizon of 90 days (previously only 30 days) have
applied to systemically important banks. All regulatory
liquidity requirements, including the net stable funding
ratio (NSFR), were comfortably met at all times.
Operational and compliance risks
The bank’s risk profile for operational risks has
not changed fundamentally. Process and cyber risks
continue to be the two areas with the most significant
residual risks, which means that managing those risks
continues to be a high priority. The dynamics of business
activity and increasing regulation are constantly raising
the requirements for expert knowledge and models for
an appropriate control environment. Internal planning
and budgeting ensure that the necessary resources are
allocated accordingly.
The risk profile in the area of compliance risks has
remained stable. The implementation of the continually
evolving regulatory and statutory framework, particularly
regarding investor protection, data protection and the
fight against money laundering, continued to require the
deployment of substantial resources in 2024. A further
focus was placed on developments in sustainability top-
ics in order to meet the increasing legal requirements. In
the year under review, for example, special efforts were
necessary to update anti-money laundering systems
and manage legal and compliance risks connected to
sanctions imposed in response to geopolitical conflicts.
Climate protection has long been a central issue for
Zürcher Kantonalbank. The bank has underscored this
commitment by joining the Net-Zero Banking Alliance.
Climate-related financial risks, however, do not represent
a top risk for the bank. This can be explained by the
nature of the business activities and the strong focus on
the Zurich economic area.
Further information on risk management and the
risk profile is available in the Risk Report (Note l in the
Financial Report).
36
Zürcher Kantonalbank Annual Report 2024
› Management Report
Banking Services
for the Population
and Companies
In a challenging market environment, we delivered a strong
performance in all business areas thanks to the systematic
alignment of our organisation with clients’ needs. Continu-
ous further development of both our physical and digital
sales channels ensures that our clients enjoy an excellent
client experience.
Client proximity
We offer an outstanding client experience and often
provide our clients with lifelong support.
We ensure physical proximity to our clients every
single day, whether it be during personal advisory con-
sultations or during interactions at our locations. To that
end we maintained 51 branches in the Canton of Zurich
as at the end of 2024. With our branches, ATMs and
other locations, we operate the densest network in the
Canton of Zurich. We also operate national and interna-
tional sales offices or representative offices at selected
locations to support institutional clients and export-ori-
entated Swiss companies (see locations on p. 215).
We create additional proximity with a variety of cut-
ting edge digital self-service options. We are constantly
developing services that are provided via mobile channels
in particular, as they are becoming increasingly important.
As a result, clients can carry out their banking activities
regardless of the time or location via the ZKB eBanking
and ZKB Mobile Banking services.
We are of the opinion that security, user-friendliness
and service quality are of the utmost importance, which is
why we continuously review and optimise our processes.
In view of changing client needs in terms of being
able to conduct everyday banking transactions anywhere
and at any time as well as the simultaneous upgrading of
digital channels, we invest substantially in our eBanking,
Mobile Banking and cashless payment solutions. We are
constantly adapting the digital services and function-
alities we offer for banking transactions to meet our
clients’ needs and adding new, cutting-edge functions.
Client satisfaction survey:
Our client loyalty remains consistently high
Our clients give us feedback on the performance
of Zürcher Kantonalbank as part of the client satisfaction
survey conducted every two years. Conducted with the
help of external institutions, the survey focuses on client
loyalty and satisfaction with respect to various aspects
of the client relationship.
In 2024, we received the opinions of over 7,000
clients. The results show that client loyalty remains con-
sistently high in all three areas – Private Banking, Cor-
porate Clients and Direct Banking – compared with the
2022 survey. The index, which expresses client loyalty,
stands at 77 index points out of a possible 100 points
in Private Banking, 80 index points in Corporate Clients
and 78 index points in Direct Banking. We also recorded
very high scores in terms of perceived service quality.
Modernisation of all branches
in the Canton of Zurich
Zürcher Kantonalbank also relies on its local pres-
ence in the long term. All of the branches are to be re-
modelled in line with a new location concept and will
boast a more modern, standardised client and brand
experience across all channels.
37
Zürcher Kantonalbank Annual Report 2024
› Management Report
The branches will focus on personal advice and providing
support for important life or corporate events. As more
and more day-to-day transactions are being taken care of
digitally, branch employees provide clients with assistance
for self-service channels on site and help them venture
into the digital world.
In the year under review, the Kloten and Woll-
ishofen branches were reopened with a new concept.
Planning for the modernisation of further locations was
also initiated.
Another increase in cashless transactions
2024 saw a continuation of the trend towards
cashless payments. In the reporting year, we recorded
a 6 percent decrease in cash transactions. By contrast,
cashless transactions (ZKB Visa debit card, credit card
or TWINT) increased by 14 percent. In payment trans-
actions, there was a further shift from physical payment
orders (Quickpay) to electronic payments (eBanking,
Mobile Banking, eBill, LSV).
ZKB Mobile Banking is the most frequently
used channel among private individuals
With 8 million logins per month, Mobile Banking
is the primary channel for retail clients to access every-
day banking services. Use of our ZKB Mobile Banking
channel is growing strongly and has surpassed that of
eBanking. The number of clients who use only Mobile
Banking (mobile-only users) is also growing strongly.
Our aim is to offer all everyday banking transac-
tions in Mobile Banking.
Our mobile applications ZKB Mobile Banking, ZKB
Twint, ZKB Access and frankly are rated as very good. In
a nationwide comparison with apps from other finan-
cial services providers, we are the leader, according to a
study by the Lucerne University of Applied Sciences.
Open banking driven forward
On the topic of open banking, Zürcher Kanton-
albank supports further developments for various client
segments.
Thanks to the Swiss Bankers Association’s (SBA)
“Retail Multibanking” industry project, private individ-
uals should be able to manage several banking rela-
tionships via a single platform or app and thus obtain
an up-to-date financial overview of all their banking
relationships.
Corporate clients and trustees can use additional
software interfaces via the SIX bLink platform to connect
their corporate account at Zürcher Kantonalbank online
in order to directly reconcile their accounts receivable
and accounts payable and obtain a cash management
overview in real time.
For asset managers, involvement in the “Open-
Wealth Association” has been intensified so that they
can continuously improve and automate their advisory
services, including direct stock exchange trading with
Zürcher Kantonalbank.
Further development of digitalisation
and innovation
Every business unit within Zürcher Kantonalbank is
working on new solutions. We foster a corporate culture
that supports not only ongoing but also transformative
innovation at every level.
We develop products, services and business mod-
els for every client segment in the bank based on our
bank’s strategy. Throughout the bank, we ensure that
important market developments and future trends are
incorporated into the different strategies of the business
areas at an early stage. We use a variety of future scenar-
ios to work on expansions, updates and transformations
from the client’s perspective. The close exchange with
specialised companies, academic research partners as
well as innovative start-ups ensures that the latest mar-
ket developments are incorporated into future solutions.
Promising ideas are broken down into concrete steps,
and various offers are tested with clients directly. As a
result, several innovations contributed to the bank’s suc-
cess in the past financial year.
Zürcher Kantonalbank develops and operates our
bank’s applications and systems in the centre of Zurich
– something we are proud of. Because it keeps us close
to our users, which lets us run our IT both efficiently and
effectively.
Building on stable, simple and secure services, we
are focusing on important forward-looking investments
for the next few years, including the cloud and informa-
tion management, the implementation of our cyber secu-
rity roadmap and support for our business portfolios. We
use automation and standardisation as ways to increase
our impact on behalf of the bank, and we use systematic
performance management to steer our developments
based on facts.
Our employees are our greatest asset in this re-
gard. That is why we make long-term investments in our
IT engineering culture as well as in the skills, competen-
cies and specialist careers of our employees.
New digital platform for external
asset managers as well as professional
and institutional clients
With the launch of “ZKB eWealth” and new in-
terfaces for data exchange with third-party systems,
Zürcher Kantonalbank in the reporting year further
expanded and comprehensively modernised its digital
offering for external asset managers as well as profes-
sional and institutional clients. They can use it to obtain
an overview of their clients’ portfolios, account, custody
account and money market holdings, retrieve receipts,
38
Zürcher Kantonalbank Annual Report 2024
› Management Report
enter individual and collective stock exchange orders,
foreign exchange transactions, instructions for corporate
actions and account transfers. The interface also enables
the exchange of position and transaction data with other
banks and third-party system providers as well as the
real-time receipt of stock exchange orders. With this
contemporary offering, we are meeting a major need
of our professional clients and positioning ourselves as
a central provider in the market.
Guarantee and import letter of credit orders
now in eBanking
Zürcher Kantonalbank provides its corporate cli-
ents with new functionalities in eBanking that enable
the electronic and secure commissioning of orders for
guarantees and import letters of credit. As an alternative
to placing orders in writing using traditional forms, the
digital channel offers significant advantages: a constant-
ly updated overview of all orders, the option of copying
old orders and using them as a basis for new ones, as
well as efficient and secure transmission of orders to
Zürcher Kantonalbank. The functionalities will be grad-
ually expanded so that in the future, in addition to other
foreign trade products such as export letters of credit or
documentary collections, it will also be possible to enter
change orders, exchange draft texts for guarantees, no-
tify commission settlements or use additional reporting
functions.
Digital assets: Trading and custody
of cryptocurrencies
With the launch of the Digital Asset Solution,
Zürcher Kantonalbank is offering its clients trading and
secure custody of cryptocurrencies. We are thus setting
another milestone in connection with digital assets. The
new processes and services are seamlessly integrated
into the existing client channels ZKB eBanking, ZKB Mo-
bile Banking and ZKB eWealth (for institutional investors)
and thus offer a familiar, simple and secure client experi-
ence. The offer is characterised in particular by the fact
that Zürcher Kantonalbank assumes the critical function
of securely storing the private keys. This means that cli-
ents do not need their own wallet and therefore do not
have to worry about storing their own private keys. We
also enable trading around the clock and at weekends
right from the start.
8
High
client
loyalty
according to the 2024 client satisfaction survey
Modernisa-
tion of all
locations by
2030
ZKB Mobile Banking
million logins
per month
39
Zürcher Kantonalbank Annual Report 2024
› Management Report
Core segments –
individual clients
As a financial partner in touch with the realities of life,
we support and advise our clients during major life
events. When it comes to important financial events
and decisions, such as entering the workforce, starting
a family, buying residential property, retirement and in-
heritances, our client advisors are personally available as
competent partners. They stand at the ready to develop,
in a timely manner, comprehensive solutions for invest-
ments, financing and taxes, as well as for retirement and
succession planning. Additional specialists may also be
consulted, depending on the complexity of the matter.
We provide comprehensive solutions to meet individual
requirements and are at our clients’ side at every stage
of their lives to ensure they can make the right financial
decisions for the long term.
Our direct bank provides advice and support for
our clients’ day-to-day banking transactions while sim-
ultaneously serving as the central processing centre
for Zürcher Kantonalbank. Our wide range of services
includes the execution of our daily business activities,
business openings and closings, maintenance of mas-
ter data, availability and deputisation management as
well as services related to complex needs in connection
with estates and guardianships. This also includes our
phone-based customer services, which recorded around
880,000 incoming calls in 2024 (2023: around 930,000).
At the end of 2024, we had active relationships
with around 770,000 individual clients in our core indi-
vidual client segments (2023: around 740,000).
Launch of ZKB Banking attracts new clients
Zürcher Kantonalbank eliminated the annual fees
for private accounts in CHF and for debit cards for retail
clients as of 1 January 2024.
Existing clients began to reap the benefits of this
automatically starting on 1 January 2024. Since then, the
possibility of opening new accounts digitally has enabled
new clients from all over Switzerland to use the new
ZKB Banking service. In the reporting year, we recorded
around 31,000 additional active individual clients, which
we attribute in part to this offering.
ZKB Banking combines the advantages of a free,
purely digital neobank with the security and added value
of a traditional bank that offers high service quality and
personalised advice for everyday banking transactions
via digital channels – and also has a presence in the
Canton of Zurich through its 51 branches. Clients have
access to products and services from one of the safest
universal banks in the world – with personalised advice
and service from specialised experts by phone, video or
on site at the branches in the Canton of Zurich.
in the Canton of Zurich for private individuals
50
107
11
Market penetration
Mortgage loans
Pension assets in the ZKB foundations
for pillar 3a and vested benefits
billion
CHF
billion
CHF
%
Pension assets
2022
2024
2020
87.7
2021
2023
91.8
100.9
96.8
106.6
40
Zürcher Kantonalbank Annual Report 2024
› Management Report
Zürcher Kantonalbank’s goal is for clients to be able to
carry out all their day-to-day transactions through a hybrid
offering – meaning either digitally or physically – by 2025.
ZKB Banking is an important milestone on this path.
More bank for young adults:
New offer for U30 clients
With the launch of ZKB Banking Young, Zürcher
Kantonalbank in the reporting year strengthened the at-
tractiveness of banking products and access to addition-
al services for young people and young adults. Existing
and new clients can benefit until their 30th birthday:
In addition to free accounts and debit cards, which are
already included in the basic ZKB Banking offer, ZKB
Banking Young also includes a free credit card. More
over, all clients aged 14 to 30 now benefit from the ZKB
Nachtschwärmer ticket (free public transport in Zurich
on Friday and Saturday evening from 7 p.m.) and the
ZKB Visa Debit STUcard.
Investments: Growth in the number
of mandates and positive performance
in wealth management
Responsible investing in the Sustainability Re-
port 2024: 33 ff. 53 ff. 65 f.
If you have liquid funds that you do not need, it makes
sense to invest them on the financial markets. It is import-
ant to invest savings in line with a suitable investment
strategy, particularly from the point of view of long-term
asset protection or asset growth.
We help our clients define their investment strategy
based on their financial situation, their risk appetite,
their sustainability preferences, their investment horizon
and their investment objective. Together we determine
the most suitable investment solution for their individual
needs – ZKB Discretionary Mandate or ZKB Portfolio
Consulting. This gives clients access to the expertise of
the Chief Investment Officer (CIO) and the numerous
investment experts at Investment Solutions.
In ZKB Discretionary Mandate, clients delegate the
investment decision to us. We ensure that the assets
are always invested in line with the agreed investment
strategy. The risk appetite of our clients is always at the
centre of every investment decision.
In ZKB Portfolio Consulting, we help our clients
make investment decisions by providing them with per-
sonalised investment proposals tailored to their invest-
ment strategy. Furthermore, we continuously monitor
the portfolio and inform them immediately if the port-
folio’s risk deviates from the range defined in the risk /
return profile.
We recorded further growth in the number of
wealth management mandates, while the number of
advisory mandates stagnated. The volume of invested
mandates developed positively in both wealth manage-
ment and investment advice (including performance).
The interest rate hikes of recent years had an
impact in 2024. Inflation declined in both the US and
Europe. However, as the economy remained robust, the
central banks lowered interest rates less than originally
expected. Stable profit margins and impetus from the
technology sector led to rising equity markets. Bonds
also posted price gains thanks to the interest rate cuts.
The performance of all investment strategies used
by ZKB Discretionary Mandate was positive as at the
end of the year under review. In a peer comparison of
the ARC Private Client Index provided by ARC Research,
which we have been tracking since the beginning of
2018, we are still clearly outperforming our competitors.
Growth and product expansion
for pension savings
Private pension savings in pillar 3a and vested bene-
fits foundations were also expanded in 2024.
The offering was expanded with a second vested
benefits foundation. This closes a gap in the value chain
and enables us to provide our clients with even more
comprehensive support throughout their entire wealth
management process and more effective retirement
planning. This means that the vested benefit assets can
be divided once when a person leaves a pension fund
and transferred to two different vested benefit foun
dations. The two divided credit balances can therefore
be drawn later in different years and allow greater finan-
cial flexibility.
Pension assets in ZKB’s pillar 3a and vested bene-
fits foundations have reached a milestone, exceeding
the CHF 10 billion mark in total assets for the first time
(2024: CHF 11 billion). Part of this is contributed by frank-
ly, the digital pension solution from Zürcher Kantonal-
bank, which has assets of CHF 3.8 billion (2023: CHF 2.5
billion) and over 120,000 clients (2023: 95,000).
Retirement planning offering expanded
to include estate planning
In the year under review, we further developed
our estate planning advisory service. Our new services are
aimed at clients who want to develop the right solution
for their estate planning with our inheritance specialists.
In addition to providing advice, we also draw up docu-
ments such as wills, inheritance contracts or marriage
contracts and assist with their implementation. This
completes our range of services from the free ZKB in-
heritance check to comprehensive support in inheritance
matters.
Strongly positioned in the mortgage business
Zürcher Kantonalbank is the market leader for real
estate financing in the Canton of Zurich. Competition in
41
Zürcher Kantonalbank Annual Report 2024
› Management Report
the market environment remained intense. We continue
to attach great importance to the quality of our loans
and embrace a credit policy that is geared towards con-
tinuity.
Our mortgage loans increased by CHF 5.7 billion
to CHF 106.6 billion in the year under review. This cor-
responds to an increase of 5.7 percent, whereas the
market as a whole (only banks, excluding mortgage
investment companies and insurers) grew by 2.6 per-
cent. At the end of the year under review, ZKB rollover
mortgages based on SARON accounted for 21 percent
of the mortgage portfolio (2023: 23 percent). The share
of fixed-rate mortgages (including ZKB starter mortgages
and ZKB environmental loans) in the total mortgage
portfolio was 78 percent at the end of the year.
Our implementation in the financing business
in the Sustainability Report 2024: 49 ff., 64 f.
Home ownership guaranteed
in the third phase of life
Many people approaching retirement worry about
their mortgage solution because their post-retirement in-
come usually declines. Since Zürcher Kantonalbank stands
by its clients for life, conveying a sense of security and
appreciation is a priority of the customer services provided
at Zürcher Kantonalbank. Accordingly, Zürcher Kanton-
albank not only continues to maintain the mortgages in
its clients’ third phase of life, but also increases them if
necessary – even if a client’s income decreases. Clients who
have always met their mortgage obligations and whose
mortgage does not exceed two-thirds of the value of their
property will also receive this promise in writing.
Core SME segments
Our employees assist companies through every phase
of the business life cycle and provide them with the
support they need to overcome the financial challenges
they face – from the company’s foundation to succession
planning.
Our direct bank advises commercial clients on all
aspects of day-to-day business and stands by this client
segment on matters related to payment transactions,
financing, investments and retirement planning.
As a universal bank, we offer companies the full
range of services – even in around 100 countries through
our correspondent banks if needed. Our specialised cor-
porate client advisors act as personal contacts for our
business and corporate clients for all financial matters,
dealing with their specific and complex needs.
As set out in the bank’s statutory public service
mandate, we place a great deal of emphasis on our com-
mitment to small and medium-sized enterprises (SMEs).
Thanks to our consistent lending policy, we make a signifi-
cant contribution to the functioning of the economy by
supplying credit to SMEs in the Canton of Zurich as well
as to medium-sized and large companies throughout
Switzerland.
The bank for SMEs
At the end of 2024, our clients included around
75,000 active legal entities, of which 60,000 were com-
panies (mostly SMEs) and around 15,000 were other le-
gal entities such as associations and foundations (2023:
around 72,000 legal entities, of which 58,000 were
companies and 14,000 were other legal entities). In the
Canton of Zurich, we achieve a market penetration of
over 50 percent among companies.
Our credit exposure to companies increased to
CHF 38.9 billion in the year under review, an 8.4 percent
increase year over year (2023: CHF 35.9 billion).
We see growth opportunities in expanding our
business with existing clients or through new client ac-
quisition. Occupational pensions also play a very import-
ant role, both from a company perspective and for the
individual entrepreneur.
Our implementation in the financing business
in the Sustainability Report 2024: 49 ff., 64 f.
Coronavirus loans continue to be repaid
Covid-19 emergency loans in the year under re-
view amounted to CHF 153 million. Of this amount,
CHF 144 million were Covid-19 loans and CHF 4 million
were Covid-19 plus loans from the federal programme.
After peaking at CHF 1 billion in 2020, CHF 597 mil-
lion has meanwhile been fully repaid and active limits
have been reduced by a further CHF 253 million as at
the end of 2024. Loans from the cantonal programme
came to a total of CHF 2 million. The loans that Zürcher
Kantonalbank granted at its own risk have been almost
completely repaid.
ZH SME: Support with recruitment
of specialists
With its ZH SME Initiative, the bank makes a con-
tribution towards the ongoing and sustainable success
of SMEs. To that end, it has commissioned the Zurich
University of Applied Sciences (ZHAW) to conduct an
annual study on SMEs.
Zürcher Kantonalbank publishes the findings,
collaborates with experts to take a more detailed look
at one of the SME-relevant topics and develops some
potential solutions.
Topic of the year in 2024 went again to the short-
age of trained specialists at SMEs. In two ZH SME prac-
tical seminars, Zürcher Kantonalbank conducted seven
one-day sessions covering concrete solutions for em-
ployer’s promises, brand identity, recruitment and rela-
tionship management. Companies that completed both
42
Zürcher Kantonalbank Annual Report 2024
› Management Report
seminars were given the opportunity to receive an “SME
ZHustupf” – financial support for a self-chosen meas-
ure to increase employer attractiveness. This offer was
taken up by 14 companies, with a total value of over
CHF 50,000. ZH SME also brought together givers and
seekers of advice – free of charge – under the title of
“From SME to SME”. The platform promotes dialogue
with and between entrepreneurs.
Offer for sustainably successful SMEs
After a test phase in the 2023 reporting year, in
2024 we launched our advisory service for SMEs on sus-
tainability.
This new service combines engineering and finan-
cing expertise and provides our clients with advisors from
the Reffnet network of experts, a nationwide network
accredited by the Swiss federal government that pro-
vides consultations on resource efficiency and energy.
In the in-depth expert consultation, Reffnet con-
sultants develop specific improvement measures in the
selected area on the basis of a free eco-check and pres-
ent in an expert report the estimated investment costs,
the expected cost savings and the positive environmental
impact.
Client advisors support the implementation of cor-
responding measures with their comprehensive financing
expertise and tailored financing solutions and products
– such as the ZKB environmental loan or the new ZKB
environmental leasing (zkb.ch/kmu-nachhaltigkeit, avail-
able only in German).
Start-up services in demand
New companies in traditional sectors, such as a
painting business or a medical practice, are part of the
regular financing business of Zürcher Kantonalbank. In
2024, Zürcher Kantonalbank provided CHF 31.6 million
in funding for traditional company start-ups. On top of
that, we also provide financing for innovative start-ups
(see below).
In order to help people start up their own com-
panies, we make ongoing improvements to the services
and support we offer. Zürcher Kantonalbank’s offering
comprises advisory services and ongoing client support.
We collaborate with prominent start-up services which
handle the formalities that come with company start-ups.
The bank also works closely with the “GO! Ziel
selbstständig” association, helping people to become
freelance entrepreneurs with microloans.
Start-ups and Pioneer portfolio
Promoting start-ups in the Sustainability Report
2024: p. 65
Zürcher Kantonalbank is one of the largest investors
in start-ups in Switzerland. A total of CHF 19.7 million
39
CHF 19.7
million
for 52 start-
ups and
scale-ups
Credit exposure to
companies
More than CHF 250 million for around 300 start-ups
and scale-ups since 2005
Start-up promotion
billion
CHF
50
Market penetration
%
Credit exposure
in the Canton of Zurich for companies
2022
2024
2020
28.4
2021
2023
30.7
35.9
33.2
38.9
43
Zürcher Kantonalbank Annual Report 2024
› Management Report
(2023: CHF 15.8 million) in risk capital financing was
approved for 52 promising start-ups and scale-ups
in 2024 (2023: 46). Through the Pioneer programme,
over CHF 250 million in support has flowed to around
300 innovative young companies since 2005.
In the reporting year, we successfully sold our
stake in some of our portfolio start-ups to other com-
panies. These sales included our participations in Fem-
toTools AG, Sherpany and RoomPriceGenie AG.
Partner in non-profit housing construction
Zürcher Kantonalbank is a long-standing and
reliable partner in non-profit housing construction.
Since 2022, the bank has been offering the WohnPlus
mortgage to housing cooperatives that provide special
social benefits. The WohnPlus mortgage is in constant
demand, enabling the bank to further strengthen its
position in the sector.
Our implementation in the financing business
in the Sustainability Report 2024: 49 ff., 64 f.
Support for generational changes
Thousands of Zurich-based SMEs need to work
out their succession plans and require both specialist
and financial support during this phase. Our priority is
to ensure that the generational change at SMEs is a
success, as it is also important to the economy. Inter-
ested parties can take their first steps digitally (zkb.ch/
nachfolgecheck, available only in German). We enable
a simple assessment of the current situation and offer
customised solutions or individual project support on
matters relating to succession planning.
In the reporting year, our succession experts car-
ried out 27 assessments and personally accompanied
110 entrepreneurs on the path to generational change.
In the year under review, the bank granted 55 acquisi-
tion loans totalling more than CHF 100 million.
Demand for microloans remains steady
Microbusinesses and small enterprises make an
important contribution to the vibrant Zurich economy.
We therefore ensure that these companies have access
to professional advice and a wide range of services with
fair conditions. Zürcher Kantonalbank granted more
than 3,200 noncost-covering microloans of less than
CHF 200,000 to SMEs in the year under review (2023:
over 3,000).
Leasing as a liquidity-preserving
form of financing
Capital goods leasing remains important. For
SMEs and the agriculture sector in particular, this rep-
resents a liquidity-preserving alternative to a traditional
investment loan. Zürcher Kantonalbank is a major pro-
vider of capital goods leases throughout Switzerland.
Our leasing calculator (zkb.ch/leasingrechner, available
only in German) makes the initial contact even easier.
A total of around 3,100 leasing contracts with a vol-
ume of over CHF 360 million were concluded (2023:
around 3,300 leasing contracts with a volume of around
CHF 363 million). The portfolio at the end of 2024 con-
tained more than 13,000 contracts with a volume of
over CHF 758 million (2023: more than 13,000 contracts
with a volume of around CHF 762 million). The joint dis-
tribution network with other cantonal banks continues
to prove successful.
Specialised segments
In our capacity as a universal bank, we also meet the
needs of large Swiss corporations with international op-
erations, key clients, foundations, trading companies,
large international organisations and financial services
providers, such as banks, insurance companies, pension
funds, asset managers, external asset managers, invest-
ment funds and brokers. By being active in this wide
range of specialised segments, we diversify our income,
spread our risks and provide a broad basis for the busi-
ness of the bank as a whole. In doing so, we also take
the international orientation of the Greater Zurich Area
into account.
Meeting complex requirements of large
corporations and insurance companies
In times of increasing regulatory requirements,
we see it as our task to provide services to our clients
in a secure, simple and efficient manner, and to meet
the increasing complexity of client demand with profes-
sional and effective solutions. We support our clients
as a reliable partner not only with financing via loans
or the extremely strong Swiss capital market, but also
with trade and export finance business, securities and
foreign exchange trading, payment transactions, as well
as custody and asset management.
ESG criteria are also becoming increasingly im-
portant in the financing business. In addition to existing
internal training initiatives, Zürcher Kantonalbank de-
veloped a tailored training programme for employees
in collaboration with the ZHAW in the reporting year.
Regardless of the economic situation and market
trends, we stand for continuity and consistency. With
our business model geared towards long-term client re-
lationships and our comprehensive range of products
and services, we are and will remain a reliable and solu-
tion-oriented partner.
Leading role in syndicated loans
We use syndicated loans to satisfy large-volume
financing requirements of CHF 50 million or more. In
44
Zürcher Kantonalbank Annual Report 2024
› Management Report
our role as lead bank, we bundle the financing power
of the Swiss cantonal and regional banks as well as oth-
er national and selected foreign banks. As the number
two on the national syndicated loan market, we want
to continue to grow while adhering to our proven risk
policy. Our many years of experience, our excellent bank-
ing network and our strong financing power make us a
highly valued and reliable partner for syndicated loans.
In our capacity as lead bank, we had a portfolio of
syndicated loans totalling around CHF 10 billion at the
end of 2024.
Expertise in pension fund business
The consolidation of Swiss pension funds is pro-
gressing steadily and, in our view, will continue to ac-
celerate against the backdrop of increased requirements
(regulation, integration of sustainability, efficiency, per-
formance). The demands placed on the management of
pension funds and asset management continue to grow
as a result. As one of the leading banks in this segment
and the second-largest asset manager in Switzerland,
we advise pension funds and provide them with com-
prehensive support in the form of investment, custody
and trading services, and payment transactions.
We offer training for members of boards of trust-
ees and organise annual professional and networking
events like the Pension Fund Day, which serves as a plat-
form for pension fund representatives. In addition, we
publish the Swiss Pension Fund Study every year under
the brand Swisscanto by Zürcher Kantonalbank. This
representative study has been published for more than
20 years and fulfils an important social function by pres-
enting findings on the general state of pension plans
in this country. Both the professional events and the
Swiss Pension Fund Study are recognised throughout
the industry and underline the competence of Zürcher
Kantonalbank.
In the reporting year, Zürcher Kantonalbank
further expanded its business with pension funds in
French-speaking Switzerland and opened a local sales
office in Lausanne.
Internationally networked for local clients
In today’s globally networked economy, we offer
our clients access to banking services worldwide. Foreign
trade plays an especially important role both for Switzer-
land and for the companies in the Canton of Zurich.
Having a broad range of payment and performance in-
surance products in the area of trade and export finance
is crucial for enabling clients to conduct their internation-
ally oriented business transactions safely and successfully.
To that end, we cultivate international banking
relationships in around 100 countries, meaning we are
in charge of a high-calibre network of correspondent
banks. Through our representative offices in Brazil, China,
The financial centre has changed over
the past year. How does this affect the
corporate client business at ZKB?
The market is in flux, many companies are
reviewing their banking situation and evaluating
alternatives. These are available – competition is
strong and the supply of financing solutions is
guaranteed, especially for SMEs. We are experi-
encing a significant increase in demand through-
out Switzerland from larger companies and in the
pension fund business.
ZKB wants to grow in these two segments.
Will this goal be achieved?
Yes, we are pleased with the development.
We were able to strengthen our position with
large domestically oriented companies. As the sec-
ond-largest universal bank, we cover their needs
very well. For example, with syndicated loans, in-
vestments and trading transactions. There is also a
significant demand among institutional clients for
a second strong Swiss provider. This also applies in
particular to French-speaking Switzerland, where
we opened a sales office last year.
What feedback have you received
on the ZKB presence in Lausanne?
We had already been active in the pension
fund business in French-speaking Switzerland
for some time. The fact that we now have a local
presence is seen by our clients as a strong signal
and has been very well received. A local presence
enables greater proximity, a better understanding
of needs and easier communication. Simply put:
We are fulfilling our promise to be close to you.
Three questions for:
Jürg Bühlmann, Head
of Corporate Clients
45
Zürcher Kantonalbank Annual Report 2024
› Management Report
2024 also saw us expand our collaborative partnerships
in the investment business, for example in the areas of
sell-side research. The launch of the new ZKB Research
Portal (see p. 48) and our leading position in the area of
sustainability, such as the expansion of our ESG offering
with the reports “ESG Compass Real Estate” and “ESG
Compass Credit”, supported us in this endeavour.
At the same time as launching the trading and
custody of cryptocurrencies for its own end clients,
Zürcher Kantonalbank has also been offering trading
and secure custody as a service provider for third-party
banks since September 2024. Swiss banks can there-
fore concentrate on their own end-client processes and
use the existing infrastructure and interfaces to Zürcher
Kantonalbank, which handles trading and custody, to
transmit orders. The new service also includes support
for the banks from the first day of the project through
to the productive launch.
Ideally positioned among key clients
For more than twelve years, we have been con-
ducting business with the wealthiest client segment
among private individuals and their family offices in the
Key Clients division of the Private Banking business unit.
Combining the strengths of a universal bank with
the highly customised customer service of extremely
skilled relationship managers with excellent internal and
external networks is proving to be a recipe for success.
This creates tangible strategic added value for
clients in this segment: Comprehensive solutions can
be offered, from the structuring of total assets to in-
dividual implementation. These go beyond traditional
banking solutions and also cover areas such as pensions,
taxes and inheritance law. The very good performance
seen in the year under review once again shows that this
approach is paying off. Zürcher Kantonalbank provides
support to many clients on challenging financial matters.
Accordingly, this segment contributes significantly to the
growth of assets under management and thus to the
increase and diversification of our bank’s income.
Expansion of support for foundations
and non-profit organisations (NPO)
When it comes to implementing not-for-profit
ideas and projects, non-profit organisations (NPO) play
an important role in Switzerland. The foundation and
NPO client segment has become an important business
area in recent years. The strong professionalisation of
the sector coupled with increasing complexity is leading
to a noticeable demand for external expertise. Zürcher
Kantonalbank is positioning itself in this regard as an
outstanding banking partner, both in areas such as gov-
ernance and investment strategy as well as in tailored
and sustainable investment and financing solutions.
Overall, the bank’s offering is aimed at the entire range
India and Singapore, we are also able to draw on local
knowledge to support our Swiss-domiciled clients in their
most important export markets in East Asia, the Indian
subcontinent, as well as South and Central America.
Here, some of the factors our clients appreciate
include short decision-making paths and quick decisions.
With our modernised foreign trade and export financing
software, we continue to provide a wide range of ser-
vices and even more efficient transaction processing to
those of our clients and partners in the financial industry
that are involved in foreign trade. We are also constant-
ly adding functionalities on the electronic channels to
strengthen client loyalty.
We maintain a strong network of cash correspond-
ents and custodians geared to the needs of our clients;
this network serves as a basis for the flawless, efficient
processing of clients’ international payment transactions
as well as for the trading business and asset manage-
ment. Zürcher Kantonalbank provides its clients with ac-
cess to 55 investment markets and 30 currencies through
its global network. At the same time, we grant banks
with global operations access to international payment
transactions in Swiss francs, thereby supporting the glob-
al business activities of our clients in the process.
We consider the selection and ongoing monitoring
of our business relationships to be of paramount import-
ance. To that end, Zürcher Kantonalbank focuses on
continuously strengthening its due diligence and know-
your-client (KYC) processes as well as its transaction mon-
itoring measures, which comply strictly with national and
international regulations and recommendations.
Solutions for financial services providers
in Switzerland
Cooperation with other financial services providers
in Switzerland has been a core strategic business area
of Zürcher Kantonalbank for many years. As a nationally
significant universal bank with roots in the local area and
an outstanding credit rating, we are the natural partner
for many third-party institutions.
The services we provide include solutions in all
our core businesses. These include investment and as-
set management business, trading and capital market
services, and financing.
Structural change in the financial sector and
technological advancements continue unabated. They
pose complex challenges for small and medium-sized
banks in particular. There is a growing need for strategic
collaboration through the targeted procurement of
products and services from provider banks like Zürcher
Kantonalbank, particularly in the areas of asset man-
agement, investment advice, custody and trading. The
partner banks benefit from our bank’s expertise and
innovativeness.
46
Zürcher Kantonalbank Annual Report 2024
› Management Report
200
10
Relationships with
foreign bank groups
Syndicated loans
in around 100 countries for internationally oriented
companies in the Greater Zurich Area
with Zürcher Kantonalbank as lead bank.
billion
CHF
Partner for
financial
services
providers in
Switzerland
from non-profit organisations to very large, complex
foundations. Over 1,000 organisations have already
been supported in the reporting year.
In addition, the ZKB Foundation Dialogue series of
events has become just as well established as our involve-
ment as the main shareholder in the leading digital phil-
anthropy platform StiftungSchweiz (stiftungschweiz.ch)
with the trade magazine “The Philanthropist”. Through
this commitment, the bank makes a major contribution
towards digitalising and increasing the efficiency of the
entire philanthropic sector in Switzerland.
Making a greater impact with the
ZKB Philanthropy Foundation
The ZKB Philanthropy Foundation, which was an-
nounced at the beginning of the reporting year, com-
menced its activities in the year under review. The aim
is to provide clients with an efficient and effective way
of making philanthropic commitments – from charitable
donations to establishing their own foundation within
the umbrella foundation. At the same time, Zürcher Kan-
tonalbank is directly involved as a founder by funding five
thematic funding areas with a share capital of CHF 25
million as part of the umbrella foundation.
Endowment fund launched
We developed Switzerland’s first endowment fund
in the reporting year. This is geared towards the invest-
ment needs of non-profit organisations. The investment
strategy of the endowment fund is based on a diversified
portfolio with a balanced risk profile and takes into ac-
count the strict sustainability criteria of the “Sustainable”
product line of ZKB Asset Management. The fund is in-
tended to support the objective of generating income
from assets to finance the charitable purpose.
Reliability for external asset managers
The traditional market with external asset man-
agers in Switzerland plays an important role for Zürcher
Kantonalbank. Thanks to our positioning as a reliable
partner for external asset managers, we were once again
able to build on the positive developments of recent
years and gain further market share. Our very specific
expertise, many years of experience and high level of
client focus remain central to the bank’s continued long-
term success. This success is based on the trust that cli-
ents place in Zürcher Kantonalbank. We strengthen this
through professional and personalised support, solid,
first-class expertise in the investment business by our
employees and a modern digital offering. The latter has
been thoroughly modernised and is being continuously
expanded. In the reporting year, we improved our online
banking for external asset managers and added further
functionalities, such as the foreign exchange order. As
asset managers are increasingly using third-party soft-
47
Zürcher Kantonalbank Annual Report 2024
› Management Report
ware to manage their client assets, we attach great im-
portance to the further development of our interfaces.
In this context, we have introduced an application pro-
gramming interface (API) that enables asset managers
to enter stock exchange orders via third-party software.
Private Banking International – Leading
for Swiss citizens living abroad and firmly
anchored in Europe
The Private Banking International has positioned
itself as leading in the Swiss market for Swiss citizens
living abroad. Currently, around 30,000 Swiss citizens
move abroad every year. And that trend is rising. The
bank has a comprehensive offering that meets their
need for a long-term, reliable partner capable of hand-
ling their financial affairs. As the leading financial insti-
tution for Swiss citizens abroad, Zürcher Kantonalbank
makes it possible for all Swiss citizens who move abroad
to remain or become clients of the bank.
In addition, Zürcher Kantonalbank has fulfilled all
the requirements to actively engage in cross-border mar-
keting in Germany since 2023. Around a dozen events
were held throughout Germany during the year under
review. Zürcher Kantonalbank was also able to further
strengthen its position in other selected markets in Eur-
ope in the year under review and is available to support
international clients and Swiss clients living abroad with
its own team of experts.
Producers
Custody with growth and expansion
of expertise
Custody and asset services are important basic ser-
vices for our institutional clients. These include custodian
and administrative services, securities accounting, per-
formance reporting, independent ESG reporting and in-
vestment compliance services, as well as custodian bank
services for investment funds. We also satisfy growing
demand for front- and mid-office support, such as the
automated delivery of transaction, position and price
data into asset managers’ systems or the timely trans-
mission of settlement instructions.
Our focus is on the digitalisation of business
services, i. e. the development of APIs for connecting
third-party systems as well as the enhancement of user
interfaces on the web. Zürcher Kantonalbank is a found-
ing member of the Open Wealth Association, which aims
to define and operationalise an Open API standard for
the global wealth management community. The agreed
standard will be implemented via bidirectional interfaces
such as bLink, the open finance platform operated by
SIX. Zürcher Kantonalbank also offers a platform solu-
tion that provides institutional clients and asset man-
Ms Schnydrig, you have been more
visible beyond the cantonal and national
borders with the Private Banking division
for around two years now. What is
the background to this?
We would like to raise awareness of our
Private Banking services at ZKB in Switzerland and,
since we have the simplified exemption, also in
Germany. We offer our clients an integral value
chain that takes into account all aspects relevant
to their assets. This offer is in great demand – even
outside our canton.
Where are you active?
We operate from Zurich throughout Switz-
erland and in selected markets abroad – primar-
ily in Europe. We also look after Swiss nationals
living abroad, provided the country is not on our
restricted list. Prudent risk management and the
preservation of our excellent reputation are top
priorities in all our activities.
What is your goal?
As a reliable financial partner, we want to
offer our clients excellent advice that is close to
their life situation, reflects their individual values
and allows them to benefit from our excellent in-
ternal and external network. In line with our range
of services, we strive to continuously diversify
ZKB’s income base in the Private Banking business
unit in order to ensure continuity and stability.
Three questions for:
Florence Schnydrig
Moser, Head of Private
Banking
48
Zürcher Kantonalbank Annual Report 2024
› Management Report
Expansion of the equity and credit research
coverage
The equity and credit research team expanded in
the year under review its already extensive coverage of
issuers with equity, credit and ESG ratings by initiating
coverage of 6 public companies, 2 real estate funds and
6 bond issuers. With its ratings, the research of Zürcher
Kantonalbank thus covers 98 percent of the market cap-
italisation of the Swiss Performance Index, 76 percent
of the domestic borrowers present on the market and
almost 100 percent of the outstanding bond volume, as
well as almost 100 percent of the market capitalisation
of the listed Swiss real estate segment.
Launch of the new “ZKB Research Portal”
With the launch of the “ZKB Research Portal” in
the reporting year, we offer institutional clients simple
and direct access to our research services. Once regis-
tered, users have access to research publications, analyst
models and company profiles of the companies covered
by the research, as well as to our extensive research
library. In addition, research recipients can set up e-mail
alerts to be informed immediately about new research
publications on specific sectors and companies.
Platform for companies and investors
Zürcher Kantonalbank promotes dialogue between
companies and investors by organising investor events,
production tours and more than 150 roadshows per year.
The Swiss Equity Conference and the Swiss Real Estate
Conference, attended by a total of over 90 listed Swiss
companies and real estate funds as well as 600 partici-
pants, are a highlight every year. This holds particularly
true for our Tier 1 clients, as we can offer them access to
the top management of listed Swiss companies through
one-on-one meetings. With over 100 participants, this
year’s bondholder event on the focus topic of “Banks”,
at which the 23rd edition of the “Swiss Rating Guide”
was also presented, set a new attendance record.
Trading and Capital Markets division
achieves outstanding results
We are Switzerland’s leading provider in the trading
business as well as in the issuing of debt capital and equity
instruments (capital market). In trading, we cover all of
the important products and asset classes, such as equities,
foreign currencies, precious metals, interest rate and credit
instruments, as well as structured products. In a consoli-
dating market environment, we position ourselves as an
“insourcer” in our domestic market of Switzerland and
provide our clients with our integrated value chain and
cutting-edge interfaces. The Trading and Capital Markets
division is also an important service provider for the parent
company.
agers with enhanced digital access to their assets, giving
them more efficient, comprehensive tools for managing
and controlling those assets.
Efforts to develop new, innovative solutions – of-
ten in close cooperation with our clients – as well as
our broad range of services enabled us to once again
achieve very good growth in new assets as well as in
custody and custodian bank clients in an increasingly
saturated market. The merger among the big banks has
prompted several custody clients to review their man-
dates and put them out to tender again on the market.
Thanks to our comprehensive range of services and our
many years of expertise, we are in an excellent position
to attract interested parties to the custody services of
Zürcher Kantonalbank.
In the reporting year, Zürcher Kantonalbank ac-
quired Complementa AG, a company specialising in
investment reporting services, as part of its corporate
succession. Discerning custody clients want tailored,
high-quality and individually configurable investment
reporting. To date, we have provided this service for our
own clients in co-operation with Complementa AG. The
takeover enables us to further expand our expertise in
the custody sector and offer the entire range of services
from a single source.
Leading provider of research
on Swiss companies
Zürcher Kantonalbank’s research covers 191 public
companies, real estate funds and investment founda-
tions nationwide, as well as 184 bond issuers – more
than any other institution in Switzerland. That means
our 27 analysts make up the most important research
team in the country. Thanks to its broad coverage and
close contact with companies, our team of experts has
in-depth knowledge of the Swiss market and publishes
research with insights that create added value. What’s
more, our ratings are essential for a large proportion
of the issuers in the Swiss Bond Index (SBI). Our share
recommendations outperformed their respective bench-
marks again this year.
Further expansion of our sustainability
research
We published a substantial number of compre-
hensive reports in 2024 that comprised 127 studies and
83 “ESG Insights” reports. With the “ESG Compass
Credit” and the “ESG Compass Real Estate” reports, we
evaluated 157 domestic bond issuers as well as 14 listed
real estate companies, 30 listed real estate funds and
12 unlisted real estate investment foundations for the
first time according to our ESG approach with regard to
their sustainability and awarded them an ESG star rating.
49
Zürcher Kantonalbank Annual Report 2024
› Management Report
There was no positive impetus for the global economy
at the start of the year, although the equity markets
performed well and the central banks delayed interest
rate cuts. Key interest rates in Switzerland were lowered
in March for the first time in nine years, and the SNB
thus initiated a progressive cycle of interest rate cuts
earlier than expected. Apart from a brief but sharp rise
in equity volatility in particular in the summer and in
the volatility of short-term interest rates in the run-up
to further key interest rate decisions by central banks,
the trend of rather favourable equity markets and fur-
ther falls in interest rates continued unabated over the
course of the year.
Against this backdrop and thanks to prudent risk
management, the Trading and Capital Markets division
achieved a result in line with the long-term average. It
should be noted that certain significant revenue compo-
nents are booked under commission or interest income
rather than trading income.
The bank achieved a record result in equity bro-
kerage. In the Equity Capital Markets business, we acted
as lead manager for 14 transactions of issuers listed on
the SIX Swiss Exchange and in other functions and / or
on other exchanges for another 9 transactions, making
us the market leader in Switzerland.
On debt capital markets, Zürcher Kantonalbank
managed the issue of 117 bonds worth CHF 21.5 billion.
We are the market leader in the CHF domestic segment.
Additionally, 44 transactions worth CHF 10 billion were
carried out for the Central Mortgage Bond Institution of
the Swiss Cantonal Banks.
The structured products business developed fa-
vourably and recorded a marked increase in income
compared to the challenging previous year. By contrast,
the business with interest rate instruments recorded a
market-related decline in a very challenging year. Trading
in foreign exchange and precious metals achieved good
results in a multi-year comparison. In the securities lend-
ing, repo and money market business, revenues were
down compared with the previous year.
The result from trading activities (excluding com-
mission and interest income) amounted to CHF 353 mil-
lion in the year under review, 15.1 percent below the
previous year’s level. On average, market risks in the
trading book (value at risk) amounted to CHF 12 million
in 2024.
Asset Management reports steady growth
and market share gains
Responsible investing in the Sustainability Re-
port 2024: 33 ff. 53 ff. 65 f.
With over 270 specialists, Zürcher Kantonalbank’s Asset
Management is the competence centre in charge of the
development and management of investment solutions,
297
Billion Swiss francs in
assets under management
at ZKB Asset Management
Bond issues
Over CHF 31.5 billion and 14 equity markets
transactions as lead manager.
Leading
provider in
sell-side
research
161
50
Zürcher Kantonalbank Annual Report 2024
› Management Report
Longevity, Digital Economy and Circular Economy were
added. The three new funds are categorised as Article
9 funds under the EU’s Sustainable Finance Disclosure
Regulation (SFDR) and thus expand our most sustainable
product line, “Sustainable”.
Innovations and awards
Achieving the net-zero target calls for innovative
business ideas and technologies. One milestone in 2022
was the launch of the Decarbonisation thematic private
equity fund. This fund allows investors to make target-
ed investments in companies promoting business ideas
that reduce greenhouse gases, thereby promoting the
economy’s climate transformation at the same time. The
closing of the subscription was in 2024 with a total in-
vestment amount of around CHF 130 million.
It was also significant that six of our sustainable
funds once again received the FNG seal, an independent
label from the Forum Nachhaltige Geldanlagen (FNG) for
investments that take ethical and environmental factors
into consideration. This prestigious award is regarded as
a seal of quality for sustainable investments and is held
in particularly high esteem in Germany, Austria and
Switzerland. Since the first submission of four funds in
2022 and two further funds in 2023, these funds have
been awarded the top rating straight away and con-
firmed annually.
Responsible voting behaviour and
engagement
The Swisscanto fund management companies ac-
tively exercise their voting rights for the shares included
in our active and passive investment funds. We update
our sustainable voting policy on an annual basis. This
includes, for example, supporting relevant shareholder
proposals at annual general meetings and promoting
ESG best practice standards. Our voting guidelines and
voting behaviour are published online.
Our investment stewardship is built on three pil-
lars, regardless of whether we have invested in equities
or fixed-interest securities: Through direct dialogue, we
promote responsible corporate governance at com-
panies in which we have significant investments.
Through collaborations, we help to promote the UN Sus-
tainable Development Goals (UN SDG). Through global
commitment, we advocate for the principles of the UN
Global Compact.
such as investment funds and individual, institutional
mandates. As such, Asset Management provides pro-
fessional and innovative investment solutions to meet
client needs in Zürcher Kantonalbank’s various business
units. It also provides clients with support in connection
with technical issues and sales.
Thanks to strong net new asset growth of CHF 24
billion and a positive market trend, assets under man-
agement increased by 20.7 percent over the course of
2024. They amounted to CHF 297 billion at the end of
the year. According to Swiss Fund Data, this enabled
the Asset Management division to increase its share in
the Swiss funds market to 10.67 percent in 2024 (2023:
10.18 percent).
Institutional business performed particularly well.
According to the Asset Management Guide 2024 pub-
lished by Investment and Pensions Europe (IPE), a major
European publication for institutional investors and those
running pension funds, Asset Management of Zürcher
Kantonalbank ranks 16th among the largest providers
in the institutional sector in Europe (2023: 20th place).
Swisscanto with a new brand identity
The Swisscanto product brand has been managed
under the brand umbrella of Zürcher Kantonalbank since
the reporting year. The former red lettering has been
replaced by the blue of Zürcher Kantonalbank. Its new
presence also focuses on our proven expertise in the field
of sustainability. By adapting and bringing the product
brand closer to Zürcher Kantonalbank, Swisscanto
should benefit from the latter’s brand awareness and
trust. It also enables a unified external image and more
efficient brand management.
Further expansion abroad in
the wholesale business
In wholesale distribution, Swisscanto collective in-
vestments are placed in the product range of financial
services providers and distributed by them to their end
clients. This distribution channel is very important for
Zürcher Kantonalbank Asset Management, both in
Switzerland and abroad. An established sales organisa-
tion already exists abroad in Germany. This year, the sales
organisation in Italy was also expanded with a new sales
team and a branch office in Milan. This strategic expan-
sion is intended to make the existing products accessible
to a significantly larger target group.
Launch of sustainable thematic funds
With the launch of three new thematic funds, the
range of thematic funds offered by Zürcher Kantonal-
bank Asset Management has been further expanded and
has gained strategic importance for our growth ambi-
tions. In addition to the existing thematic funds Climate,
Water and High Quality, the new thematic funds Healthy
51
Zürcher Kantonalbank Annual Report 2024
› Management Report
Mr Deplazes, Asset Management
opened a new location in Milan at the
beginning of 2024. What strategy
are you pursuing with this?
The expansion of international sales is an
important strategic priority. Abroad, we are pur-
suing the ambition of achieving economies of
scale and diversifying our client base. We can
already reap the rewards here: International fund
sales have increased considerably and make a sub-
stantial contribution to our overall result.
What does your strategy involve
beyond that?
In addition to expanding our sales network,
we are continuously developing our expertise in
sustainable investments. In 2024, for example, we
expanded our range to include three new thematic
funds focusing on the digital economy, healthy
longevity and the circular economy. These invest-
ment strategies look for companies that can both
benefit from these long-term trends and address
the challenges of sustainable development.
How do you assess the course of business
over the past 12 months?
We have recorded strong growth in assets
under management. We have become the num-
ber two provider in Switzerland with the Swiss-
canto brand and we are one of the top-selling
asset managers in Europe. As a business area, we
make a significant contribution to the success of
Zürcher Kantonalbank. This is our contribution to
diversifying the group’s income and risks.
Three questions for:
Iwan Deplazes, Head of
Asset Management
52
Zürcher Kantonalbank Annual Report 2024
› Management Report
Employees
We offer our employees a great deal of creative freedom
in a dynamic and digital environment. As one of the
canton’s largest training centres, we also make it possible
for numerous young adults to enter a wide range of
professions in banking and IT.
Zürcher Kantonalbank is a popular and attractive employ-
er. Our culture is characterised by a sense of responsibil-
ity, our focus on performance, fairness and respect. We
take our corporate responsibility seriously by encourag-
ing our employees to take responsibility for their own
actions, paying fair market compensation and offering
flexible working arrangements to help employees strike
a healthy work-life balance.
Unless indicated otherwise, the figures and infor-
mation below relate to the parent company (excluding
subsidiaries and their subsidiaries).
Detailed information on the personnel structure
and other key personnel figures: Sustainability
Report 2024 p. 69 ff.
Headcount
The group’s headcount rose by 240 in 2024, from
5,539 to 5,779 full-time equivalents (FTE). 10 full-time
equivalents were filled by temporary employees. The
group employs a total of 6,607 people. 341 employees
were at the parent company on an apprenticeship or
high school internship.
High level of identification
with the company
We have a high level of employee commitment and
low staff turnover (2024: 5.5 percent, 2023: 6.1 percent).
Our employees also actively act as brand ambas-
sadors by carrying over into their personal lives our cor-
porate culture and our corporate values as well as their
enthusiasm for working in the bank.
This positive image should help ensure that we are
widely perceived as an employer of choice.
Employee satisfaction survey
confirms commitment
We conduct our employee satisfaction survey every
two years. The survey was last conducted in 2023.
The response rate, which serves as an indicator of
employees’ willingness to provide direct feedback, was
at a very high level in 2023: 8 out of 10 employees com-
pleting the questionnaire in full. We view this high level
of participation as an expression of an open feedback
culture.
The Commitment Index, which comprises six in-
dividual questions, provides information on how satis-
fied employees are with Zürcher Kantonalbank as their
employer and how strongly connected they feel to the
company. At an average of 77 out of 100 points, this
score remained at nearly the same high level. These pos-
itive results were received throughout all of the business
units. (The rating scale has been adjusted since the pen-
ultimate survey in 2021. An index of 89 on the previous
scale corresponds to a score of 78 on the new scale).
The survey also gave us insights into what drives
commitment and helped us gather and address our em-
ployees’ concerns.
Leadership 2030
We are continuing to develop our culture as one
of the bank’s six strategic priorities. As an important
part of this, we further developed our understanding of
management throughout the bank in the reporting year.
Based on the bank’s vision, strategy and values, it refers
to the bank’s ambition for 2030 and serves as a central
management tool for achieving it.
53
Zürcher Kantonalbank Annual Report 2024
› Management Report
Performance & Development
In order to keep pace with the changes in our environ-
ment as Zürcher Kantonalbank and to live and imple-
ment our understanding of leadership in everyday life,
we have revised Performance & Development (P & D).
The aim of the further development of P & D following
its launch seven years ago is process simplification, in-
creased commitment and consistency within the bank.
The development of all our employees lays the
basis for individual and collective performance and, by
extension, for our corporate success. This is why we are
strengthening the dialogue between managers and em-
ployees in particular. An in-depth feedback and develop-
ment dialogue between employees and their supervisors
was established twice a year as a new tool. The regular
short meetings will remain as such and will also be man-
datory in future.
Both conversations aim to discuss performance
and conduct and to explore individual development op-
portunities.
By setting a framework, we create commitment
and a basis for all employees and managers. At the same
time, we allow a high degree of freedom in the imple-
mentation so that we can continue to act according to
the situation and needs.
Promotion of training and further education
We find it extremely important that our employees
continually expand their technical, methodological and
social skills. We provide a wide range of internal classes,
workshops, podcasts and videos, among other things, as
well as the opportunity to attend external training and
development courses.
We invested CHF 12.3 million in basic training
and further education in the year under review (2023:
CHF 11.1 million). Each employee spent an average of
14 hours on internal training and further education
(2023: 18.6 hours). 914 employees (16.7 percent) are
currently taking part in a training course (2023: 830 em-
ployees, 15.6 percent). We are continuously expanding
our proven learning portal geared toward self-study to
ensure that it continues to provide a needs-based range
of courses to promote our employees’ development and
make them fit for the future.
Talent management –
high potential community
In connection with the further development of
P & D, the portfolios have also been revised. The new
“High Potentials” portfolio distinguishes between po-
tential for management and specialist careers.
Continuous dialogue shows what potential our
employees have and where their strengths lie. We there-
fore invest heavily in a comprehensive talent manage-
430
One of the largest training centres
in the canton
Turnover rate
Large
regional
employer
Loyal
employees
Apprenticeships
2022
2022
2024
2024
2020
2020
5,766
4.5 %
2021
2021
2023
2023
5,662
5.9 %
6,086
6.1 %
5,790
6.4 %
6,291
5.5 %
Number of employees
at the parent company
as at 31 December
54
Zürcher Kantonalbank Annual Report 2024
› Management Report
ment programme. Our aim here is not just to train young
people, but to promote lifelong learning at all levels.
Zürcher Kantonalbank has been offering an ex-
tensive networking and development service – its Talent
Community – for all employees defined as high poten-
tial. It is structured to match our talent management ob-
jectives and includes personal development, networking,
visibility and inspiration. The aim is to contribute to the
further development of the bank.
At the same time, we view the internal Talent
Community as complementary to our external talent
acquisition and recruitment activities. Employees with
special potential, excellent performance levels and
exemplary conduct are offered special opportunities.
18 employees were given the opportunity in the year
under review to proceed with their personal and pro-
fessional development in tailored support programmes.
Wide range of offers for young professionals
With 430 apprenticeships, we are one of the
largest providers of vocational training in the Canton of
Zurich. The majority of the vocational training we offer
is in the areas of banking and IT.
Attractive apprenticeship programme
– even after graduation
74 apprentices began their apprenticeships in 2024
after the new commercial training reform took effect.
Added to those are 14 IT apprentices specialising in ap-
plication and platform development and two apprentices
each in the areas of mediamatics and digital business
development.
The highlight for nearly 90 of our first-year ap-
prentices was the traditional one-week apprentice camp
in the sports resort of Fiesch, Valais. One focus was on
managing your own resources during the apprenticeship.
In addition to apprentice camp, apprentices can
look forward to one special day every year of their ap-
prenticeship. The first year of their apprenticeships fea-
tures a sustainability day, there is an art and creativity
day in the second year, and the third year includes an
innovation day.
77 commercial bank apprentices and 13 IT ap-
prentices graduated, with 46 of them also earning their
vocational baccalaureate.
We were once again able to meet our main ob-
jective of continuing to employ young employees in the
bank after they have completed their apprenticeships. Of
those apprentices in the year under review, 95.5 percent
chose to pursue a career within the bank and gain more
valuable professional experience.
Programmes for high school and
university graduates
In addition to apprenticeships, we also offer in-
ternships for vocational school, high school and IMS
graduates, as well as trainee programmes for university
graduates and graduates of apprenticeship programmes.
In its second iteration, the summer internship pro-
gramme for students proved popular once again. The
ten-week programme gave 20 students an insight into
the bank, enabling them to gain some initial profes-
sional experience and build a network. We were able
to convince several participants to stay on with us as
employees.
There were 60 interns and about 89 trainees
working at the bank in 2024. All high school graduates
completed their internships successfully.
The bank sparks young people’s interest in work-
ing in IT. The Information Technology Days were attend-
ed by around 124 young people, including 37 girls.
Employer commitment
Equal opportunities –
diversity, equity & inclusion
Zürcher Kantonalbank aims to achieve equal op-
portunity for all employees and is committed to a shared
understanding of diversity, equity and inclusion (DE & I).
We believe that the diversity of our employees offers
the bank substantial added value. Furthermore, it re-
flects our equally diverse client structure. We are firmly
committed to fairness and respect and promote equal
opportunities – regardless of age, gender, sexual orien-
tation, nationality, religion and physical impairment. We
have the following DE & I networks: Women’s Network,
Queers & Peers, the Mensch* network (for employees
with disabilities) and a Co-Lead Network (job sharing
in management). Zürcher Kantonalbank has the LGBTI
Quality Seal.
Diversity, equity & inclusion was enshrined in the
2030 public service mandate (see p. 7) as a component
of corporate sustainability.
At the end of the year under review, women made
up 36.9 percent of the workforce (2023: 37.0 percent).
The percentage of women in middle management was
38.2 percent (2023: 37.8 percent), with 19.0 percent in
senior management (2023: 17.9 percent).
Focus on gender equality
The bank fulfils its social responsibility and is com-
mitted to ensuring gender equality in management and
junior staff. The Executive Board has decided to imple-
ment accompanying measures in order to achieve the
bank’s gender diversity targets. Taking suitability into
account, by the end of 2026 the proportion of women
55
Zürcher Kantonalbank Annual Report 2024
› Management Report
at the second most senior level of management should
be 20 percent and 30 percent at the third most senior
level. Another goal is to strike a balance in the gender
distribution in the trainee programmes. The Diversity
Steering Committee decides on measures and monitors
the achievement of objectives.
Externally, we are a member of the Advance gen-
der equality network, where Florence Schnydrig Moser,
Head of Private Banking and member of the Executive
Board, sits on the Board.
Specifically targeting female talents
for careers in IT
To address the IT skills shortage, specifically tar-
geting female talents is more important than ever. IT is a
professional field with a future and it is being shaped by
young people. With around 1,000 employees, Zürcher
Kantonalbank is one of the largest IT employers in Switzer-
land. Our 2024 Information Technology Days were very
successful again. Held in the middle of Zurich’s District 5,
they make the multifaceted world of information tech-
nology tangible for students, school classes and teachers
in both secondary schools and high schools. A virtual
programme was offered for school classes that featured
daily events on key topics for students in senior grades,
and on Friday events were focused on girls.
National Future Day is held every November and
offers girls and boys from grades 5 to 7 an opportunity to
accompany their parents to work. Half-day programmes
were offered at the main sites. The special “Mädchen
Informatik-los!” project proved very popular once again.
In this project, IT-savvy girls spent half a day each gaining
an insight into IT professions.
Increasing awareness of people
with disabilities
Founded in 2022, the Mensch* network provides
a knowledge platform for employees with and without
disabilities. In this way we promote dialogue between
all employees to raise awareness of what it is like to live
with a disability and break down barriers. The mem-
ber of the Executive Board responsible for this is Remo
Schmidli, Head of IT, Operations & Real Estate.
Work-life balance
We want our employees to be able to find a
healthy balance between their professional commit-
ments and their personal lives. To do that, we offer them
flexible working models. The combination of manage-
ment and part-time work is becoming increasingly im-
portant for both men and women.
Demand for co-lead roles remains strong. This
means that two managers share one management func-
tion. 23 employees currently work in a co-lead function.
In total, 29.8 percent of our employees work on a part-
time basis. We have also seen a slight increase in the
number of part-time employees working in middle and
senior management. The percentage of women working
in senior management positions has likewise increased
again.
We find it extremely important that our female
employees return to us after their maternity leave. Our
maternity concept strengthens this intention. In addi-
tion, we provide financial support for employees with
certain workloads who have one or more children in
daycare while they are working. Around 111 fathers took
the two-week paternity leave.
Political engagement
Zürcher Kantonalbank supports employees if they
choose to hold a political office. A total of over 100 em-
ployees are involved in politics. Through this commit-
ment, they make a valuable contribution towards em-
bedding our bank in both the political and social realms.
The bank supports these non-profit activities by offering
up to one month’s worth of paid days off without any
reduction in annual leave, for example. As an expression
of the appreciation we have for the commitment shown
by these employees, the Chairperson’s Committee or-
ganises the “Politics and Commitment” event every year.
This year, the event took place in the Bullinger Church
in Zurich’s District 4, the current meeting place of the
Cantonal Parliament.
Health
Our systematic approach to health management
makes an important contribution to the work-life bal-
ance and well-being of our employees. An important
aspect of our commitment as an employer is preventive
healthcare and health promotion.
In 2023, we received the Friendly Work Space la-
bel for the fourth consecutive time, which is valid for
three years. Our systematic health-related offers in-
clude financial support for health checks, free flu vac-
cinations in collaboration with the Swiss Association of
Pharmacists, and support for sporting activities such as
the health-promoting Swiss-wide “Bike to Work” cam-
paign.
The health room in the Hard office building of-
fers a varied programme throughout the working week
featuring a variety of different sports and relaxation
courses.
We also provide our employees with ergonom-
ically designed workplaces, as well as rest and massage
rooms. What’s more, if they find themselves in stress-
ful situations, our employees can take advantage of a
free and anonymous external counselling service. We
are constantly optimising our measures with the aim of
helping our employees to stay fit and healthy.
56
Zürcher Kantonalbank Annual Report 2024
› Management Report
In the year under review, we reported 7.1 lost days per
employee as a result of sickness or occupational and
non-occupational accidents (2023: 6.4 days).
Integration
We also pay special attention to employees with
health problems. We provide close, personal and profes-
sional support to affected employees and take steps that
enable them to maintain or restore their ability to work.
In 2024, we were able to offer temporary jobs to
several people under tailored integration programmes
for people with disabilities. In total, nearly 1 percent of
our employees received support that enabled them to
re-enter the workforce during the year under review.
Annual report of the employee
representation committee for 2024
The employee representation committee (ERC)
consists of five members and represents the interests
and rights of employees vis-a-vis Zürcher Kantonalbank
as employer. It promotes open dialogue and communica-
tion about different opinions, viewpoints and interests.
The responsibilities of the ERC include: performing
tasks and competences arising from participation rights,
monitoring compliance with participation rights and
initiating any necessary adjustments, representing the
collective interests of employees, regularly exchanging
information with the employee committee, its members
and employees, formulating employee concerns and re-
quests for the attention of the employer and supporting
individual enquiries from employees.
By performing these tasks, the ERC is able to rec-
ognise employee concerns at an early stage and address
them to the Executive Board and the People & Culture
management so that they can be incorporated into
the bank’s concepts, directives and decision-making
principles.
The compensation model was adjusted in the
2024 reporting year. The ERC was involved in the pro-
cess and was able to represent employees’ interests.
Components of compensation
Our employees are compensated according to
the total compensation approach. Their compensation
consists of a base salary, variable compensation based
on the performance of the group, as well as statutory
allowances and additional voluntary benefits. For more
information, please see the Compensation Report.
Pensions
In the year under review, the Pension Fund of
Zürcher Kantonalbank covered 6,039 active insured
persons and 2,282 retirees. As at 31 December 2024,
it managed assets of approximately CHF 5.626 billion
and had a coverage ratio of 116.0 percent (unaudited).
For further information on occupational pensions and
employee benefits, please see Note 13.
57
Zürcher Kantonalbank Annual Report 2024
› Management Report
Business Development
2024 – A result characterised by interest
rate hikes, excellent securities trading and
investment activities as well as the
introduction of the OECD minimum tax
The consolidated profit before taxes totalled
CHF 1,289 million, 3.4 percent higher than in the previ-
ous year (CHF 1,246 million). At consolidated profit level,
the impact of the OECD minimum tax newly introduced
in 2024 is evident, amounting to CHF 156 million. As a
result, the consolidated profit stands at CHF 1,120 mil-
lion, which corresponds to a decrease of 9.5 percent or
CHF 118 million compared to the excellent previous year.
Net interest income was unable to match the
exceptional level of the previous year. Rather, this was
strongly characterised in 2024 by the four interest rate
hikes by the Swiss National Bank (SNB). With a decrease
of 7.7 percent compared to the previous year, the net
result from interest operations amounted to CHF 1,680
million.
The commission business and services present
a very favourable picture. At CHF 1,024 million, they
achieved their best result ever and, with a 33.1 percent
share of operating income, make a correspondingly pos-
itive contribution to the bank’s overall result.
Due to the significantly lower market momen-
tum over the entire financial year, the trading result of
CHF 353 million is below the previous year’s figure of
CHF 415 million. Only the result from trading in shares
and structured products exceeded the previous year’s
result.
Operating expenses of CHF 1,731 million increased by
3.1 percent or CHF 52 million compared to the previous
year. After taking into account depreciation and amorti-
sation, value adjustments and changes to provisions, as
already mentioned, the pre-tax group result was a pleas-
ing CHF 1,289 million (up 3.4 percent).
Analysis of earnings
Gratifying net interest income
Gross interest income amounted to CHF 1,737 mil-
lion, corresponding to a 7.1 percent or CHF 132 million
lower result than in the previous year. Interest opera-
tions were characterised in particular by the SNB’s four
interest rate hikes. While interest income in the lending
and mortgage business, as well as the volume, devel-
oped favourably, declining interest income in the deposit
business was the driving factor behind the lower gross
interest income.
At CHF 57 million, the line item Changes in val-
ue adjustments for default risk and losses from interest
operations shows a slightly higher net allocation than in
the previous year (CHF 49 million). At CHF 32 million, the
creation of individual value adjustments was lower than
in the previous year (CHF 52 million). On the other hand,
the value adjustments for expected losses were higher in
the current year, with a net allocation of CHF 20 million.
This development is due to the growth in lending volume
and the deterioration of individual client ratings, while a
net release of CHF 4 million was recorded in the previous
year. The latter was due to the turnaround in interest
58
Zürcher Kantonalbank Annual Report 2024
› Management Report
rates, which led to a significant shortening of terms for
new mortgage loans.
Overall, this led to a net result from interest op-
erations totalling CHF 1,680 million, which is CHF 140
million or 7.7 percent lower than the previous year’s fig-
ure.
Record-high result from the commission
business and services
At CHF 1,024 million, the result from commission
business and services is 8.9 percent or CHF 84 million
higher year-on-year, which represents an all-time high.
This was due in particular to the development of the
largest income component, commission income from
securities trading and investment activities. This amounts
to CHF 1,152 million, an increase of 12.8 percent com-
pared to the previous year. The favourable stock market
environment, combined with the pleasing growth in as-
sets under management, both in the current and previ-
ous year, was the driving factor behind the record-high
result. Commission income from lending activities also
contributed to the positive result, which at CHF 77 mil-
lion was around CHF 5 million or 7.0 percent higher than
in the previous year.
By contrast, commission income from other servic-
es decreased by CHF 12 million to CHF 148 million, due
in particular to the introduction of free everyday bank-
ing on 1 January 2024. Commission expenses totalled
CHF 353 million, compared with CHF 314 million in the
previous year.
Moderate trading result
At CHF 353 million, the result from trading activ-
ities was unable to match the previous year’s very strong
result (CHF 415 million). The previous year’s result had
benefited from the market situation in the first half
of the year. In the 2024 financial year, however, mar-
ket momentum was subdued and opportunities were
lacking, particularly in the fourth quarter. Only the re-
sult from trading in shares and structured products, at
CHF 79 million, exceeded the previous year’s result by
41.6 percent. The other income components all declined.
At CHF 93 million, the result from trading in bonds, in-
terest rate and credit derivatives in particular was CHF 59
million or 38.8 percent lower than in the previous year.
For further information, please see Note 32 to the
Financial Report.
Outcome very pleasing in other result
from ordinary activities
The other result from ordinary activities stands at
CHF 32 million, up CHF 13 million or 71.2 percent over
the previous year.
The following two components in particular rep-
resent significant differences compared to the previous
year: Firstly, the market-related value adjustment of
financial investments was CHF 9 million lower at CHF 4
million. Secondly, one-off income of CHF 4 million was
realised from the sale of properties acquired as part of
mortgage liquidations.
40
Interest and dividend income from financial investments
4,339
Interest and discount income
1,737
Gross interest income
Interest expense
– 2,642
Net result from interest operations
1,680
– 57
Changes in value adjustments for default risk and losses from interest operations
0
500
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
01 Breakdown of result from interest operations in CHF million
59
Zürcher Kantonalbank Annual Report 2024
› Management Report
Operating expenses increase in line
with expectations
Operating expenses of CHF 1,731 million increased
by 3.1 percent or CHF 52 million compared to the pre-
vious year. Growth in both personnel, general and ad-
ministrative expenses is therefore within the planned and
expected range.
Around CHF 43 million of the growth is attribut-
able to personnel expenses, which rose by 3.7 percent
year on year to CHF 1,223 million. This is mainly due to
the higher headcount (FTEs up 4.3 percent).
At CHF 33 million, office space expenses are on a
par with the previous year. By contrast, costs for informa-
tion and communications technology were significantly
higher, rising from CHF 180 million to CHF 193 million
compared to the previous year. The higher IT costs are
also mainly due to the increase in the number of employ-
ees, which is reflected in licence fees and maintenance
costs. The costs for other operating expenses decreased
by 1.6 percent or just under CHF 5 million to CHF 272
million, although this did not fully compensate for the
higher IT costs. At CHF 508 million, general and admin-
istrative expenses are therefore also slightly higher than
the previous year (CHF 499 million).
For further information on personnel, general and
administrative expenses, please see Notes 34 and 35 to
the Financial Report.
Overall lower value adjustment
and amortisation expenses
Expenses in connection with value adjustments
on participations and depreciation and amortisation of
tangible fixed assets and intangible assets in the year un-
der review amount to a total of CHF 72 million, slightly
lower than the previous year (CHF 75 million). This is
mainly due to the value adjustments on participations,
which at CHF 4 million are 48.0 percent lower than in
the previous year. Depreciation on bank premises and
other real estate also declined (minus CHF 3 million).
Higher expenses resulted from goodwill amortisation of
CHF 12 million in connection with the investment in
Complementa AG, a new subsidiary that provides in-
frastructure for investment reporting. Amortisation of
intangible assets of just under CHF 3 million, on the
other hand, remained at the previous year’s level.
Changes to provisions and other value
adjustments and losses
Value adjustments and provisions are recognised
to the extent necessary to cover default risks and any
other identifiable risks.
For 2024, changes to provisions and other value
adjustments and losses show a creation of CHF 8 million,
in contrast to a release of CHF 28 million in the previous
year. This significant change is due to the development
of provisions for default risks on credit lines granted, for
which there were major reversals in the previous year.
For the changes in value adjustments for default risks
and losses from interest operations, please see the sec-
tion on interest operations.
Consolidated profit before taxes
At CHF 1,289 million, the bank was able to achieve
an outstanding consolidated profit before taxes. This is
CHF 43 million higher than the previous year, whereby
reserves for general banking risks totalling CHF 225 mil-
lion were formed in 2023 to strengthen equity due to
the exceptional result.
1,024
77
Lending business
1,152
Securities trading and investment activities
– 353
Commission expense
Total result from commission business and services
Other services
148
0
200
600
800
1,000
1,200
1,400
1,600
400
02 Breakdown of result from commission business and services in CHF million
60
Zürcher Kantonalbank Annual Report 2024
› Management Report
34
48
93
153
146
159
0
50
100
150
200
250
300
450
350
400
2024
2023
Total
353
Total
415
56
79
Higher tax expenses due to
OECD minimum taxation
Tax expenses totalled CHF 168 million and were
therefore significantly higher than in the previous year.
The change is attributable mainly to the introduction of
OECD minimum taxation, which will be levied for the
first time in 2024 in the form of a supplementary tax.
For 2024, the OECD minimum tax amounts to CHF 156
million. The OECD minimum tax is credited in full to the
canton when determining the dividend to the canton and
municipalities in accordance with the Minimum Tax Ord-
inance (OMinT) and the Cantonal Banking Act on Zürcher
Kantonalbank. Further information on OECD minimum
taxation can be found in the accounting and valuation
principles in the notes to the financial statements.
Analysis of the asset and financial position
Total assets stand at CHF 202.6 billion as at the end
of 2024, roughly in line with the previous year’s level.
On the assets side, liquid assets fell by 17.6 percent
to CHF 32.7 billion. Nevertheless, they remain at a high
level with liquidity ratios that continue to be very good.
This is reflected in the liquidity coverage ratio (LCR) of
142 percent (previous year: 147 percent), as well as in the
net stable funding ratio (NSFR) of 116 percent (previous
year: 117 percent). Accordingly, the bank continues to
comply comfortably with regulatory liquidity require-
ments. In contrast to the development of liquid assets,
there was growth in the mortgage business, which in-
creased by 5.7 percent or CHF 5.7 billion.
On the liabilities side, amounts due to banks in-
creased by 12.1 percent or CHF 4.3 billion to CHF 39.7
billion. At the same time, liabilities from securities fin-
ancing transactions fell by CHF 6.1 billion to CHF 8.0 billion.
There was also a sharp increase of CHF 5.5 billion to
CHF 107.0 billion in amounts due in respect of customer
deposits.
Other liabilities totalled CHF 834 million at the end
of 2024, down 53.4 percent on the previous year. This is
mainly due to the fact that the balance of broker settle-
ment accounts as at the reporting date has normalised
again compared to the previous year’s high figure.
Development of the interbank
and securities financing business
On the assets side, the securities financing busi-
ness had a balance of CHF 25.3 billion as at the report-
ing date, comparable with the previous year (CHF 25.7
billion).
On the liabilities side, the balance declined to
CHF 8.0 billion (minus 43.2 percent or CHF 6.1 billion).
This is due in particular to a shift to amounts due to
banks of CHF 4.3 billion to CHF 39.7 billion, whereby
this development is the result of active balance sheet
management.
Please see Note 1 in the Financial Report for further in-
formation.
Volume growth in loans
Mortgage loans in the amount of CHF 106.6 bil-
lion were outstanding at the end of 2024 (previous year:
CHF 100.9 billion). This corresponds to a net increase of
5.7 percent or CHF 5.7 billion. At year-end, the value
adjustments for impaired mortgage loans amounted
to CHF 35 million (previous year: CHF 36 million) and
CHF 383 million (previous year: 363 million) for expected
losses on mortgage loans.
Amounts due from clients amounted to CHF 11.6
billion and these recorded net growth of 3.3 percent or
CHF 369 million. Individual value adjustments totalled
CHF 222 million (previous year: CHF 199 million). Value
adjustments for expected losses for this item were only
marginally higher than in the previous year at around
CHF 53 million (previous year: CHF 52 million).
Result from other trading activities
Result from trading in bonds, interest
rate and credit derivatives
Result from trading in foreign exchange,
bank notes and precious metals
Result from trading in equities and
structured products
03 Breakdown of result from trading activities
in CHF million
61
Zürcher Kantonalbank Annual Report 2024
› Management Report
04 Consolidated profit before taxes in CHF million
1,024
Result from commission business and services
1,680
Result from interest operations
32
Other result
Operating income
3,088
Result from trading activities
353
– 1,223
Personnel expenses
– 508
General and administrative expenses
– 72
Depreciation
– 8
Changes to prov. / other val. adj. and losses
1,277
Operating result
12
Extraordinary result
1,289
Consolidated profit before taxes
Higher trading portfolio and an increase
on the asset side in replacement values
On the assets side, the trading portfolio increased
by 13.1 percent to CHF 13.4 billion (previous year:
CHF 11.9 billion). The positive replacement values of
derivative financial instruments increased significantly
by CHF 1.7 billion to CHF 2.7 million as at the reporting
date.
On the liabilities side, the picture is the opposite.
Trading portfolio liabilities (portfolio at year-end: CHF 2.9
billion) declined by CHF 363 million or 11.2 percent year
on year.
The negative replacement values of the deriva-
tive financial instruments (portfolio at the end of the
year: CHF 1.0 billion) showed a year-on-year decline of
59.1 percent.
However, liabilities from other financial instruments
at fair value increased by 10.5 percent to CHF 4.4 billion.
For further information on trading activities, please
see Notes 3 and 4 to the Financial Report. Information
on market risk management can be found in section
1.6 of the Risk Report.
Portfolio of financial investments
slightly lower
At CHF 5.2 billion, the portfolio of financial invest-
ments is around CHF 371 million or 6.6 percent lower
than the previous year. The decline is mainly related to
expiring money-market book claims that were not re-
newed. At CHF 4.7 billion (previous year: CHF 5.3 bil-
lion) or 90.6 percent (previous year: 94.5 percent), debt
securities account for the largest share of financial in-
vestments. These are generally held to maturity. Fixed-in-
terest securities that qualify as high-quality liquid assets
(HQLA) under the Liquidity Ordinance may be counted
towards liquidity. At the end of 2024, the portfolio of
securities in financial investments that were eligible to be
regarded as HQLA totalled CHF 4.7 billion. The remain-
ing portfolio mainly consists of precious metals (CHF 349
million) and equity securities (CHF 134 million).
Investments at the previous year’s level
and tangible fixed assets down slightly
At CHF 155 million, non-consolidated participa-
tions were at a similar level to the previous year (CHF 154
million). For further information, please see Notes 6 and
7 to the Financial Report.
The tangible fixed assets mainly comprise the port-
folio of bank premises worth CHF 472 million (previous
year CHF 504 million), whereby two sales took place
at the beginning of 2024. The change in tangible fixed
assets was influenced by depreciation of CHF 53 million
in combination with (replacement) investments in the
amount of CHF 18 million. Accordingly, the portfolio of
tangible fixed assets totalled CHF 497 million at the end
of the year, compared to CHF 534 million in the previ-
ous year. Further details on tangible fixed assets can be
found in Note 8.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
62
Zürcher Kantonalbank Annual Report 2024
› Management Report
Growth in customer deposits
At CHF 107.0 billion, amounts due in respect of
customer deposits at the end of the year were 5.4 per-
cent higher than in the previous year. This item includes
savings accounts as well as other customer accounts at
sight and on time. In contrast to the previous year, hold-
ings in sight deposit accounts in particular increased as
per the end of 2024 (up CHF 7.2 billion). Time deposits,
on the other hand, recorded a decline of CHF 2.3 billion.
Declining holdings of cash bonds and
money market securities and shift from
central mortgage institution loans to
bond issues
The challenging interest rate environment and
the general conditions on the capital market are also
reflected in the balance sheet. While holdings of cash
bonds increased in the previous year, they declined again
in 2024 and totalled CHF 260 million at the end of the
year (previous year: CHF 288 million). The reaction to the
interest rate environment was even more pronounced
in money market securities, where the portfolio fell by
CHF 582 million to CHF 50 million.
Bonds outstanding totalled CHF 11.0 billion, an
increase of CHF 447 million compared to the end of the
previous year. This increase was mainly at the expense of
mortgage-covered loans. At year-end, mortgage-covered
loans in the amount of CHF 11.2 billion were recognised
in the books (previous year: CHF 11.6 billion), which
corresponds to a decline of CHF 396 million. Along
with client funds, bond issues together with mortgage-
covered loans represent important funding instruments.
For further information, please see Note 15 to the Finan-
cial Report.
Strong capital base
Shareholders’ equity reported before appropri-
ation of profit increased by CHF 594 million or 4.2 per-
cent over the previous year. This figure contains the
bank’s capital of CHF 2.4 billion provided by the Canton
of Zurich as equity, which has an indefinite time limit.
Other elements include retained earnings in the
amount of CHF 11.0 billion, reserves for general bank-
ing risks (CHF 379 million) and consolidated profit
(CHF 1,120 million). The currency translation reserve had
a negative impact of CHF 15 million. At year-end, the
bank’s equity totalled CHF 14.9 billion (previous year:
CHF 14.3 billion).
Client assets
Client assets amounted to CHF 520.8 billion as at
31 December 2024 (previous year: CHF 450.8 billion), of
which CHF 457.3 billion relates to assets under manage-
ment (previous year: CHF 395.8 billion). The CHF 61.5
billion increase in assets under management is mainly
due to the market performance (CHF 32.8 billion) and
net new money inflow (CHF 29.8 billion). For further
information, please see Notes 31 a) and 31 b) to the
Financial Report.
Development of regulatory
capital adequacy situation
At risk-weighted level, the current capital adequa-
cy requirements as a systemically important bank (TLAC
requirement, consisting of going-concern and gone-con-
cern requirements) total 19.7 percent. With a risk-based
TLAC ratio of 25.7 percent (previous year: 26.8 percent),
these requirements are significantly exceeded, confirm-
ing the strong capitalisation of Zürcher Kantonalbank.
At an unweighted level, the TLAC requirement as
a systemically important domestic bank is 6.4 percent.
With a TLAC leverage ratio of 9.8 percent (previous year:
9.4 percent), these requirements are also comfortably
exceeded.
AAA rating still one of the safest
banks in the world
The rating agencies Fitch, Moody’s and Standard &
Poor’s left their ratings for Zürcher Kantonalbank un-
changed at AAA and Aaa, respectively. Zürcher Kantonal
bank is also one of the safest universal banks in the world
on a stand-alone basis (i.e. without taking any govern-
ment support into account), as evidenced by the stand-
alone rating of aa- (Standard & Poor’s).
Corporate
Governance
2024
Zürcher Kantonalbank
64
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Corporate Governance
Internal organisation
Activity reports
Chairperson’s Committee
Board of Directors
Audit Committee
Risk Committee
Compensation and Personnel Committee
IT Committee
Chairperson’s Committee,
Board of Directors
and Executive Board
Chairperson’s Committee
Board of Directors
Executive Board
66
69
74
74
74
75
76
76
77
78
80
81
84
Contents
65
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Corporate
Governance
We take our responsibility to the Canton of Zurich and
its residents seriously. This is also reflected in our cor-
porate governance. We engage in open, transparent
dialogue with our stakeholder groups. The management
and supervisory bodies of our bank comprise the Board
of Directors, the Chairperson’s Committee, the Executive
Board, the Audit Committee, the Auditor, and the Can-
tonal Parliamentary Committee. The Board of Directors,
the Chairperson’s Committee and the Executive Board
ensure the fulfilment of the public service mandate within
the scope of their responsibilities and powers.
Basic principles
Zürcher Kantonalbank is a responsible bank which
engages in a constant, open and transparent dialogue
with its stakeholder groups. As an institution under public
law, the bank is accountable in particular to the Can-
ton of Zurich, its residents and the Cantonal Parliament,
which is ultimately responsible for the supervision of the
bank via a standing commission. As a bank, it is regu-
lated by the Swiss Financial Market Supervisory Authority
FINMA and, due to its systemic importance, the Swiss
National Bank (SNB) also deals with it. In addition to the
provisions of federal supervisory law, the requirements of
FINMA Circular 2017 / 1 “Corporate governance – banks”
in particular are applicable to Zürcher Kantonalbank. In-
sofar as this is reasonable for an institution under pub-
lic law, Zürcher Kantonalbank also applies the Directive
on Corporate Governance of 29 June 2022 of SIX Swiss
Exchange Ltd, which has been in force since 1 January
2023. Unless otherwise specified, all stated information
is valid as at 31 December 2024.
Structure and ownership
Zürcher Kantonalbank is a public-law institution
under the cantonal law of Zurich. In accordance with the
Cantonal Banking Act on Zürcher Kantonalbank of 28
September 1997 (Zürcher Kantonalbank Act), the bank’s
purpose is to contribute to addressing economic, social
and environmental issues and thus support sustainable
development in the Canton of Zurich. The group struc-
ture and scope of consolidation are shown in Note b)
Accounting and valuation principles in the Consolidated
Financial Statements. For information on the change in
equity, please refer to the Consolidated statement of
changes in equity in the financial report.
66
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Swiss Financial Market Supervisory
Authority FINMA
In its capacity as an independent supervisory au-
thority for the Swiss financial market, FINMA has sover-
eign powers over financial market participants, including
banks. It works to protect creditors, investors and policy-
holders, as well as to ensure the stability and effective-
ness of the financial markets.
Swiss National Bank
As an independent central bank, the Swiss Nation-
al Bank (SNB) manages Switzerland’s monetary policy
and also has the task of contributing to the stability of
the financial system. It defines the systemically important
banks after prior consultation with FINMA. The SNB and
FINMA collaborate regarding matters related to financial
stability.
Audit
Committee
Risk
Committee
Compensation
and Personnel
Committee
IT
Committee
Dr Jörg Müller-Ganz
Chairman
Deputy Chairman
Member of the
Board of Directors
since 01.07.2011
(from 01.10.2010
until 30.06.2011)
since 01.07.2007
(Jul 2007
– Nov 2008)
(Oct 2010
– Jun 2011)
since Jul 2019
(Nov 2008
– Jun 2019)
Roger Liebi
Deputy Chairman
Member of the
Board of Directors
since 01.07.2019
Since 01.07.2018
(Jul 2018
– Jun 2019)
since Feb 2022
(Jul 2018
– Jan 2022)
Mark Roth
Deputy Chairman
Member of the
Board of Directors
since 01.02.2022
since 01.09.2013
(Jul 2015
– Jan 2022)
(Sep 2013
– Jun 2015)
since Feb 2022
(Sep 2013
– Jun 2015)
Amr Abdelaziz
Member of the
Board of Directors
since 01.07.2015
since Jul 2015
since Jul 2015
Sandra Berberat Kecerski
Member of the
Board of Directors
since 01.03.2022
since Mar 2022
(Mar 2022
– Dec 2023)
since Jan 2024
Prof Dr Adrian Bruhin
Member of the
Board of Directors
since 26.10.2020
(Nov 2020
– Jan 2022)
since Feb 2022
(Nov 2020
– Jan 2022)
Prof Dr Bettina Furrer
Member of the
Board of Directors
since 24.06.2019
(Jul 2019
– Dec 2023)
since Jan 2024
since Jul 2019
René Huber
Member of the
Board of Directors
since 01.11.2014
since Nov 2014
since Jul 2015
Henrich Kisker
Member of the
Board of Directors
from 01.07.2015
until 31.12.2024
Feb 2022
– Dec 2024
(Jul 2015
– Sep 2020)
(Oct 2020
– Jan 2022)
(Jul 2018
– Sep 2020)
(Jul 2015
– Jun 2018)
Gregor Kreuzer
Member of the
Board of Directors
since 01.01.2024
since Jan 2024
since Jan 2024
Walter Schoch
Member of the
Board of Directors
from 01.07.2015
until 31.12.2024
Jul 2015
– Dec 2024
Prof Dr Hans-Ueli Vogt
Member of the
Board of Directors
since 01.01.2024
since Jan 2024
Claudia Zimmermann
Member of the
Board of Directors
since 01.01.2024
since Jan 2024
since Jan 2024
Members of the Board of Directors and its committees as at 31.12.2024
(2024–2027 legislative period)
Board of Directors and
Chairperson’s Committee
The Board of Directors consists of 13 members
elected by the Cantonal Parliament for a term of four
years. This number includes three full-time members of
the Chairperson’s Committee.
All of the members of the Board of Directors are Swiss
citizens resident in the Canton of Zurich and are inde-
pendent within the meaning of FINMA Circular 2017 / 1
“Corporate governance – banks”. No member has ever
served on the bank’s Executive Board. None of the part-
time members of the Board of Directors have significant
business connections with the bank.
The Chairperson’s Committee is an independent
body. The duties and compensation of the Board of
Directors and Chairperson’s Committee are set out in
§ 15 and § 16 of the Cantonal Banking Act on Zürcher
Legend: Chair
67
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Kantonalbank, section 34 and section 35 of the bank’s
organisational regulations of 15 December 2022, the
regulations governing the compensation of members
of the Board of Directors of Zürcher Kantonalbank,
as approved by the Cantonal Parliament of Zurich on
25 November 2004, and in other specific regulations.
As laid down in § 14.3 of the Cantonal Banking Act on
Zürcher Kantonalbank, members of the Board of Dir-
ectors may not work for any other bank, or be a member
of the tax authorities, Government Council, Cantonal
Parliament or highest cantonal courts.
The Cantonal Parliament of Zurich elects the mem-
bers of the Board of Directors and the Chairperson’s
Committee for a four-year term of office. In doing so,
it considers their personal characteristics such as assert-
iveness, credibility and integrity, and their suitability
with regard to banking expertise, as well as regulatory
requirements and proportional political representation.
The professional qualifications for each individual mem-
ber of the Board of Directors are regularly assessed by
external specialists. Members are eligible for re-election.
There are no restrictions on periods of office for mem-
bers of the Chairperson’s Committee. For the other
members of the Board of Directors, the total period of
office may not exceed 12 years. The term of office for
members of the Board of Directors ends at the latest
on their 70 th birthday. If a member of the Chairper-
son’s Committee reaches their 65 th birthday during
their term of office, their time in office ends when their
term of office expires.
For the current legislative period, the Board of
Directors consists of the persons listed in the table on
page 67.
Cantonal Parliament and
Cantonal Parliamentary Committee
Responsibility for the ultimate political supervi-
sion of Zürcher Kantonalbank lies with the Cantonal
Parliament. Its duties are set out in § 11 of the Cantonal
Banking Act on Zürcher Kantonalbank. In addition to the
election of the members of the Board of Directors and
Chairperson’s Committee, they include approving the
Guidelines for the Fulfilment of the Public Service Man-
date, the regulations governing the compensation paid
to members of the Board of Directors, and the annual
financial statements and annual and the sustainability
report of the bank, as well as relieving the governing
bodies of some of their tasks.
The Cantonal Parliament of Zurich has charged the
Parliamentary Committee for the Supervision of Com-
mercial Undertakings (AWU) with ultimate supervision
in accordance with § 12 of the Cantonal Banking Act on
Zürcher Kantonalbank. This standing, supervisory Can-
tonal Parliamentary Committee inspects the minutes of
the Board of Directors and, depending on the matter
concerned, obtains information from the Chairman,
the Chairperson’s Committee, members of the Board of
Directors, the Chief Executive Officer, other members of
the Executive Board or representatives of the external
auditors with regard to the activities, course and results
of the bank’s business and any important events. As
at 31 December 2024, this Cantonal Parliamentary
Committee comprised the members listed in the fol-
lowing table.
Information and control instruments
The Board of Directors and Chairperson’s Com-
mittee are regularly briefed on the course of business
and the main activities of the Executive Board as well
as on significant developments. At the invitation of the
Chairperson’s Committee, members of the Executive
Board attend meetings of the Board of Directors to in-
form its members on current issues and are involved in
the strategy and planning. The Chairperson’s Committee
scrutinises all minutes of the meetings of the Executive
Board, business units and committees.
At least once every quarter, the Board of Directors
receives a detailed briefing on the course of business,
developments in key risk categories (including compli-
ance risks) and the status of important projects. This
also includes monitoring of reputation risks. The Legal &
Compliance business unit reports directly to the Board of
Directors and Executive Board in accordance with mar-
gin no. 78 ff. FINMA Circular 2017 / 1. The Anti-Money
Laundering unit also reports to this unit.
Moreover, Zürcher Kantonalbank has an Audit
unit that reports directly to the Board of Directors and
is independent of the Executive Board. Audit assists the
Chairperson’s Committee and the Board of Directors
in fulfilling their supervisory and control tasks, and has
unlimited rights of inspection and information within
the bank. It reports to the Audit Committee and the
Chairperson’s Committee, and as required but at least
once per year, to the Board of Directors.
AWU members as at 31.12.2024
Stefanie Huber, GLP
Chairperson
Thomas Anwander, Die Mitte
Member of the Committee
André Bender, SVP
Member of the Committee
Beat Bloch, CSP
Member of the Committee
Astrid Furrer, FDP
Member of the Committee
Hanspeter Göldi, SP
Member of the Committee
Andrea Grossen-Aerni, EVP
Member of the Committee
Roland Kappeler, SP
Member of the Committee
Monika Keller, FDP
Member of the Committee
Thomas Lamprecht, EDU
Member of the Committee
René Truninger, SVP
Member of the Committee
68
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
The AWU of the Cantonal Parliament of Zurich monitors
the fulfilment of the public service mandate in accord-
ance with § 12 of the Cantonal Banking Act on Zürcher
Kantonalbank. This is primarily based on an annual focus
report, the theme of which changes annually depending
on the AWU’s requests. This focus report is integrated
into the German annual report (p. 27 ff.), which also
accounts for the bank’s fulfilment of the public service
mandate.
Internal organisation
Areas of responsibility
The responsibilities of the Chairperson’s Commit-
tee, Board of Directors, Executive Board and external
auditors are governed by the Cantonal Banking Act on
Zürcher Kantonalbank of 28 September 1997 (§ 15–18),
the bank’s organisational regulations of 15 December
2022 and other regulations.
Chairperson’s Committee
Under § 16 of the Cantonal Banking Act on Zürch-
er Kantonalbank, the Chairperson’s Committee, which
is an executive body in its own right, is responsible for
the direct supervision of the Executive Board. In this
context, the Chairperson’s Committee monitors the im-
plementation of decisions of the Board of Directors and
compliance with statutory and regulatory provisions.
Corporate Governance at Board of Directors level
Swiss Financial Market
Supervisory Authority FINMA
Audit Committee
Risk Committee
Compensation and
Personnel Committee
IT Committee
Cantonal Parliament
Board of Directors
Chairperson’s
Committee
Parliamentary Committee
for the Supervision of Commercial
Undertakings (AWU)
External audit
Swiss National
Bank (SNB)
Audit
(Inspectorate)
69
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Areas of responsibility
Chairperson’s Committee
Main responsibilities of the Chairperson’s Committee: It
– prepares topics relating to strategy and cor-
porate culture for submission to the Board of
Directors
– scrutinises the decisions of the Executive Board
and assures its direct supervision
– monitors the execution of resolutions passed by
the Board of Directors
– approves loans in accordance with the delinea-
tion of powers laid down by the Board of Directors
– takes decisions on providing assistance to
economic, social and cultural institutions
– decides on the bank’s representation in or-
ganisations
– is informed of new lending transactions that fall
within the remit of the Executive Board
– is informed of the course of business at partici-
pations
– hires, dismisses and promotes members of senior
management
– reviews the Legal & Compliance reports on a
half-yearly basis
– is regularly informed of major risk positions
– deals with pressing matters that fall under the
responsibilities of the Board of Directors and
subsequently obtains the Board’s approval
– decides on transactions with particularly signifi-
cant risks, conflicts of interest and extraordinary
effects on the group’s reputation
– regularly checks the quality and efficiency of the
fulfilment of the public service mandate
– represents the bank externally regarding strat-
egy, public service mandate and reputation
Board of Directors
Main responsibilities of the Board of Directors: It
– defines the principles of the corporate strategy,
the mission statement, the business strategy
and the organisational structure
– approves the risk policy, the equity strategy,
group-wide risk and global limits, equity invest-
ments and the general framework for group-
wide risk management
– establishes and closes branches and establishes
subsidiaries
– is responsible for a suitable risk and control
environment and an effective internal control
system (ICS)
– determines the group and financial planning
– issues guidelines on human resources policy as
part of the group strategy
– is informed quarterly of risk concentration in
accordance with article 95, paragraph 1 of the
Ordinance on Capital Adequacy and Risk Diversi
fication for Banks and Securities Traders
– approves projects of strategic importance
– approves contingency planning
– takes note of the reporting on the business
framework for international activities
– consults the detailed quarterly reports of the
Executive Board
– is regularly informed by the Executive Board of
all relevant aspects of risk management
– approves unsecured loans in excess of CHF 1
billion
– is regularly informed of lending transactions
that fall within the remit of the Chairperson’s
Committee
– approves the annual planning, annual and
semi-annual financial statements and the an-
nual report including the compensation report
as well as the sustainability report
– hires and dismisses the members of the Execu-
tive Board and their deputies, branch managers
at senior level, and the Head and Deputy Head
of Audit
– issues regulations and special regulations pro-
vided for by law or regulatory provisions
– decides on the annual distribution of profit to
the canton and municipalities
70
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Within the framework of such statutory and regulatory
requirements, it takes decisions on various operational
and electoral matters. It prepares strategic and other
topics for the attention of the Board of Directors. The
Chairperson’s Committee also bears responsibility for the
public service mandate being addressed by the Board
of Directors and therefore also for sustainability issues.
The Chairperson’s Committee consists of Jörg
Müller-Ganz, Roger Liebi and Mark Roth. Jörg Müller-
Ganz is the Chairman and Roger Liebi is his deputy.
Elected substitute members of the Chairperson’s Com-
mittee are Bettina Furrer and Walter Schoch.
Board of Directors
The Board of Directors bears ultimate responsibility
for the management of the bank and for the supervision
of the individuals entrusted with its operational man-
agement (§ 15 of the Cantonal Banking Act on Zürcher
Kantonalbank).
The Board of Directors follows a structured an-
nual cycle and examines the group strategy and analyses
Zürcher Kantonalbank’s strengths and weaknesses, op-
portunities and risks, as well as the associated strategic
risks. This includes the related planning, controlling and
reporting activities, as well as regular examination of risk
management, risk reporting, the regulatory audit report
by auditors Ernst & Young AG (EY), and measures and
reports relating to the public service mandate and sus-
tainability. The Board of Directors also takes decisions on
loan and limit applications as well as other transactions
that fall within its remit.
Audit (Inspectorate)
Audit is responsible for the group’s internal audit.
It is headed by Jörg Steinger and at the end of 2024 had
53.5 full-time employees (FTE).
In organisational terms, Audit reports directly to
the Board of Directors and is independent of the Execu-
tive Board. It assists the Board of Directors and its com-
mittees in fulfilling their supervisory and control tasks by
using a systematic, risk-oriented approach to evaluate
the effectiveness of risk management and controls as
well as of the management, performance and oversight
processes, and by submitting recommendations for opti-
misation. Audit also checks the bank’s compliance with
regulatory provisions, internal directives and guidelines
in all areas of the business.
To perform its audit role, Audit has unlimited rights
of inspection, information and access within the bank
and group companies. Audit is not bound by any dir-
ectives in substantive terms in the drafting of its reports,
which are generally drawn up for the attention of the
Audit Committee of the Board of Directors, the Chair-
person’s Committee (which can take immediate meas-
ures), occasionally other bank committees, the members
of the Executive Board, other managers and the exter-
nal auditors. Audit follows strict quality guidelines and
designs its procedures in accordance with recognised
international auditing standards – the Standards and the
Code of Ethics of the Institute of Internal Auditors (IIA).
Board of Directors Committees
Four committees assist the Board of Directors in
its decisions by providing preliminary advice:
– Audit Committee
– Risk Committee
– Compensation and Personnel Committee
– IT Committee
The Board of Directors Committees have no decision
making powers: instead they make proposals and give
recommendations to the Board of Directors. Information
on the work of the committees is presented at every
meeting of the Board of Directors. The committee chair-
persons hold a joint coordination meeting every year
with the Chairperson’s Committee. Where possible, sub-
jects concerning more than one committee are dealt
with at joint meetings. In addition, all members of the
Board of Directors receive the minutes of all meetings
of Board of Directors Committees.
Audit Committee
The Audit Committee supports the Board of Direc-
tors in its supervisory and control functions in accordance
with § 15a of the Cantonal Banking Act on Zürcher Kan-
tonalbank, section 49 and section 50 of Zürcher Kanton-
albank’s organisational regulations and FINMA Circular
2017 / 1 "Corporate governance – banks". Within its area
of responsibility, it prepares specialist resolutions of the
full Board of Directors and, in this regard, is responsible
in particular for critically analysing the published annual
and interim financial statements of the parent company
and group. In addition, the Audit Committee assesses the
functionality of the internal control system and appraises
the audit plan and reports issued by Audit and the exter-
nal auditors.
Until 31 December 2024, this Committee com-
prised Henrich Kisker (Chairman), Amr Abdelaziz, Sandra
Berberat Kecerski, René Huber and Gregor Kreuzer. The
Head of Audit attends all meetings of the Audit Com-
mittee as a permanent guest. The CFO participates in
portions of each meeting of the Audit Committee.
Risk Committee
The Risk Committee assists the Board of Dir-
ectors in monitoring the bank’s risk management and
compliance with the associated regulatory provisions. It
prepares the relevant topics for the Board of Directors,
exercising its function in the sense of a preliminary con-
sultation and making recommendations to the Board of
71
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Directors. It evaluates in particular the quality, adequate-
ness and effectiveness of the processes and procedures
for identifying, assessing, limiting, controlling, monitor-
ing and managing risks.
Until 31 December 2024, this Committee consist-
ed of Adrian Bruhin (Chairman), Bettina Furrer, René
Huber, Roger Liebi and Claudia Zimmermann. The Chief
Risk Officer, the Head of Audit and the Head of Risk
Control participate in every meeting of the Risk Com-
mittee.
Compensation and Personnel Committee
The Compensation and Personnel Committee
(CPC) assists the Board of Directors in connection with
personnel decisions, the human resources strategy, as
well as personnel and compensation policy. It assists the
Board of Directors by providing preliminary advice and
issuing recommendations on these matters.
Until 31 December 2024, the Compensation and
Personnel Committee comprised Hans-Ueli Vogt (Chair-
man), Amr Abdelaziz, Sandra Berberat Kecerski, Jörg
Müller-Ganz and Claudia Zimmermann. The Head of
People & Culture (Human Resources) attends every meet-
ing of the Compensation and Personnel Committee.
IT Committee
The IT Committee supports the Board of Directors
in defining and monitoring the IT-relevant aspects of
the group strategy. It advises the Board of Directors on
all matters relating to IT at Zürcher Kantonalbank and
makes appropriate recommendations. For this purpose,
it works to obtain a picture of the contribution of IT
to the bank’s performance. Furthermore, it assesses the
cost and investment framework for IT by considering
the potential effects on current and future courses of
action as well as on business risks. Finally, it assesses
the functionality of the management of IT risks with an
impact on IT-related investment risks.
Urs Baumann
Chief Executive Officer
Member of the Executive Board
since 01.09.2022
since 01.06.2022
Dr Stephanino Isele
Deputy Chief Executive Officer
Member of the Executive Board
since 01.05.2021
since 01.04.2014
Dr Martin Bardenhewer
Member of the Executive Board
since 01.05.2023
Dr Jürg Bühlmann
Member of the Executive Board
since 01.07.2012
Daniel Previdoli
Member of the Executive Board
since 01.12.2007
Remo Schmidli
Member of the Executive Board
since 01.07.2019
Florence Schnydrig Moser
Member of the Executive Board
since 01.01.2021
Hjalmar Schröder
Member of the Executive Board
since 01.04.2024
Members of the Executive Board
As at 31.12.2024
Until 31 December 2024, the IT Committee comprised
Walter Schoch (Chairman), Bettina Furrer, Gregor Kreu-
zer and Mark Roth. The Head of the IT, Operations & Real
Estate business unit and the Head of IT Audit participate
in each meeting of the IT Committee.
Auditor
Under the Cantonal Banking Act on Zürcher Kan-
tonalbank, the Cantonal Parliament appoints the exter-
nal auditors for a two-year period. The external auditors
must be recognised by FINMA. On 27 May 2024, the
Cantonal Parliament confirmed the appointment of EY
(since 1998) as external auditors for 2025 and 2026.
Bruno Patusi has been the lead auditor for the
financial audit since 2018. Patrick Schwaller has been
the lead auditor for the regulatory audit since 2020.
In the year under review, EY charged CHF 4.1 mil-
lion for regulatory audits (basic and additional audits),
the audit of the annual financial statements of the bank
and group companies as well as the consolidated finan-
cial statements (2023: CHF 4.1 million). EY charged
CHF 0.03 million (2023: CHF 0.02 million) for additional
consulting services, and CHF 0.1 million for audit-related
services (2023: CHF 0.2 million). Furthermore, EY charged
CHF 3.5 million (2023: CHF 3.3 million) via group com-
panies for auditing collective capital investments.
The external auditors work together with Audit
and, to the extent permitted, base their work on that of
Audit. The tools used to inform the Board of Directors
include reports on the regulatory and financial audits
as well as reports on any interim audits and summary
audits. The external auditors also attend meetings of the
Board of Directors or its committees where necessary.
Executive Board
The Executive Board of Zürcher Kantonalbank has
eight members. It is headed by Urs Baumann (Chief Ex-
ecutive Officer, CEO). Under § 17 of the Cantonal Bank-
72
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
ing Act on Zürcher Kantonalbank, the Executive Board
is responsible for managing the bank’s operations. The
members of the Executive Board occupy an advisory role
on the Board of Directors and the Chairperson’s Com-
mittee. The Executive Board is responsible for business as
well as human resources matters where they concern the
management of the bank. With the exception of Audit,
it is responsible for the appointment and dismissal of
members of senior management. The duties of the Ex-
ecutive Board are governed by the law and regulations.
The organisational structure is governed by the bank’s
organisational regulations dated 15 December 2022.
Under section 79 of the bank’s organisational
regulations of 15 December 2022, the Chief Executive
Officer is responsible for managing the Executive Board,
implementing the group mission statement and group
strategy as well as the group structure and organisa-
tion, representing the Executive Board both internally
and externally, coordinating the business activities of the
Executive Board, and ensuring that the duties assigned
by the Board of Directors and the Chairperson’s Com-
mittee are carried out.
The Chief Executive Officer reports to the Chair-
person’s Committee and Board of Directors. Subject to
the responsibilities of the Board of Directors and the
Chairperson’s Committee, the individual members of the
Executive Board report to the CEO.
Members of the Executive Board
All members of the Executive Board are Swiss na-
tionals. For information on compensation, profit-sharing
and loans, please refer to the Compensation Report. As
at 31 December 2024, the Executive Board comprised
the persons listed in the table on page 72.
For further information about the individual mem-
bers of the Executive Board, please see p. 84 ff.
Public service mandate
As part of the strategy process, the Board of Dir-
ectors, Chairperson’s Committee and Executive Board
deal on a regular basis with the subject of the public
service mandate. They ensure that the bank’s legal re-
quirements and the public service mandate are met. The
Chairperson’s Committee is assigned special responsi-
bility for control and monitoring in this regard (§ 9 and
§ 10 of the Guidelines for the Fulfilment of the Public
Service Mandate).
The central body is the internal Public Service
Mandate Steering Committee, which is chaired by the
officer responsible for the public service mandate. The
committee advises and supports the bank’s governing
bodies and business units on all aspects of the public
service mandate and reports annually on the fulfilment
of the mandate to the supervisory committee of the
Cantonal Parliament. All business units are represent-
ed on the Public Service Mandate Steering Committee
by a manager with responsibility for the relevant area.
The Public Service Mandate specialist area is part
of the general management staff office. It coordinates
planning, implementation and reporting with regard to
the fulfilment of the public service mandate and all as-
sociated activities. It also prepares the business of the
Public Service Mandate Steering Committee. Various
specialist areas within the individual business units assist
with the achievement of objectives.
Strategic risk orientation and risk profile
For information on the focus of the risk strategy
and the risk profile, please see the Risk Report in Note I)
to the Consolidated Financial Statements.
Compensation of the members
of the Board of Directors and the Executive Board
For detailed information on the compensation of
the members of the Board of Directors and the Executive
Board and the process underlying the determination of
the amounts to be compensated, please see the Com-
pensation Report.
Management contracts
The group and its companies have not concluded
any management contracts with third parties.
Communication policy
Zürcher Kantonalbank pursues a transparent com-
munication policy towards its stakeholder groups. The
most important communication tools are the compre-
hensive annual and sustainability report, the half-yearly
report and press conferences. The 2024 annual results
were announced on 7 February 2025, and the annual
report and sustainability report are set to be approved
by the Cantonal Parliament on 26 May 2025. The bank’s
half-yearly results are expected to be published at the
end of August 2025.
73
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Activity reports
Chairperson’s Committee
In addition to addressing strategic, planning, or-
ganisational and human resources questions as well as
issues concerning the corporate culture, the Chairper-
son’s Committee, in accordance with statutory and reg-
ulatory competencies, dealt at their weekly meetings in
the year under review with lending and limit transactions
within their area of responsibility pursuant to the ap-
plicable regulations, as well as transactions involving spe-
cial reputation risks. The Chairperson’s Committee de-
cided on any immediate measures to address objections
in audit reports, oversaw the monitoring and implemen-
tation of regulatory requirements, and dealt with re-
quests addressed to the Board of Directors from both
FINMA and the Cantonal Parliament. Members of the
Executive Board, the Head of Audit, the Head of Le-
gal & Compliance, and representatives of the specialist
units were regularly invited to attend these meetings.
The Chairperson’s Committee dealt in the report-
ing year with the handover from the outgoing to the
new Chief Risk Officer (CRO). In addition, it worked with
a committee of members of the Executive Board and
external consultants to develop the basis for discuss-
ing with the Board of Directors any adjustments to the
bank’s future organisational structure. Moreover, the
Chairperson’s Committee addressed succession planning
for the members of the Executive Board and all of the
bank’s key management personnel.
The new compensation model, which the Chair-
person’s Committee prepared together with the Com-
pensation and Personnel Committee (CPC), an Execu-
tive Board committee and external consultants, came
into force throughout the bank on 1 January 2024. The
Chairperson’s Committee received reports on the imple-
mentation of this model. The Chairperson’s Committee
also prepared the onboarding of the three newly elected
members of the Board of Directors. Additionally, they
held personal discussions with the existing and newly
elected members of the Board of Directors to ensure
that a professionally appropriate and balanced comp-
osition of the Board of Directors committees was in
place from 2025.
The Chairperson’s Committee also kept abreast
of regulatory changes and their implementation (e. g.
FINMA Circular 2023 / 1 “Operational risks and resilience
– banks”) in the year under review and received informa-
tion on the development of important bank projects. The
proposal to amend the Cantonal Banking Act on Zürcher
Kantonalbank to take account of the OECD minimum
tax when distributing dividends and ensure the previous
participation of the canton and municipalities, which
was prepared by the Chairperson’s Committee for the
attention of the Cantonal Parliament and approved by
the Board of Directors, was unanimously adopted by the
Cantonal Parliament on 5 February 2024. The amended
Act entered into force on 1 January 2025.
The Chairperson’s Committee also met several
times to discuss and prepare strategic topics for the at-
tention of the Board of Directors. In addition, they pre-
pared the two-day strategy seminar of the Board of
Directors and the Executive Board, as well as the two-day
training seminar of the Board of Directors. They cooper-
ated with the Board of Directors committees in develop-
ing the substantive resolutions and personnel decisions
as well as the basic principles for the strategic adjust-
ment requirement on behalf of the Board of Directors
and ensured their swift implementation. In addition,
they also dealt on an ongoing basis with current geopo-
litical and national events. It also decided on sponsorship
commitments and donations under the public service
mandate.
In order to promote the interests of Zürcher Kanto
nalbank among important decision-makers in politics
and business, the Chairperson’s Committee maintained
regular contact with FINMA and SNB and collaborat-
ed with the Public Affairs specialist unit. The members
of the Chairperson’s Committee maintained a personal
dialogue with the Cantonal Parliament of Zurich – parti
cularly with the Parliamentary Committee for the Super-
vision of Commercial Undertakings and the Executive
Board, the Government Council of Zurich, the executive
authorities of towns and municipalities in the Canton
of Zurich, and Zurich’s representatives in the National
Council and Council of States. The Chairperson’s Com-
mittee represented Zürcher Kantonalbank in regular
discussions in the context of the Association of Swiss
Cantonal Banks, as well as at various representative cul-
tural, political, environmental and business events. In ac-
cordance with a timetable, the Chairperson’s Committee
visited market areas and specialist units.
Board of Directors
The Board of Directors follows a structured an-
nual cycle and examines the group strategy and analyses
Zürcher Kantonalbank’s strengths and weaknesses, op-
portunities and risks, as well as the associated strategic
risks. This includes the related planning, controlling and
periodic reporting activities, as well as regular exam-
ination of risk management, risk reporting, the regu-
latory audit report by auditors Ernst & Young AG (EY),
and measures and reports relating to the public service
mandate and sustainability. The Board of Directors also
takes decisions on loan and limit applications as well as
other transactions that fall within its remit.
Ten ordinary meetings were held during the re-
porting year in the presence of the Executive Board
and the Head of Audit. Representatives of EY attended
three meetings. A two-day Board of Directors seminar on
74
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
strategic topics, a two-day training seminar and a con-
stituent meeting were also held. Members of the Board
of Directors also visited ten branches and five specialist
units in pairs during the year under review.
As it does every year, the Board of Directors
sought guidance on the effects on the bank of national
and geopolitical events and conditions on the financial
markets. In 2024, the focus was once again on the ef-
fects of the takeover of Credit Suisse by UBS on the
Swiss financial centre and on our bank, as well as the
macroeconomic environment and its impact on interest
rates. The Board of Directors decided in the reporting
year to acquire Complementa AG, divest ZKB Öster
reich AG and liquidate Swisscanto Pensions Ltd. It also
authorised the establishment of the Vested Benefits
Foundation II. It elected new branch managers for the
branches in Adliswil and Thalwil, Rüti, Hinwil and Wald,
and Affoltern am Albis, as well as a new secretary of
the Board of Directors. It also approved the annual up-
date of the contingency plan. Additionally, the Board of
Directors took note of the national frameworks of the
individual business units as part of its annual approval
of the concept for monitoring the bank’s international
activities. It also took note of the reporting on finances,
risks and ICS, start-up and risk financing, participations
and capital market transactions. It was also informed
about the implementation of the public service mandate,
the bank’s strategic projects, the activities of the Public
and Regulatory Affairs specialist unit and the implemen-
tation of FINMA Circular 2023 / 1 “Operational risks and
resilience – banks”, which came into force as of 1 Janu-
ary 2024 with several transitional periods. The Board of
Directors also revised the provisions applicable to it on
proprietary trading, the handling of insider information,
ad hoc publicity, the handling of conflicts of interest, as
well as the treatment of gifts and invitations for part-
time members of the Board of Directors. It furthermore
approved the modifications to the special regulations
for the lending business with other banks and reviewed
the job profiles of the Executive Board and the Head of
Audit. It was also informed about the initial experiences
following the introduction of the Digital Asset Hub.
During a two-day seminar, the Board of Directors
dealt with the development of the regulatory environ-
ment as well as the strategic and organisational devel-
opment of our bank. At several meetings, the Board of
Directors additionally worked with the Executive Board
to refine the strategic management tools. Henrich Kisker
and Walter Schoch resigned from the Board of Directors
as at the end of December 2024. The Cantonal Par-
liament elected as successors Dr York-Peter Meyer on
11 November 2024 and Kristine Schulze on 9 December
2024.
Audit Committee
The Audit Committee held a total of twelve meet-
ings in 2024 with the Head of Audit in attendance. The
CFO was always present when agenda items relating
to financial planning, controlling and reporting were
discussed. The lead auditors at the firm of external au-
ditors regularly attended the meetings to discuss their
reports, Audit’s reports and other agenda items, such as
FINMA’s audit strategy. Various agenda items were dis-
cussed in the presence of the Chairperson’s Committee.
The CEO, the CRO and the Head of Legal & Compliance
periodically participated in the meetings. The relevant
management decision-makers were also involved in the
discussions on a regular basis where needed. The Chair-
man of the Audit Committee regularly conferred with
the partners at the external auditors responsible for the
regulatory and financial audits, as well as with the Head
of Audit and the CFO.
At each meeting, attention focused on financial
reporting (monthly, quarterly, half-yearly and annual re-
ports including disclosures), as well as the external and
internal audit reports. A total of 54 internal and 17 ex-
ternal audit reports were discussed. This also involved
the assessment of the appropriateness of measures tak-
en by the entities audited and reporting on the current
implementation status of the measures decided. Key
changes in the risk profile as well as the consequent set-
ting of audit objectives for internal and external auditing
were discussed at several meetings and at the annual
workshop organised by Audit. FINMA also presented its
view to the Audit Committee as part of the supervisory
risk analysis. It focused in particular on the risk-oriented
overall coverage of the supervisory audit universe in a
multi-year cycle by internal and external audit activity.
Other important activities and activities required
by the regulator in the year under review included: – as-
sessment of reporting on the structure and effectiveness
of the internal control system for all business units and
subsidiaries of the bank
– discussion of the activity report by Legal & Com-
pliance and a forward-looking assessment of
statutory and regulatory developments
– assessment of the regulatory audit report, the
comprehensive financial audit report and the
special report from the external auditors for
the attention of the Parliamentary Committee
(AWU) regarding the bank’s economic standing
with respect to the state guarantee
– discussion of reports on the course of business
of the group companies and participations
– assessment of Audit’s performance
– discussion of the revised Global Internal Audit
Standards of the Institute of Internal Auditors
and their implementation in the bank
75
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
– assessment of the performance, fees and inde-
pendence of the external auditors, as well as
participation in succession planning as part of
the rotation of the lead auditor
With regard to financial management, the Audit Commit-
tee also examined the bank’s financial strategic param-
eters in the year under review. Furthermore, the bank’s
financial value added was assessed and compared with
other banks on the basis of the CFO’s annual benchmark-
ing study. Other important topics for the Audit Commit-
tee in the year under review included the business per-
formance, the annual and multi-year financial planning,
and the update of the contingency plan. The Audit Com-
mittee then paid particular attention to the enhancement
of the sustainability report as part of non-financial report-
ing. The Audit Committee was also briefed on current
topics in the financial industry, such as developments in
the field of artificial intelligence, and was given an exter-
nal perspective on internal control systems.
Risk Committee
The Risk Committee held ten ordinary meetings
and one extraordinary meeting in the reporting year. It
regularly consulted standard reports, stress scenarios and
risk reports. The quarterly report by the Chief Risk Officer
giving an account of credit, market, liquidity, operating,
compliance and reputation risks was an important tool
for the Committee in terms of performing its tasks. It
also took note of changes relevant to risk, especially in
connection with the mortgage business, international
risks and in other business areas. The Risk Committee
also kept itself informed of credit exposures and limits,
and periodically sought information about lending and
limit transactions that fall within the remit of the Chair-
person’s Committee in particular. It discussed credit and
limit applications, the application for approval of the
international business concept (while at the same time
taking note of the country business framework), and
other transactions within the Board of Director’s remit
from a risk perspective. It evaluated the appropriateness
of our bank’s risk management processes at a workshop,
the completeness of the risk inventory and the risk pro-
files for both operational and compliance risk. It also
submitted to the Board of Directors recommendations
concerning the group-wide risk framework and the re-
quirements in the bank’s risk policy. The Risk Committee
also examined the findings in the risk-relevant audit re-
ports, noted the minutes of the Risk Committee of the
Executive Board and was updated on regulatory devel-
opments. Moreover, it received reports on the largest risk
positions and individual value adjustments, liquidity risk
and balance sheet management, cluster risks, exposures
to central counterparties and the 20 largest exposures.
In the reporting year, it was also informed about the
following topics and business areas of the bank: com-
modity trade finance, sustainability approach with a fo-
cus on best-in-class manager selection, “residential let”
segment in the mortgage business, hospital financing,
non-financial risk taxonomy, private banking internation-
al, external asset managers, experience with the financ-
ing programme, corporate financing dashboard, curated
loans and the status of FINMA regulation on climate and
nature-related risks. It also reviewed the section of the
organisational regulations concerning it and obtained
information from the Chairman of the Bank Stability ex-
pert group on its report of 1 September 2023. The annual
report on operational resilience and the implementation
status of FINMA Circular 2023 / 1 “Operational risks and
resilience – banks” was also presented to the Risk Com-
mittee for the first time in the reporting year.
Compensation and Personnel Committee
The Compensation and Personnel Committee met
for nine ordinary meetings in the year under review.
Depending on the topic, the CEO, CFO, the Head of
Institutionals & Multinationals and other representatives
of the specialist units as well as external advisors partici-
pated in the meetings.
As is standard, the Compensation and Personnel
Committee attended to succession planning, the im-
plementation of the human resources strategy and, in
this context, matters related to compensation (including
equal pay), promotions, disciplinary cases and dismiss-
als, and staff training and development. As part of the
annual reporting process, it reviewed the compensation
report and examined the compensation of the Executive
Board, the variable compensation for Trading, the imple-
mentation of the group-wide compensation system, and
the parameters for the 2024–2026 long-term deferred
compensation.
The bank-wide revision of the compensation sys-
tem came into effect in the year under review as of
1 January 2024. The Compensation and Personnel Com-
mittee was informed about its implementation and initial
experiences with this new system. It also discussed the
requirement profiles for the replacement elections in the
Board of Directors for the attention of the Board of Dir-
ectors, as well as the outcome of the periodic review of
the requirement profiles for the members of the Executive
Board and the Head of Audit. In addition, the Compen-
sation and Personnel Committee prepared in a multi-stage
process the personnel consequences regarding a possible
adjustment of the bank’s organisational structure.
The Compensation and Personnel Committee also
examined proposals to the Board of Directors for the
election of a new Deputy Head of the Institutionals &
Multinationals business unit, new branch managers for
the branches in Adliswil and Thalwil, Rüti, Hinwil and
Wald, and Affoltern am Albis, and a new secretary to
76
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
the Board of Directors. Furthermore, the Committee ex-
amined topics such as the junior staff strategy and talent
development, gender diversity, the shortage of skilled
staff and the revised Performance & Development
2.0 initiative. In addition, the Compensation and Person-
nel Committee met with the members of the employee
representatives to obtain first-hand information about
employee concerns.
IT Committee
The IT Committee held six ordinary meetings in the
year under review. The IT Committee examined strategic
IT reports in detail on a quarterly basis. The Chairman of
the IT Committee reported on this at every meeting of
the Board of Directors. These reports included the key
indicators for IT as well as the status of the most im-
portant IT programmes. The Committee obtained addi-
tional guidance in this respect on the strategic focal points
in the portfolio from the individuals directly responsible
for them. This briefing related in particular to the follow-
ing topics: the expansion of the use of software-as-a-
service (SaaS); the SESAM project, which supports sales
employees with digital technology so that they can work
much more efficiently and serve more clients better; the
enhancement of the financial cockpit and multibanking
for companies; the optimisation of IT in the fund busi-
ness; the further development of the anti-money laun-
dering detection system and the update of the trading
applications.
The IT Committee also continued to receive
semi-annual updates on the status of the “Cloud” pro-
gramme. Data processing at globally active providers is
constantly being optimised and is becoming increasingly
important. In this context, information was provided on
the planned enhancement of the HR systems (People &
Culture).
The IT Committee discussed IT operations in sev-
eral meetings. Topics such as 2023 year-end processing,
service level management and the cooperation between
IT engineering and IT operations were discussed in de-
tail. The IT Committee examined matters related to IT
security on a regular basis. It was informed about cyber
security and the security roadmap. The IT Committee
additionally dealt with all audit reports relevant to IT and
was regularly updated about the rectification status of
the findings of the audit firm and the implementation of
FINMA requirements (particularly those set out in Circu-
lar 2023 / 1 “Operational risks and resilience – banks”).
The Committee examined the complexity in IT and
the deployment of new technologies and innovations.
The use of large language models (LLM) is being tested
in order to increase efficiency. The Committee further-
more received information on IT investment planning
and the development of the personnel portfolio, and
received an overview of outsourcing activities.
77
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Jörg Müller-Ganz
Chairman
Roger Liebi
Deputy Chairman
Chairperson’s Committee
Mark Roth
Deputy Chairman
Board of Directors
Amr Abdelaziz
Member of the
Board of Directors
Bettina Furrer
Member of the
Board of Directors
Sandra Berberat
Kecerski
Member of the
Board of Directors
René Huber
Member of the
Board of Directors
Adrian Bruhin
Member of the
Board of Directors
Henrich Kisker
Member of the
Board of Directors
Gregor Kreuzer
Member of the
Board of Directors
Claudia
Zimmermann
Member of the
Board of Directors
Walter Schoch
Member of the
Board of Directors
Hans-Ueli Vogt
Member of the
Board of Directors
Audit
Jörg Steinger
Head of Audit
78
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Urs Baumann
Chief Executive
Officer (CEO)
Florence
Schnydrig Moser
Head of Private
Banking
Stephanino Isele
Head of Institution-
als & Multinationals,
Deputy Chief
Executive Officer
Daniel Previdoli
Head of Products,
Services & Direct
Banking
Executive Board
Jürg Bühlmann
Head of
Corporate Banking
Martin
Bardenhewer
Chief Financial
Officer (CFO)
Remo Schmidli
Head of IT,
Operations &
Real Estate
Hjalmar Schröder
Chief Risk Officer
(CRO)
79
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Jörg Müller-Ganz
Chairman
Dr. oec. HSG
Swiss / German national;
born in 1961
Key mandates:
› Member of the Board of Trustees
of Innovationspark, Zurich
› Member of the Board of Trustees
of Zurich Zoo, Zurich
› Member of the Board of Directors
of Technopark Immobilien AG,
Zurich
› Chairman of the Board of
Directors of Opo Oeschger AG,
Kloten
Jörg Müller-Ganz was elected to
the Board of Directors in 2007. His
election to the Chairperson’s Com-
mittee followed in October 2010.
From 1992 to 2010, he worked as
a consultant, CEO and partner
at the Helbling Group. He has also
lectured on the subject of corporate
finance at various universities. Prior
to that, he worked at Bank Vonto-
bel and Credit Suisse. He was ap-
pointed Chairman of the Board of
Directors of Opo Oeschger AG,
Kloten, in 2015. He holds a doctor-
ate in banking economics from
the University of St. Gallen. Jörg
Müller-Ganz was a member of
the Audit Committee from 2007
to 2008 and a member of the
IT Committee from 2008 to 2019.
He has been a member of the
Compensation and Personnel
Committee of the Board of Dir-
ectors of Zürcher Kantonalbank
since 2019.
Roger Liebi
Deputy Chairman
Banker, BoD certification from SAQ
Swiss national; born in 1961
Key mandates:
› Chairman of the Board of
Trustees of SanArena, Zurich
› Member of the Board of Trustees
of the Excellence Foundation
for Economic & Social Research
at the University of Zurich, Zurich
› Member of the Board of Trustees
of the BlueLion Incubator, Zurich
› Chair of the SME Advisory Board
ZH
› Member of the Advisory Board
of Umwelt Arena Schweiz,
Spreitenbach
Roger Liebi was elected to the
Chairperson’s Committee in June
2019. Roger Liebi has been a
member of the Board of Directors
since 2018. He began his career
in 1981 at Union Bank of Switzer-
land in Thun, where he worked in
commerce, retail client business
and as a foreign exchange / money
market dealer at various locations.
He rose to the rank of vice-director
in international private banking,
working, for instance, for the par-
tially state-owned Scandinavian
Nordea Bank (Switzerland) as re-
gional manager of several countries
from 2004 to 2015. In 2017, Roger
Liebi set up his own business in
the field of executive search and
sports management. He was
also involved in the Zurich Banking
Association, in business groups
and as president of an NGO. He was
a member of Zurich City Parliament
from 2002 to 2017, chairing several
committees, such as finance and
audit. As a member of the Canton-
al Parliament of Zurich, he headed
up its Committee for Economic
Affairs and Taxation from 2015
to 2018. He is a member of Zürcher
Kantonalbank’s Risk Committee.
Mark Roth
Deputy Chairman
Swiss Certified Accountant
Swiss national; born in 1974
Key mandates:
› Chairman of the Board of
Directors of Budliger Treuhand
AG, Zurich
› Member of the Board of Trustees
of the Chance Foundation, Zurich
› Member of the Advisory Board
of the Zurich University of the Arts
ZHdK, Zurich
› Chairman of the Management
Committee of the Pension Fund
of Zürcher Kantonalbank and
Chairman of the Board of Trustees
of the Marienburg Foundation,
Zurich
Mark Roth has been a member of
the Board of Directors since
2013 and was appointed to the
Chairperson’s Committee at
the beginning of 2022. He was a
member of the Executive Board
and Head of Auditing for Budliger
Treuhand AG in Zurich from 2009
until 2022. Prior to this, he worked
for Itema (Switzerland) Ltd. in
Rüti and for Ernst & Young, Zurich.
He worked for EY for around one
year in Amman, Jordan, in training
for bank audits. At EXPERTsuisse
he was a member of the Account-
ing Committee from 2012 to
2022. From 2001 to 2006, Mark
Roth was a member of the Zurich
City Council and contributed
his expertise to its audit committee.
Mark Roth is co-author of the
Swiss Handbook of Auditing, vol-
ume “Bookkeeping and Account-
ing”. From 2013 until his election
to the Chairperson’s Committee,
he was a member of the Audit
Committee of the Board of Dir-
ectors, which he chaired from 2015.
He is a member of the Board of
Director’s IT Committee of Zürcher
Kantonalbank.
Chairperson’s Committee
80
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Board of Directors
Amr Abdelaziz
Member of the Board
of Directors
lic. iur. attorney-at-law
Swiss / Egyptian national;
born in 1977
Key mandates:
› None
Amr Abdelaziz studied law at the
University of Zurich and the Univer-
sity of Geneva, and completed
a Master of European Law degree
(L. L. M.) at the College of Europe
in Bruges, Belgium. He was elected
to the Board of Directors in 2015.
From 2007 to 2015, he worked as
a lawyer at CMS von Erlach Poncet
AG, Zurich, specialising in cartel
investigations. Today he is a partner
in a law firm specialising in criminal
law. He is a member of the Audit
Committee and the Compensation
and Personnel Committee of the
Board of Directors of Zürcher Kan-
tonalbank.
Sandra Berberat Kecerski
Member of the Board
of Directors
Swiss Certified Accountant,
Executive MBA HSG
Swiss / Canadian national;
born in 1976
Key mandates:
› Managing Partner in Goldenberg
Immobilien GmbH, Kefikon
› Managing Partner of Rychenberg
Consulting GmbH, Kefikon
› Member of the Executive Board
of Expertsuisse, Zurich
› Member of the Board of Trustees
of the Stiftung für Kleinsiedlun-
gen, Winterthur
Sandra Berberat Kecerski has been
a member of the Board of Directors
since February 2022. She has man-
aged Goldenberg Immobilien
GmbH since 2014 and Rychenberg
Consulting GmbH since 2023. In
addition, since 2020 she has
chaired the audit committee of
EXPERTsuisse, the expert associa-
tion for auditing and taxes. Her
professional career took her to
Deloitte AG in Zurich as Manager
of Audit & Advisory in 2005 and to
UBS AG as a specialist in financial
reporting in 2011. From 2014 to
2020, she led the financial control
department of Winterthur munici-
pal administration. Sandra Berberat
Kecerski is a Swiss Certified Ac-
countant and Business Economist
and holds an Executive MBA from
the University of St. Gallen. She is a
member of the Audit Committee
and the Compensation and Person-
nel Committee of the Board of
Directors of Zürcher Kantonalbank.
Adrian Bruhin
Member of the Board
of Directors
Prof. Dr. oec.
Swiss national; born in 1981
Key mandates:
› None
Adrian Bruhin has been a member
of the Board of Directors since
October 2020. He studied at the
University of Zurich and earned
a doctorate in economics. From
2010 to 2012, he worked as a
senior economist in the Financial
Stability department at the Swiss
National Bank in Berne. From
2012 to 2016, he was an assistant
professor, and since 2016 he has
been a full professor of economics
at the University of Lausanne.
Adrian Bruhin is an external scien-
tific advisor at Polynomics AG,
Olten. He chairs the Risk Commit-
tee of the Board of Directors of
Zürcher Kantonalbank.
Bettina Furrer
Member of the Board
of Directors
Dr. sc. ETH Zurich and Prof. ZFH
Swiss national; born in 1970
Key mandates:
› None
Bettina Furrer has been a member
of the Board of Directors since June
2019. She studied environmental
science at the Swiss Federal Institute
of Technology Zurich and earned
a doctorate in economics. She also
completed the Executive Manage-
ment Programme at the Swiss
Banking School, Zurich, with dis-
tinction. From 1995 to 2003,
he held a management position
with the rank of Vice President at
UBS AG. She was subsequently
employed by Zurich University of
Applied Sciences, Winterthur, where
she served as a lecturer (2004–
2011) as well as a professor and
Head of the Institute of Sustainable
Development (2012–2018). As a
member of the Sustainability Ad-
visory Board, she advised the man-
agement of Basler Kantonalbank,
Basel, and Bank Cler, Basel, from
2016 to 2019. She has been Head
of the Office of Urban Develop-
ment in the city of Winterthur since
December 2020. She is a member
of the IT and Risk Committees
of Zürcher Kantonalbank’s Board
of Directors.
René Huber
Member of the Board
of Directors
Swiss certified banking expert
Swiss national; born in 1956
Key mandates:
› Mayor of the political municipality
of Kloten
› Chairman of the Board of Dir-
ectors of the Glatt Valley trans-
81
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
port authority (Verkehrsbetriebe
Glattal AG (VBG)), Glattbrugg
› Member of the Board of Directors
of Seitzmeir Immobilien AG,
Zurich
René Huber has been a member of
the Board of Directors since 1 No-
vember 2014. He has served as the
Mayor of Kloten since 2006, and
has been Chairman of the Board of
Directors of the Glatt Valley trans-
port authority, Glattbrugg, since
2011, and a member of the Board
of Directors of Seitzmeir Immobil-
ien AG, Zurich, since 2016. He was
a senior advisor for retail clients
at UBS AG in Kloten until October
2014, after having occupied various
roles at UBS AG. René Huber is a
member of the Management Com-
mittee (as employer representative)
of the Pension Fund of Zürcher
Kantonalbank, and a member of
the Audit Committee and Risk
Committee of the Board of Dir-
ectors of Zürcher Kantonalbank.
Henrich Kisker
Member of the Board
of Directors
Swiss Certified Accountant
Swiss / German national;
born in 1955
Key mandates:
› Directorships in certain group
companies of Senior plc,
Rickmansworth (UK)
› Delegate of the Board of Directors
of NF Technology Holding AG,
Zurich, and member of the Board
of Directors of its subsidiaries,
Schmid & Partner Engineering AG,
Zurich, ZMT Zürich MedTech AG,
Zurich, Zeugi 43 AG, Zurich and
TI Solutions AG, Zurich
Henrich Kisker is a Swiss Certified
Accountant. He was elected to the
Board of Directors in 2015. From
1992 to March 2017, he held the
position of Director of Tax and
Treasury at Senior plc, Rickmans
worth (UK). Between 1989 and
1992, he worked as Lead Auditor
for Arthur Andersen AG, Zurich.
He chaired the Audit Committee
of the Board of Directors of
Zürcher Kantonalbank.
Gregor Kreuzer
Member of the Board
of Directors
Master of Science ETH
Swiss national; born in 1980
Key mandates:
› Member of the Board of Directors
of qashqade AG, Zurich
Gregor Kreuzer holds a Master of
Science in Physics from ETH Zurich.
He is a co-founder and member
of the Board of Directors and Risk
Manager of qashqade AG,
a company specialising in financial
mathematics software for fund
managers, institutional investors
and auditors. He began his pro
essional career as a consultant for
IT and management at Synpulse,
a management consultancy
specialising in financial service pro-
viders. Gregor Kreuzer then
worked in product development
and risk management at Executive
Wealth Management, a FinTech
founded in Zurich. He holds
a Master of Business Administra-
tion (MBA) from the University of
Berne and the University of
Rochester. Gregor Kreuzer was a
member of the Zurich Cantonal
Parliament from 2021 to 2023 and
was a member of both the Execu-
tive Board and the Board of Di
rectors of the GLP Kanton Zurich
political party from 2017 to 2024.
He is a member of both the
Audit Committee and the IT Com-
mittee of the Board of Directors
of Zürcher Kantonalbank.
Walter Schoch
Member of the Board
of Directors
dipl. El. Ing. FH Technikum
Winterthur; MA in Theology at
the University of Lampeter, UK /
Swiss national; born in 1956
Key mandates:
› Chairman of the Board of
Trustees of “acasa männedorf”,
Männedorf
The engineer and theologian Walter
Schoch was elected to the Board
of Directors in 2015. He was a
member of the Cantonal Parliament
from 2007 to 2015 and served
as Justice of the Peace in the muni
cipalities of Bauma, Wila and
Wildberg from 2003 until 2021.
After working for BBC Oerlikon as
a project manager (1982 to 1983)
and for Imeth AG, Wetzikon,
as technical director (1983 to 1987),
he worked for Swisscom AG,
Zurich, from 1987 to 2003 as key
account manager, senior project
manager and divisional director.
In 2005, Walter Schoch began his
studies at the University of
Lampeter in the UK, while simul
taneously managing the MEOS Me-
dia department at MEOS Svizzera.
From 2007 to 2010, he headed up
the Swiss Mission Fellowship’s of-
fice in Winterthur. He chaired the IT
Committee of the Board of Dir-
ectors of Zürcher Kantonalbank.
Hans-Ueli Vogt
Member of the Board
of Directors
Prof. Dr. iur., LL.M., MBA,
attorney-at law
Swiss national; born in 1969
Key mandates:
› Member of the Board of Directors
of SRG SSR, Berne
Hans-Ueli Vogt is a full professor of
private and commercial law at
the University of Zurich. He teaches,
82
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
publishes and lectures primarily in
the areas of stock corporation law
and corporate governance. He is
co-editor of the Zeitschrift für Ge-
sellschafts- und Kapitalmarktrecht
and of a major legal commentary
on company law. Hans-Ueli Vogt is
an attorney-at-law who advises
and provides expert opinions for
companies, boards of directors and
private individuals. He also acts as
an arbitrator on various occasions.
Prior to that, he was a consultant
at the Zurich law firm Homburger
and an associate at the law firm
Sullivan & Cromwell in New York.
Since 2024, Hans-Ueli Vogt has
been a member of the Board of Di-
rectors of Zürcher Kantonalbank
and the Board of Directors of the
SRG SSR media company. From
2015 until 2021 he was a member
of the Swiss National Council,
where he played a key role in shap-
ing the revision of company law
on 19 June 2020. In 2022, he stood
as the SVP parliamentary group’s
candidate for the Swiss Federal
Council. Hans-Ueli Vogt speaks Ger-
man, English, French and Italian.
He chairs the Compensation and
Personnel Committee of Zürcher
Kantonalbank’s Board of Directors.
Claudia Zimmermann
Member of the Board
of Directors
CFA, Business Economist HWV
Swiss national; born in 1970
Key mandates:
› Vice-Chair of the Board of
Directors SKAT Consulting AG,
St. Gallen
› Member of the Board of Directors
of Auwiesen Immobilien AG,
Winterthur
› Member of the Board of Directors
Aravis Biotech II GP AG, Zurich
Claudia Zimmermann is a business
economist HWV with a degree as a
Chartered Financial Analyst (CFA)
and a CAS in Applied History from
the University of Zurich. She is the
founder and managing director
of C-Advisory GmbH, which advises
and supports companies and or-
ganisations in the private and pub-
lic sectors with a focus on finance,
ESG and digitalisation. Claudia
Zimmermann is also a board mem-
ber of Swiss SMEs in the areas of
international cooperation, energy
and real estate. She is involved
in the start-up challenge venture of
ETHZ and EPFL, as well as in the
ESG committee of the CFA Society
Switzerland. Claudia Zimmermann
has many years of management
and professional experience in in-
ternational companies in the fields
of ICT, private equity, financial
and strategy consulting, as well as
in industry. She is a member of the
Risk Committee and the Compen-
sation and Personnel Committee of
the Board of Directors of Zürcher
Kantonalbank.
Audit
Jörg Steinger
Head of Audit
Dr. oec. HSG, Swiss Certified
Accountant, CFE
Swiss national; born in 1967
Key mandates:
› None
Jörg Steinger has held the position
of Head of Audit since 1 July 2023.
He joined Zürcher Kantonalbank
in April 2023. Prior to this, he spent
nine years as Head of Internal Audit
at Bank Vontobel AG in Zurich,
14 years in various functions in in-
ternal audit and risk management
at Luzerner Kantonalbank, Lucerne,
and five years at Credit Suisse,
Zurich.
83
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Stephanino Isele
Head of Institutionals &
Multinationals,
Deputy Chief Executive Officer
Dr. oec. publ.
Swiss national; born in 1962
Key mandates:
› Deputy Chairman of the Board of
Directors of Swisscanto Holding
Ltd., Zurich
› Deputy Chairman of the Regulatory
Board of SIX Swiss Exchange AG,
Zurich
› Member of the Advisory Board
of the Institute for Banking and
Finance at the University of
Zurich (IBF), Zurich
› Deputy Chairman of the Board
of Trustees of the Swiss Finance
Institute, Zurich
Dr Stephanino Isele has been Head
of Institutionals & Multinationals
since 1 April 2014 as well as Deputy
Chief Executive Officer since 1 May
2021. He joined Zürcher Kantonal-
bank on 1 January 2008 as the Head
of Trading, Sales & Capital Markets
after holding various national and in-
ternational roles at J. P. Morgan & Co.
and Morgan Stanley in London,
most recently as COO, where he
dealt with equity derivatives.
Jürg Bühlmann
Head of Corporate Banking
Dr. oec. publ.
Swiss national; born in 1967
Key mandates:
› Member of the Board of Directors
of SIX Group, Zurich
› Member of the Board of Directors
of Venture Incubator AG, Altendorf
› Member of the Board of Trustees
of Swiss GAAP FER, St. Gallen
› Member of the Boards of Trustees
of Swisscanto Anlagestiftung,
Zurich, and Swisscanto Anlages-
tiftung Avant, Zurich
Executive Board
Urs Baumann
Chief Executive Officer (CEO)
Master of Arts and Master
of Business Administration
Swiss national; born in 1967
Key mandates:
› Member of the Board of Directors
of the Swiss Bankers Association,
Basel
› Deputy Chairman of the Board
of Directors of the Association
of Swiss Cantonal Banks, Basel
› Deputy Chairman of the ZKB
Philanthropy Foundation, Zurich
Urs Baumann has been the Chief Ex-
ecutive Officer since 1 September
2022. He has many years of experi-
ence in domestic and international
management as a board member,
group CEO, general manager
and managing director. He started
his career in 1993 as a consultant
with McKinsey & Company in Zurich.
From 1998, he gained professional
experience in the finance and bank-
ing sector at Swisscard in Horgen,
Barclays Bank PLC in London, Lindorff
Group in Oslo and Bellevue Group
AG in Küsnacht. In 2015, Urs Bau-
mann co-founded Blue Earth Capital
AG in Zug (formerly PG Impact In-
vestments AG), which he led as CEO
until March 2022. Urs Baumann
holds a Master of Arts degree from
the University of St. Gallen and an
MBA degree from the University of
Chicago Booth School. He is a
member of the Board of Directors
of the Swiss Bankers Association,
Deputy Chairman of the Board of
Directors of the Association of Swiss
Cantonal Banks, Basel, Deputy
Chairman of the ZKB Philanthropy
Foundation, Zurich, and a member
of the Board of Directors of Zürcher
Volkswirtschaftliche Gesellschaft.
Dr Jürg Bühlmann has headed the
Corporate Clients business unit since
1 January 2020. From 2012 to June
2019, he managed the Logistics
business unit as a member of the Ex-
ecutive Board. He studied business
management at the University of Zu-
rich, where he gained a doctorate.
His initial role with Zürcher Kantonal-
bank was in Controlling. From 2002
until his appointment as a member
of the Executive Board, he held a
variety of positions within the Logis-
tics business unit. His main duties
were the management of strategic
IT projects (a sub-area of the IT unit)
and the Real Estate unit.
Florence Schnydrig Moser
Head of Private Banking
Master Mathematics at the
ETH Lausanne, CFA
Swiss national; born in 1972
Key mandates:
› Chair of the Supervisory Board of
Zürcher Kantonalbank Österreich
AG, Salzburg
› Chair of the Board of Directors
of StiftungSchweiz, Basel
› Member of the Board of Directors
of Advance (Gender Equality in
Business), Zurich
› Member of the Board of Trustees
of the Hasler Foundation, Bern
Florence Schnydrig Moser was ap-
pointed as a member of the Execu-
tive Board as of 1 January 2021, and
has been Head of the Private Bank-
ing business unit since 1 May 2021.
Previously she was CEO of Swisscard
AECS GmbH in Horgen. Florence
Schnydrig Moser worked for Credit
Suisse from 2000 to 2018 in various
functions in the private banking
environment – including in Zurich,
Australia and Hong Kong. Most
recently, as Head of Products, Invest-
ments & Marketing, she was re
sponsible for the development and
84
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
marketing of products for Swiss pri-
vate clients and, as a member of the
Executive Board, had overarching re-
sponsibility within Credit Suisse
(Switzerland) Ltd. Florence Schnydrig
Moser studied mathematics at the
Ecole polytechnique federale de
Lausanne (EPFL) and then passed the
examinations to become a Chartered
Financial Analyst (CFA).
Daniel Previdoli
Head of Products,
Services & Direct Banking
lic. rer. pol.
Swiss national; born in 1962
Key mandates:
› Chairman of the Board of Directors
of Swisscanto Fund Management
Company Ltd., Zurich
› Member of the Board of Directors
of Swisscanto Holding Ltd., Zurich
› Member of the Board of Directors
of TWINT AG, Zurich
› Member of the Board of Directors
of Viseca Payment Services SA,
Zurich
› Deputy Chairman of the Greater
Zurich Area Foundation Board,
Zurich
Daniel Previdoli has been a member
of the Executive Board since 2007.
He became Head of Products,
Services & Direct Banking as of Octo-
ber 2014 after having led the Retail
Banking business unit. Prior to that,
he spent 11 years with UBS including
as Head of Recovery Management
Primaries between 1996 and 2002
and subsequently as Head of Retail
and Corporate Banking for the
Zurich region. From 1987 until 1996,
he held various positions with
Credit Suisse, both in Switzerland
and abroad.
Martin Bardenhewer
Chief Financial Officer (CFO)
Dr. rer. pol.
Swiss / German national;
born in 1967
Key mandates:
› Chairman of the Board of Directors
of Swisscanto Holding Ltd., Zurich
› Member of the Board of Directors
of the Central Mortgage Bond
Institution of the Swiss Cantonal
Banks, Zurich
› Member of the Board of Directors
of the Swiss Banks’ and Securities
Dealers’ Deposit Guarantee
Association, Basel
Martin Bardenhewer was appointed
Head of the Finance business unit
and member of the Executive Board
from 1 May 2023. He joined the
bank in 2001 as the person respon-
sible for the models used to manage
balance sheet risk at Zürcher Kan-
tonalbank. He then served as Head
of Market Risk Controlling and was
in charge of risk measurement in the
trading business. In 2007, he was
promoted to Head of Treasury and
Deputy CFO. After around ten years
in the Finance business unit, he
switched to the Institutionals & Mul-
tinationals business unit in 2017,
which he also headed up in a deputy
capacity. Martin Bardenhewer began
his career as a Senior Consultant
at KPMG Zurich. After studying
economics at the University of Bonn,
he earned his doctorate in econom-
ics at the University of Mannheim.
In 2022, he graduated from the Ad-
vanced Management Programme
at Harvard Business School in Boston.
Remo Schmidli
Head of IT,
Operations & Real Estate
Computer science graduate,
Executive Master of Business Admin-
istration ZFH from the University
of Applied Sciences in Business Ad-
ministration, Zurich
Swiss national; born in 1978
Key mandates:
› Member of the Board of Directors
of Swiss Fintech Innovations (SFTI),
Zurich
Remo Schmidli has been Head of
IT, Operations & Real Estate and
a member of the Executive Board
since 1 July 2019. Prior to that, he
held a variety of positions at Zürcher
Kantonalbank starting in 2001, in-
cluding in the areas of IT and project
management. He took charge of
Multichannel Management in the
Products, Services & Direct Banking
business unit in 2014.
Hjalmar Schröder
Chief Risk Officer (CRO)
Degree in theoretical physics,
Chartered Financial Analyst (CFA)
Swiss / German national;
born in 1971
Key mandates:
› None
Hjalmar Schröder has been the
bank’s Chief Risk Officer since April
2024. He joined Zürcher Kantonal-
bank in 2015 as Senior Market Risk
Engineer and was responsible as
project manager for the implemen-
tation of the new regulatory stand-
ards under Basel III. He then took
over as Head of the Market Risk
department. From 2020 until his ap-
pointment to the Executive Board,
Hjalmar Schröder was Head of Sales
and Trading for Foreign Exchange
and Precious Metals. He began his
career in 1996 at Swiss Bank Cor-
poration – UBS from 1997 – where he
held various management positions,
including Executive Director for auto-
matic pricing in foreign exchange
and the money market, then Man-
aging Director for the further devel-
opment of the electronic trading
platform. In his last role at UBS, he
led the global IT team for interest
rate and foreign exchange trading.
From 2013 to 2016, Hjalmar
Schröder was a member of the
85
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Executive Board of EMFA Holding
AG in Kerns, which invests in
agricultural businesses in Romania.
Hjalmar Schröder graduated from
the Technical University of Berlin
with a degree in theoretical physics
and holds a Chartered Financial
Analyst (CFA) qualification.
86
Zürcher Kantonalbank Annual Report 2024
› Corporate Governance
Compen-
sation
Report
2024
Zürcher Kantonalbank
87
Zürcher Kantonalbank Geschäftsbericht 2024
› Vergütungsbericht
87
Zürcher Kantonalbank Geschäftsbericht 2024
88
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Foreword by the Board
of Directors to the
Compensation Report
Competences and
compensation policy
Compensation groups
Components of compensation
Compensation in 2024
90
92
94
95
97
Contents
89
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Zürcher Kantonalbank collaborated in 2023 with HCM
International, a recognised external expert, to compre-
hensively review and adapt its compensation system.
The resulting findings were implemented as of 1 Janu-
ary 2024 and are now visible for the first time in this
Compensation Report 2024. The changes included the
following aspects, among others:
– total compensation in line with the market
– calculation model for variable compensation
– reorganisation of long-term deferred compen-
sation
– increased transparency
– total compensation of the CEO and Executive
Board capped until further notice
Total compensation in line with the market
The review in 2023 showed that Zürcher Kanton-
albank’s total compensation (base salary plus variable
compensation) reflects its positioning as the second-larg-
est universal bank and the complexity of its business
model. It was noted that while total compensation is in
line with the market, the variable compensation com-
ponent is too high. This is due to the fact that Zürcher
Kantonalbank does not have a bonus model, rather a
profit-sharing model (variable compensation is paid out
only if a profit is generated), and the variable compen-
sation has increased continuously in recent years due
to the steady profit growth. In contrast, the base sal-
aries have been adjusted only slightly for some time.
This means they tended to be too low compared to the
rest of the industry. Consequently, a portion of varia-
ble compensation has been shifted to base salary as of
1 January 2024. A certain deduction (a 6 percent “secu-
rity premium”) was made in acknowledgement of the
fact that a secure franc in base salary is “worth more”
than an insecure franc in variable compensation. The
different employer pension fund contributions were also
taken into account. This adjustment to the compensa-
tion structure will now be visible for the first time in the
Compensation Report 2024.
Calculation model for variable
compensation
The total of the 2024 variable compensation pool
will be calculated for the first time using a recalibrated
model to take account of the adjustment to the compen-
sation structure made as of 1 January 2024 (see “Total
compensation in line with the market”). In addition, a
further adjustment was made to the calculation of the
profit-sharing model, which will lead to a significant
flattening of the growth of the variable compensation
pool in future. Also, the consideration of risk in variable
compensation was further sharpened with regard to ex-
traordinary risk events.
Reorganisation of long-term deferred
compensation
Long-term deferred compensation for the Execu-
tive Board and senior management has been given sig-
nificantly more weight in order to anchor the sustaina-
Foreword by the Board
of Directors to the
Compensation Report
90
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
bility of the success of Zürcher Kantonalbank even more
firmly in compensation. To this end, the portion of the
variable compensation that is blocked for three years
and exposed to risk during this period has been doubled
(and now stands at 50 percent for the Executive Board
including the CEO and 30 percent for senior manage-
ment). In addition, long-term deferred compensation is
now divided into a value-oriented and a debt-oriented
portion. The performance of value-oriented long-term
deferred compensation can rise, fall or even lapse com-
pletely depending on the change in economic profit. The
debt-oriented long-term deferred compensation bears
interest in line with the risk and is subject to the same
risks as the outstanding AT1 bonds of Zürcher Kantonal-
bank. In addition, payment of both portions is linked to
achieving set targets in the public service mandate, in the
form of a penalty of up to 20 percent if the targets are
not met. The revised structure of the long-term deferred
compensation will now be applied for the first time for
the long-term deferred compensation allocated based
on variable compensation in 2024.
Increased transparency
Zürcher Kantonalbank also decided this year to
revise the structure of the Compensation Report. The
structural revision leads to greater transparency and clar-
ity for readers.
This Compensation Report relates to the parent
company of Zürcher Kantonalbank and describes the
principles of compensation as well as the competences
and responsibilities for determining the compensation
of the Board of Directors and the Executive Board of
Zürcher Kantonalbank. The report also contains infor-
mation on compensation plans and the compensation
paid to the Board of Directors and the Executive Board
in 2024. From the 2024 reporting year onwards, the
compensation of the Executive Board will be shown in
a table to provide a better overview. To increase trans-
parency, a consistent distinction continues to be made
between allocated total compensation and realised total
compensation of the Executive Board members active in
the financial year.
The Compensation Report contains the following
elements:
– competencies and compensation policy
– compensation groups
– components of compensation
– compensation in 2024
Total compensation for the CEO and
Executive Board capped until further notice
The Board of Directors has decided to cap until
further notice the total compensation for the CEO and
the Executive Board from the 2023 financial year on-
wards on the basis of the 2022 financial year. According-
ly, the total compensation of the individual members of
the Executive Board, including the CEO, cannot exceed
the amount of total compensation paid out for 2022.
However, it may be reduced in the event of poor busi-
ness performance.
91
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Competencies and
compensation policy
As a public-law institution, Zürcher Kantonalbank gen-
erally follows the SIX Swiss Exchange directive on cor-
porate governance, the Swiss Code of Best Practice for
Corporate Governance promulgated by Economiesuisse,
and the FINMA requirements set out in Circular 2010 / 1
“Remuneration Schemes”.
The compensation guidelines are set out in the
Personnel and Compensation Regulations issued by the
Board of Directors for Zürcher Kantonalbank and apply
throughout the group. The procedures for determining
compensation are structured and documented by the
group companies. The compensation paid by the con-
solidated subsidiaries also fulfils the relevant requirements
in an appropriate manner.
Competencies
The Zurich Cantonal Parliament has overall supervi-
sion of the bank in accordance with the Cantonal Bank-
ing Act on Zürcher Kantonalbank (Zürcher Kantonalbank
Act). It is also responsible for approving the regulations
on the compensation of members of the Board of Dir-
ectors, which are issued by the Board of Directors subject
to approval by the Cantonal Parliament.
In its decisions, the Board of Directors takes into
account not only the interests of Zürcher Kantonalbank
and its employees, but also the interests of the Canton
of Zurich. To that end, for example, it issues the regula-
tions regarding personnel and compensation at Zürcher
Kantonalbank.
The Compensation and Personnel Committee is the body
of the Board of Directors responsible for compensation
policy. It prepares the corresponding transactions for the
Board of Directors, gives its view on compensation issues
that fall within the remit of the Chairperson’s Committee
and Board of Directors, and reviews the market conform-
ity of compensation for the bank as a whole. The Com-
pensation and Personnel Committee has the following
duties and powers for determining compensation policy:
– making recommendations to the Board of Di-
rectors on the strategic and human resource
policy principles of the pension funds from the
employer’s viewpoint
– making recommendations on principles con-
cerning the compensation of members of the
Executive Board and Internal Audit, as well as
any profit-sharing and benefit programmes
– evaluating the bank’s compensation system, spe-
cifically with regard to its sustainability and the
avoidance of false incentives
Compensation policy
Zürcher Kantonalbank’s compensation policy is
aligned with the bank’s business strategy, objectives
and values. It takes into account the long-term financial
interests of the bank and supports solid and effective risk
management. The compensation policy is also aimed at
attracting and retaining highly qualified employees in
the long term. Through our compensation policy, we rec-
ognise outstanding performances and motivate employ-
ees to continue their professional development. Accord-
ingly, the compensation system of Zürcher Kantonalbank
does not create any incentives to take inappropriate risks
that might affect the bank’s stability or good reputation.
Any compensation (professional or attendance fees, etc.)
received for acting as a delegate or representative of
the bank must be surrendered to Zürcher Kantonalbank.
Any reimbursed expenses are retained by the appointee.
Zürcher Kantonalbank’s principles of compensation are
based on the following objectives:
– promoting close cooperation within manage-
ment and ensuring that all actions are under-
taken in the interests of the bank as a whole as
well as its integrated business and risk model
– motivating employees to create lasting added
value while taking account of the risks
– promoting a performance-led environment for
the benefit of the bank as a whole
– ensuring that risks are adequately reflected in
the variable compensation
– offering competitive, balanced compensation for
comparable jobs
– ensuring that the compensation arrangements
do not give rise to conflicts of interest and pro-
mote the independence of the control units.
Competencies
Body responsible
Compensation of the Chairperson’s
Committee and part-time members
of the Board of Directors
Cantonal Parliament, based on
proposal of the Board of Directors
Setting up or amending
compensation plans
Board of Directors, based on
recommendation of the
Compensation and Personnel
Committee
Determining total amount
of variable compensation
Board of Directors, based on
recommendation of the
Compensation and Personnel
Committee
Compensation for CEO
Board of Directors, based on
proposal of the Chairperson’s
Committee
Compensation of the members
of the Executive Board
Board of Directors, based on
proposal of the Chairperson’s
Committee
Compensation for Head of
Internal Audit and their deputy
Board of Directors, based on
proposal of the Chairperson’s
Committee
Compensation for senior
management
Executive Board
Competencies and responsibilities
92
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Benchmarks
Zürcher Kantonalbank attaches great importance
to offering compensation that is competitive within the
industry in terms of structure and level. To this end, the
bank conducts annual market comparisons in cooper-
ation with various specialised consulting firms. The ex-
ternal consultants did not carry out any other mandates
for Zürcher Kantonalbank in the financial year.
Zürcher Kantonalbank measures itself against
Swiss financial institutions. Additional compensation
parameters are taken into account, such as the size of
the organisation, number of employees, hierarchy, depth
of the organisation, geographical reach and internation-
ality. If required, further parameters or consultancy firms
can be consulted.
Consideration of risks
It is a core element of the compensation policy
that compensation supports sound and effective risk
management and acts in line with the integrated risk
model. This is ensured, among other ways, by calculating
the pools of variable compensation for the parent com-
pany and Trading on the basis of risk-adjusted results
(see “Variable compensation”, p. 97 f.):
– The variable compensation pool of the parent
bank is based on the consolidated result after
adjusting for the cost of risk capital and (at a
minimum) the generation of the cost of equity.
– The variable compensation pool for Trading is
calculated based on the adjusted result of the
Trading, Sales & Capital Markets organisational
unit (OU). This is also adjusted by the risk costs
for default and market risk of the individual
Trading desks.
Determining the compensation of individuals
with increased responsibility
With regard to compensation, individuals with
increased responsibility (see “Compensation groups”,
p. 96 f.) undergo a performance assessment and develop-
ment process like all other employees. The performance
evaluation also takes account of risk aspects, any breach-
es of internal or external directives and guidelines, or
misconduct and associated disciplinary proceedings that
could negatively affect the bank’s reputation. Individual
performance is discussed regularly with the line manag-
er. During the process of allocating and paying variable
compensation components to individuals with increased
responsibility in the Trading, Sales & Capital Markets OU,
the independent control functions Legal & Compliance,
Risk Management and People & Culture are consulted.
In addition, risk is taken into account for deferred
compensation. Deferred compensation components may
lapse in full or in part if negative business developments
or other predefined conditions occur (see “Long-term
deferred compensation” (p. 95), “Deferred compensation
exposed to risk” (p. 96) and “Penalty clause” (p. 93) for
further details on possible reductions).
As stated in the section “Competencies” (p. 92),
the Board of Directors determines the compensation of
the members of the Executive Board at the request of
the Chairperson’s Committee. The Executive Board de-
termines the compensation of individuals with increased
responsibility in senior management at the request of the
relevant member of the Executive Board. The Head of
Institutionals & Multinationals determines the compensa-
tion of individuals with increased responsibility in Trading,
Sales & Capital Markets at the request of the head of this
organisational unit.
Penalty clause
Employees’ variable compensation is not or only
partially paid out at the bank’s discretion if they have
violated contractual, risk or compliance requirements
before the date of the intended payment, or if the bank
has otherwise sustained losses due to their activity. More
over, the bank’s compensation models stipulate that such
employees are deemed “bad leavers” when they leave
the bank, and their entitlement to any deferred com-
pensation components lapses. The breach of laws, codes
of conduct, directives or internal rules may also lead to
additional disciplinary measures, which may entail the re-
duction or forfeiture of variable compensation and / or of
deferred compensation or similar elements of compensa-
tion. In the event of ongoing investigations or suspicion
of misconduct that could lead to disciplinary measures,
Zürcher Kantonalbank is entitled to delay payment of
variable compensation and / or deferred compensation
and similar elements of compensation until the matter
has been definitively clarified or the sanction decided.
Under the “bad leaver” rule, the long-term deferred
compensation as well as the deferred compensation ex-
posed to risk may lapse in full if Zürcher Kantonalbank
parts company with employees for certain reasons. This
may in particular be the case where employees have
committed a breach of contract or caused material or
non-material damage, or the relationship of trust be-
tween them and the bank has suffered lasting damage
as a result of their conduct.
Sign-on and severance payments
Payments agreed in connection with the signing
of an employment contract such as guaranteed bonuses
or bonus buyouts (including any clawback agreements
with the previous employer) are referred to as sign-on
payments. Zürcher Kantonalbank agrees to such pay-
ments only on an exceptional basis and only in justified
individual cases.
Payments agreed in connection with the term-
ination of an employment relationship are referred to as
93
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
severance payments. Zürcher Kantonalbank’s employ-
ment contracts do not contain any pre-agreed severance
payments or notice periods that differ from the general
terms and conditions of employment.
Qualifying sign-on and severance payments must
be approved by the Chairperson’s Committee in compli-
ance with clear decision-making processes and are paid
out only subject to strict conditions.
Compensation groups
Board of Directors and Chairperson’s
Committee
The compensation of the members of the Board
of Directors and the Chairperson’s Committee is based
on the regulations governing the compensation of mem-
bers of the Board of Directors of Zürcher Kantonalbank,
as approved by the Cantonal Parliament of Zurich on
25 November 2004. In principle, these regulations are
unchanged compared with those prevailing in 1989
(Chairperson’s Committee) and 1994 (Board of Dir-
ectors) and were never adjusted for inflation. Part-time
members of the Board of Directors receive a fixed annual
salary plus compensation per membership in one of the
four committees (Compensation and Personnel Commit-
tee, Audit Committee, Risk Committee, IT Committee;
see “Corporate Governance Report”, p. 69, 73 ff.) as well
as an expense allowance. An attendance fee is paid for
meetings, visits to specialist units and branch offices, as
well as for training and development events.
The members of the Chairperson’s Committee are
full-time members of the Board of Directors. They each
receive a fixed annual base salary, an expense allowance
as well as the benefits set out in the relevant regulations
for all Zürcher Kantonalbank employees. The Chairper-
son receives an additional allowance of 10 percent of
their annual base salary.
No variable compensation is paid to the members
of the Board of Directors or the Chairperson’s Commit-
tee. The components of compensation insured in the
Zürcher Kantonalbank pension fund are the annual sal-
ary and committee compensation (excluding attendance
fees) for the members of the Board of Directors, and the
base annual salary for members of the Chairperson’s
Committee.
Internal Audit
In view of Internal Audit’s special function, the
Head of Internal Audit and employees who report direct-
ly to the Head do not receive any variable compensation.
Their entire compensation takes the form of a fixed an-
nual salary.
Executive Board incl. CEO
Compensation for the members of the Executive
Board including the CEO is based on Zürcher Kanton-
albank’s overall compensation policy. Variable compen-
sation is paid to the members of the Executive Board
in addition to the base salary, depending on the group
result and individual managers’ performance. Part of
the variable compensation takes the form of long-term
deferred compensation.
Individuals with increased responsibility
In accordance with FINMA guidance, one of the
compensation groups is defined as individuals with
increased responsibility, who are subject to the rules
for deferred variable compensation. The following are
deemed individuals with increased responsibility:
– the Executive Board
– senior management
– selected employees in the Trading, Sales & Capi-
tal Markets OU who exceed a defined threshold
in relation to variable compensation
A total of 77 employees were assigned to this group
during the financial year, nine of whom were members
of the Executive Board including the CEO.
Senior management
In addition to the Executive Board including the
CEO, senior management has a sustained influence on
the bank’s business operations (risks, image, etc.) and
therefore on the group result and the implementation
of the strategy. Senior management accounts for ap-
proximately 1 percent of the total headcount. As with
the Executive Board, variable compensation is paid – in
addition to the base salary. The variable compensation
is linked to the group result and individual managers’
performance. Part of the variable compensation (long-
term deferred compensation) is deferred, as in the case
of the Executive Board.
Other management and employees
In principle, all of the bank’s employees are en-
titled to a variable element of compensation on top of
their base salary. The amount of variable compensation
allocated to each employee depends on the group re-
sult, as well as their position, individual performance
and conduct. Selected employees in the Trading, Sales
& Capital Markets OU are subject to a different compen-
sation model. As with the Executive Board and senior
management, a portion of the variable compensation is
deferred for individuals with increased responsibility in
Trading and is exposed to future risk as deferred com-
pensation exposed to risk.
94
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Components
of compensation
Zürcher Kantonalbank’s compensation policy applies the
total compensation approach, which comprises the fol-
lowing compensation components in accordance with
the table below. The base salary, variable compensation
and deferred compensation are explained in greater de-
tail below.
Base salary
Contractually agreed,
regularly paid salary
Variable
compensation
Variable component of salary that is
contingent on result and performance
Deferred
compensation
(long-term deferred
compensation and
deferred compensation
exposed to risk)
Element of compensation based on
sustainable success of the business deferred
for a longer period
Statutory allowances
and additional
benefits
Child, education and family allowances
(Agreement on Conditions of Employment
for Bank Staff), allowances under the
Employment Act, expense allowances,
allowance for years of service, etc.
Components of compensation
Base salary
Base-salary levels are usually reviewed annually.
The amount of the base salary is determined by the em-
ployee’s position, experience and skills, and takes account
of their individual sustainable performance. Adjustments
are made to reflect market conditions, affordability, in-
dividual performance and the overall financial position
of Zürcher Kantonalbank.
Variable compensation
Variable compensation is a central component
of compensation practice and adapts to changes in
business performance, as Zürcher Kantonalbank has a
profit-sharing model rather than a bonus model. That
means Zürcher Kantonalbank pays variable compensa-
tion only if it realises a profit. The parent bank’s pool
for variable compensation is based on a proportional
share of the group result, with capital and risk costs
taken into account. The cost of equity is the threshold
for the payment of variable compensation. No varia-
ble compensation is paid if the group result falls below
the cost of equity. An interest rate on market terms is
applied to the total amount of equity to calculate the
cost of equity. For the purposes of calculating variable
compensation, the standard risk costs are considered to
be the risk costs instead of the default risk costs actually
incurred. However, if the actual default risk costs exceed
twice the standard risk costs, the default risk costs in
excess of twice the standard risk costs are recognised
in addition to the standard risk costs. The standard risk
costs correspond to the model-based average defaults
per year expected over an entire economic cycle. This
evens out the annual default risk costs, which would
otherwise be irregular. By taking account of standard
risk costs, the annual accounts include risk costs arising
from current business volumes under the model. This
means that management decisions to focus on specific
products or markets immediately incur the relevant risk
costs. Using this procedure ensures that the basis for
calculating the variable compensation pool is geared
towards sustainable growth for the bank.
The variable compensation for Trading is deter-
mined on the basis of its operating result less risk and
capital costs. These are calculated on the basis of the
standard risk costs for default risks and the cost of risk
capital in accordance with internal models for default as
well as market risks (internal capital-at-risk models). The
capital-at-risk approach is used to determine the inter-
nally required capital that is tied up for a year on account
of market and default risks in connection with trading
activities. The maximum risk capital available for trading
activities is allocated annually by the Board of Directors.
This allocation takes into account the bank’s strategic
orientation and capital planning for the coming years.
This risk capital is charged to the result of the Trading,
Sales & Capital Markets OU using a customary market
interest rate.
For all employees, the amount of variable com-
pensation allocated to each employee depends on their
position, individual performance and conduct. Variable
compensation is set by the bank and may be forfeited
in full at its discretion due to inadequate individual per-
formance, staff misconduct (see “Penalty clause”, p. 93)
or a poor business result.
Long-term deferred compensation
For the CEO, members of the Executive Board and
senior management, part of the variable compensation
takes the form of long-term deferred compensation that
is deferred for three years. The long-term deferred com-
pensation allocated (CEO and Executive Board 50 per-
cent, senior management 30 percent) will be split in half
into a value-oriented and a debt-oriented portion for the
first time in 2024 for deferral of variable compensation.
The value-oriented long-term deferred compen-
sation is linked to the performance of the group’s eco-
nomic profit. The target value to be achieved over the
three-year performance period is determined for each
allocation at the beginning of the period. The definitive
value of the value-oriented long-term deferred compen-
sation is determined after three years at the end of the
term and amounts to a maximum of 1.5 times and a
minimum of 0.5 times the amount originally deferred
95
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
(allocated). In the event of a cumulative negative eco-
nomic consolidated profit over the three years, the val-
ue-based long-term deferred compensation lapses.
The amount of the debt-oriented long-term de-
ferred compensation does not move in line with eco-
nomic profit, but earns interest in line with the risk. The
interest rate is based on the yield of a three-year AT1
bond issued by Zürcher Kantonalbank and is set at the
beginning of the three-year term. The debt-oriented
long-term deferred compensation is subject to the same
risks as the outstanding AT1 bonds of Zürcher Kanton-
albank. If the outstanding AT1 bonds absorb losses, all
outstanding debt-linked long-term deferred compensa-
tion components including interest will lapse.
Also since the 2024 financial year, payment of the
entire long-term deferred compensation, i. e. both the
value-oriented and the debt-oriented portion, is linked
to achieving targets set under the public service man-
date after a three-year term. Failure to meet the targets
results in a penalty of up to 20 percent of the realised
total amount of the value-oriented and debt-oriented
deferred compensation.
Long-term deferred compensation created before
the 2024 financial year will continue until the end of the
term in accordance with the model in force at the time
of allocation. The corresponding explanations can be
found in the previous annual reports.
Deferred compensation exposed to risk
For certain employees in the Trading, Sales & Cap-
ital Markets OU who bear greater responsibility in terms
of results and risks, and whose variable compensation
exceeds a defined threshold, a portion of this variable
compensation is deferred and exposed to risk. A deferral
period of now three years (previously two years) will
apply from the 2024 financial year onwards. At the re-
quest of the Head of the Institutionals & Multinationals
business unit, the CEO and Head of People & Culture,
who are both independent of the Trading, Sales & Capital
Markets OU, may impose a penalty, i. e. a reduction or
forfeiture of deferred compensation exposed to risk, for
individual employees, particularly in the event of:
– significant financial losses at department, desk
or individual level
– reputational damage or actions that may be
detrimental to Zürcher Kantonalbank, such as
activities that breach regulations and result or
may result in sanctions being imposed by FINMA
– activities that cause significant numbers of clients
to leave the bank
– inappropriate risk-taking outside of the ordinary
risk processes
Recipient
Due
Sunset
Performance, penalty clauses
Perfor-
mance-
related 1
Variable compensation
Permanent
employees
Immediately
Yes
Dependent on individual performance;
may be cancelled altogether in the event of
misconduct or poor group financial results.
Yes
Long-term deferred
compensation
Executive Board,
senior management
Payment
after
three years
Yes
Half is dependent on the performance of eco-
nomic profit (forfeiture in the event of negative
economic profit). The other half bears interest
in line with the yield of an AT1 bond from
Zürcher Kantonalbank and is subject to the cor-
responding risks (forfeiture if AT1 bonds absorb
losses). Failure to achieve set targets from the
public service mandate can lead to a penalty on
the entire long-term deferred compensation.
Yes
Deferred compensation
exposed to risk
Certain employees
in the Trading,
Sales & Capital Markets
OU
Payment
after
three years
Yes
Interest at the risk-free interest rate. Amount
of cash sum paid out on due date depends on
whether a penalty has been imposed.
Yes
Overview of variable compensation
1
Taking capital and risk costs into account
96
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Compensation
in 2024
In accordance with the SIX directive, variable compensa-
tion is charged on an accrual basis, i. e. to the financial
year in which it is actually incurred.
With effect from 1 January 2024, Zürcher Kanto
nalbank’s compensation model has been adjusted and
the base salary has been increased at the expense of
variable compensation. As a result of this adjustment, no
general increases in base salary were granted for 2024
for employees who are subject to the bank’s Agreement
on Conditions of Employment. However, selective salary
increases were implemented within existing budgets to
bring employees closer into line with the market.
The proportion of variable compensation allocated
in the form of deferred compensation was also increased
with effect from the 2024 financial year. Both adjustments
partly explain differences compared to the previous year.
Despite a 3 percent increase in the group result
before taxes, variable compensation has been reduced
in total and per employee. This reduction was due in
particular to the change to the compensation structure
as of 1 January 2024. The total amount of variable com-
pensation was CHF 285 million, with a part-time-adjusted
headcount of 5,489 as at the end of the year (previous
year: 5,304), of which CHF 14.4 million was for deferred
compensation (for further information, see the parent
company financial statements, breakdown of personnel
expenses, Note 34).
Sign-on and severance payments approved by the
Chairperson’s Committee in the financial year totalled
CHF 145,000.
2024
2023
Number of
employees 1
in CHF
million
Number of
employees 1
in CHF
million
Total amount
of variable
compensation
5,489
284.6
5,304
353.7
of which
deferred
compensation
77
14.4
96
15.8
Details of variable compensation
(parent company)
1
Part-time-adjusted headcount / weighted FTEs as at year-end
97
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Compensation for members
of the Board of Directors
Compensation for members of the Board of Dir-
ectors is based on the regulations governing the com-
pensation of members of the Board of Directors of
Zürcher Kantonalbank, as approved by the Cantonal
Parliament of Zurich on 25 November 2004. In principle,
these regulations are unchanged compared with those
prevailing in 1989 (Chairperson’s Committee) and 1994
(Board of Directors). The regulations do not stipulate an
inflation adjustment.
For part-time members of the Board of Directors,
compensation comprises a fixed annual salary of
CHF 18,000 plus CHF 6,000 compensation for each
membership of a committee, as well as an annual ex-
pense allowance of CHF 6,000. A fixed attendance fee
of CHF 700 per day and CHF 350 per half-day is paid for
meetings and other activities related to the position. The
part-time members of the Board of Directors are insured
in accordance with federal social security standards and
the regulations of the bank’s pension funds.
As full-time members of the Board of Directors, the
members of the Chairperson’s Committee receive a gross
annual base salary of CHF 311,500. The Chairperson of
the Board of Directors receives an additional allowance
of 10 percent of their annual base salary. Furthermore,
the members of the Chairperson’s Committee receive the
same allowances, additional benefits and preferential
rates as other employees of Zürcher Kantonalbank and
are insured under the regulations of the pension schemes
of Zürcher Kantonalbank. They are paid an annual ex-
pense allowance of CHF 14,000 each.
No variable compensation is paid to the members of the
Board of Directors, either full-time or part-time. No other
compensation or benefits in kind were paid to current or
former part-time members of the Board of Directors or
related parties during the 2024 financial year, apart from
child, education and family allowances (Agreement on
Conditions of Employment for Bank Staff), and farewell
gifts for members stepping down. There are no unusual
commitments between Zürcher Kantonalbank and the
members of the Board of Directors or related parties.
No loans on unusual terms were granted to part-
time members of the Board of Directors or related parties
in 2024.
The members of the Board of Directors and related
parties received no other fees or payments for additional
services rendered to Zürcher Kantonalbank or any of its
subsidiaries during the 2024 financial year.
98
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Year
Annual
compensation
Attendance
fee
Expense
allowance 1
Pensions and
other compen
sation 2 / 3
Total
Loans as at
31.12. in CHF
Chairperson’s Committee
Jörg Müller-Ganz
2024
342,650
–
14,040
88,688
445,378
1,200,000
2023
342,650
–
14,040
91,010
447,700
1,200,000
Roger Liebi
2024
311,500
–
14,040
78,710
404,250
–
2023
311,500
–
14,040
80,132
405,672
–
Mark Roth
2024
311,500
–
14,040
81,139
406,679
–
2023
311,500
–
14,040
83,461
409,001
–
Part-time members of the Board of Directors
Amr Abdelaziz
2024
30,000
30,100
6,000
4,964
71,064
–
2023
30,000
26,600
6,000
5,178
67,778
–
Sandra Berberat Kecerski
2024
30,000
31,150
6,000
10,964
78,114
–
2023
30,000
25,200
6,000
10,403
71,603
–
Adrian Bruhin
2024
24,000
28,700
6,000
2,408
61,108
–
2023
24,000
29,750
6,000
2,568
62,318
–
Bettina Furrer 4
2024
30,000
23,450
6,000
4,964
64,414
388,000
2023
30,000
20,300
6,000
5,178
61,478
388,000
René Huber
2024
30,000
28,700
6,000
1,925
66,625
4,419,500
2023
30,000
26,250
6,000
1,925
64,175
4,436,000
Henrich Kisker
2024
24,000
32,900
6,000
6,440
69,340
–
2023
24,000
26,250
6,000
1,440
57,690
–
Gregor Kreuzer 6
2024
30,000
24,150
6,000
3,188
63,338
–
Peter Ruff 5
2023
24,000
27,300
6,000
1,440
58,740
–
Walter Schoch
2024
24,000
32,550
6,000
6,440
68,990
–
2023
24,000
25,900
6,000
1,440
57,340
–
Anita Sigg 5
2023
30,000
19,950
6,000
4,921
60,871
3,852,499
Hans-Ueli Vogt 6
2024
24,000
25,900
6,000
3,520
59,420
–
Stefan Wirth 5
2023
30,000
24,500
6,000
4,921
65,421
–
Claudia Zimmermann 6
2024
30,000
29,400
6,000
4,914
70,314
–
Total
2024
1,241,650
287,000
102,120
298,264
1,929,034
6,007,500
2023
1,241,650
252,000
102,120
294,017
1,889,787
9,876,499
Compensation and loans for members of the Board of Directors (in CHF)
1
For the members of the Chairperson’s Committee, CHF 40 is attributable to rounding differences due to monthly payments.
2
Other compensation for members of the Chairperson’s Committee: child, education and family allowances (Agreement on Conditions of Employment
for Bank Staff), loyalty bonuses, medical check-ups, contribution to ZVV / SBB season tickets, farewell gifts for members stepping down.
3
Other compensation for part-time members of the Board of Directors: child, education and family allowances (Agreement on Conditions of
Employment for Bank Staff), farewell gifts for members stepping down.
4
Loans: Heirs of Dr Dieter Furrer: CHF 388,000; Bettina Furrer alone: CHF 0.
5
Peter Ruff, Anita Sigg and Stefan Wirth to 31.12.2023.
6
Gregor Kreuzer, Hans-Ueli Vogt and Claudia Zimmermann from 01.01.2024
99
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Compensation for members
of the Executive Board
To increase transparency in the reporting on the
total compensation, a consistent distinction has been
made since the 2023 Compensation Report between
allocated total compensation and realised total com-
pensation of the Executive Board members active in the
financial year. As is customary in the market, this ensures
a clear allocation of the total compensation for the re-
spective financial year and a clearer presentation of the
performance trend.
The total compensation of the individual mem-
bers of the Executive Board takes account of their per-
formance in their areas of responsibility. The deferred
variable compensation shown corresponds to the long-
term deferred compensation allocated for the financial
year, which will be paid out after the end of the three-
year performance period under certain conditions. As
explained above, base salaries were increased at the
expense of variable compensation as part of the adjust-
ment to the compensation model with effect from the
2024 financial year. At the same time, the proportion of
variable compensation that is deferred for three years
was doubled. These adjustments explain the different
composition of total compensation in the table below
compared to the previous year.
The deferred compensation allocated for the 2021 fi-
nancial year totalling CHF 2,700,000 (previous year:
CHF 2,642,500) for members of the Executive Board
(including former members), for which the three-year
performance cycle ended on 31 December 2024, was re-
alised with a factor of 1.5 (previous year: 1.5). This results
in an amount paid out for deferred compensation re-
lated to the 2022–2024 period totalling CHF 4,050,000
(previous year: CHF 3,963,750). Explanations of the as-
sociated model can be found in the 2021 Annual Report.
The members of the Executive Board and related
parties received no other fees or payments for additional
services rendered to Zürcher Kantonalbank or any of its
subsidiaries during the 2024 financial year.
Total loans and mortgage lending to the Execu-
tive Board members amounted to CHF 8,715,375 (of
which CHF 7,069,000 is on employee terms). No loans
on unusual terms were granted to related parties of the
Executive Board.
Performance-related factors
Year
Base salary
Variable
cash
compensation
Deferred
compensation 2
Total direct
compensation
Pensions
and other
compensation 3
Total
compensation
Highest compensation
(CEO)
2024
1,000,000
802,500
802,500
2,605,000
215,688
2,820,688
2023
700,000
1,462,500
487,500
2,650,000
203,910
2,853,910
Other members
of the Executive Board
2024
5,500,000
3,846,250
3,846,250
13,192,500
1,949,576
15,142,076
2023
3,570,000
8,087,398
2,681,250
14,338,648
1,767,919
16,106,567
Total 4
2024
6,500,000
4,648,750
4,648,750
15,797,500
2,165,264
17,962,764
2023
4,270,000
9,549,898
3,168,750
16,988,648
1,971,829
18,960,477
Compensation of the members
of the Executive Board incl. CEO (in CHF) 1
1
The total annual compensation for the CEO and the Executive Board has been capped
until further notice from the 2023 financial year onwards on the basis of the 2022 financial year.
2
Corresponds to the deferred compensation allocated for the financial year.
3
Other compensation: Expense allowance, child, education and family allowances (Agreement on Conditions of Employment for Bank Staff),
loyalty bonuses, medical check-ups, contribution to ZVV / SBB season tickets, farewell gifts for members stepping down.
4
In both 2023 and 2024, the Executive Board including the CEO consisted of 9 members,
or 8 full-time positions taking into account members joining and leaving pro rata temporis.
100
Zürcher Kantonalbank Annual Report 2024
› Compensation Report
Zürcher Kantonalbank
Financial
— Report
2024
Consolidated financial
statements
Consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
Notes to the consolidated
financial statements
a)
Portrait
b)
Accounting and valuation principles
c)
Explanations on risk management
d)
Explanation on the methods used for identifying
default risks and determining the need for value
adjustments
e)
Explanation of the valuation of collateral
f)
Explanation on the bank’s business policy
regarding the use of derivative financial instruments
and the use of hedge accounting
g)
Explanation on material events
occurring after the balance sheet date
i)
Information on the balance sheet
j)
Information on off-balance-sheet transactions
k)
Information on the income statement
l)
Risk report
m)
Multi-year comparison
Report of the statutory auditor on the consolidated
financial statements
Financial statements
of the parent company
Income statement
Appropriation of profit
Balance sheet
Statement of changes in equity
Notes to the financial statements
of the parent company
i)
Information on the balance sheet
j)
Information on off-balance-sheet transactions
k)
Information on the income statement
Pawnbroking agency
Report of the statutory auditor on the financial statements
103
104
105
106
108
109
109
109
118
118
119
120
121
122
140
142
147
178
180
185
186
187
188
189
190
191
199
201
204
205
Contents
About the figures:
The amounts stated in this report have been rounded off. The total may
therefore vary from the sum of the individual values.
The following rules apply to the tables:
0
(0 or 0.0) Figure that is smaller than half the unit of account used
–
Figure not available or not meaningful
103
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated
financial statements
104
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated income statement
in CHF million
Notes
2024
2023
Change
Change
in %
›Result from interest operations
Interest and discount income
4,339
4,013
326
8.1
Interest and dividend income from financial investments
40
32
8
23.6
Interest expense
– 2,642
– 2,176
– 466
21.4
Gross result from interest operations
33
1,737
1,870
– 132
– 7.1
Changes in value adjustments for default risk and losses
from interest operations
– 57
– 49
– 8
17.0
Subtotal net result from interest operations
1,680
1,821
– 140
– 7.7
›Result from commission business
and services
Commission income from securities trading
and investment activities
1,152
1,022
130
12.8
Commission income from lending activities
77
72
5
7.0
Commission income from other services
148
160
– 12
– 7.6
Commission expense
– 353
– 314
– 39
12.6
Subtotal result from commission business
and services
1,024
940
84
8.9
›Result from trading activities
Result from trading activities
and the fair value option
32
353
415
– 63
– 15.1
›Other result from ordinary activities
Result from the disposal of financial investments
10
7
3
47.3
Income from participations
14
13
1
5.0
– of which, participations valued using the equity method
1
1
0
49.4
– of which, from other non-consolidated participations
13
12
0
2.1
Result from real estate
5
6
– 1
– 10.4
Other ordinary income
9
9
1
7.4
Other ordinary expenses
– 6
– 16
10
– 60.2
Subtotal other result from ordinary activities
32
19
13
71.2
Operating income
3,088
3,194
– 106
– 3.3
›Operating expenses
Personnel expenses
34
– 1,223
– 1,180
– 43
3.7
General and administrative expenses
35
– 508
– 499
– 9
1.9
Subtotal operating expenses
– 1,731
– 1,679
– 52
3.1
Value adjustments on participations and depreciation and
amortisation of tangible fixed assets and intangible assets
– 72
– 75
3
– 3.5
Changes to provisions and other value adjustments and losses
– 8
28
– 37
– 129.7
Operating result
1,277
1,469
– 193
– 13.1
Extraordinary income
36
12
1
11
–
Extraordinary expenses
36
– 0
–
– 0
–
Changes in reserves for general banking risks
36
–
– 225
225
– 100.0
Consolidated profit before taxes
1,289
1,246
43
3.4
Taxes
39
– 168
– 7
– 161
–
Consolidated profit
1,120
1,238
– 118
– 9.5
105
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated balance sheet
in CHF million
Notes
2024
2023
Change
Change
in %
›Assets
Liquid assets
32,733
39,706
– 6,972
– 17.6
Amounts due from banks
3,405
3,401
4
0.1
Amounts due from securities financing transactions
1
25,349
25,740
– 390
– 1.5
Amounts due from clients
2
11,621
11,252
369
3.3
Mortgage loans
2
106,600
100,874
5,725
5.7
Trading portfolio assets
3
13,437
11,880
1,557
13.1
Positive replacement values of derivative financial instruments
4
2,669
968
1,702
175.9
Other financial instruments at fair value
3
–
–
–
–
Financial investments
5
5,206
5,577
– 371
– 6.6
Accrued income and prepaid expenses
513
644
– 131
– 20.4
Non-consolidated participations
6,7
155
154
1
0.7
Tangible fixed assets
8
497
534
– 37
– 6.9
Intangible assets
9
3
3
0
3.3
Other assets
10
405
527
– 122
– 23.2
Total assets
202,594
201,259
1,334
0.7
Total subordinated claims
333
292
41
14.0
– of which, subject to conversion and / or debt waiver
128
96
32
33.4
›Liabilities
Amounts due to banks
39,691
35,404
4,287
12.1
Liabilities from securities financing transactions
1
8,008
14,095
– 6,087
– 43.2
Amounts due in respect of customer deposits
106,980
101,452
5,528
5.4
Trading portfolio liabilities
3
2,862
3,224
– 363
– 11.2
Negative replacement values of derivative financial instruments
4
1,005
2,458
– 1,453
– 59.1
Liabilities from other financial instruments at fair value
3,14
4,421
4,000
421
10.5
Cash bonds
15
260
288
– 27
– 9.5
Certificate of deposits
15
50
632
– 582
– 92.1
Bond issues
15
10,994
10,547
447
4.2
Central mortgage institution loans
15
11,162
11,558
– 396
– 3.4
Accrued expenses and deferred income
1,287
1,371
– 83
– 6.1
Other liabilities
10
834
1,789
– 955
– 53.4
Provisions
16
177
174
3
1.8
Reserves for general banking risks
16
379
379
–
–
Bank’s capital
21
2,425
2,425
–
–
Retained earnings reserve
21
10,952
10,241
711
6.9
Foreign currency translation reserve
21
– 15
– 16
1
– 6.2
Consolidated profit
21
1,120
1,238
– 118
– 9.5
Shareholders’ equity
21
14,862
14,268
594
4.2
Total liabilities
202,594
201,259
1,334
0.7
Total subordinated liabilities
3,346
3,035
311
10.2
– of which, subject to conversion and / or debt waiver
3,346
3,035
311
10.2
›Off-balance-sheet transactions
Contingent liabilities
2,28
4,056
3,772
284
7.5
Irrevocable commitments
2
14,045
14,167
– 122
– 0.9
Obligations to pay up shares and make further contributions
2
349
353
– 5
– 1.3
Credit commitments
2,29
–
–
–
–
106
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated cash flow statement
in CHF million
Cash inflow
2024
Cash
outflow
2024
Cash inflow
2023
Cash outflow
2023
›Cash flow from operating activities
(internal financing)
Result of the period
1,120
–
1,238
–
Change in reserves for general banking risks
–
–
225
–
Value adjustments on participations and depreciation and
amortisation of tangible fixed assets and intangible assets
72
–
75
–
Provisions and other value adjustments
119
116
140
180
Changes in value adjustments for default risks and losses
301
259
280
244
Accrued income and prepaid expenses
131
–
–
187
Accrued expenses and deferred income
–
83
308
–
Other items
–
2
–
1
Previous year’s dividend
–
528
–
491
Balance
756
–
1,163
–
›Cash flow from equity transactions
Share capital / participation capital / cantonal banks’
endowment capital etc.
–
–
–
–
Recognised in reserves
1
–
–
4
Balance
1
–
–
4
›Cash flow from transactions
in respect of non-consolidated
participations, tangible fixed
assets and intangible assets
Non-consolidated participations
0
3
–
6
Real estate
2
10
0
7
Other tangible fixed assets
0
8
0
18
Intangible assets
–
15
0
0
Mortgages on own real estate
–
–
–
–
Balance
–
34
–
31
107
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated cash flow statement (continued)
in CHF million
Cash inflow
2024
Cash out-
flow 2024
Cash inflow
2023
Cash outflow
2023
›Cash flow from banking operations
Medium and long-term business (> 1 year):
Amounts due to banks
1
–
–
6
Amounts due in respect of customer deposits
28
–
–
28
Liabilities from other financial instruments at fair value
421
–
42
–
Cash bonds
51
78
92
0
Bond issues
700
300
1,541
250
Central mortgage institution loans
1,527
1,923
887
1,253
Loans from central issuing institutions
–
–
–
–
Other obligations (other liabilities)
–
955
892
–
Amounts due from banks
–
80
–
101
Amounts due from customers
259
–
–
91
Mortgage loans
–
5,744
–
4,025
Other financial instruments at fair value
–
–
–
–
Financial investments
–
473
317
–
Other accounts receivable (other assets)
122
–
–
127
Balance
–
6,444
–
2,111
Short-term business:
Amounts due to banks
4,286
–
–
3,642
Liabilities from securities financing transactions
–
6,087
3,459
–
Amounts due in respect of customer deposits
5,500
–
–
1,871
Trading portfolio liabilities
–
363
–
412
Negative replacement values of derivative
financial instruments
–
1,453
393
–
Liabilities from other financial instruments at fair value
0
–
5
–
Certificate of deposits
563
1,144
1,236
707
Amounts due from banks
76
–
–
361
Amounts due from securities financing transactions
390
–
2,065
–
Amounts due from customers
–
652
–
642
Trading portfolio assets
–
1,510
–
953
Positive replacement values of derivative
financial instruments
–
1,702
222
–
Other financial instruments at fair value
–
–
–
–
Financial investments
844
–
1,596
–
Balance
–
1,251
386
–
Liquidity:
Liquid assets
6,972
–
596
–
Balance
–
723
–
1,129
Total
757
757
1,163
1,163
108
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Consolidated statement of changes in equity
in CHF million
Bank’s capital
Retained
earnings
reserve
Reserves
for general
banking risks
Consolidated
profit
Foreign
currency
translation
reserve
Total equity
›2023
Total equity as at 31.12.2022
2,425
9,674
154
1,059
– 13
13,299
Effect of any restatement
–
–
–
– 11
–
– 1
Capital increase
–
–
–
–
–
–
Capital decrease
–
–
–
–
–
–
Increase in scope of
capital consolidation
–
–
–
–
–
–
Decrease in scope of
capital consolidation
–
–
–
–
–
–
Other contributions /
other capital paid in
–
–
–
–
–
–
Currency translation differences
–
–
–
–
– 3
– 3
Dividends and other distributions
–
–
–
– 491
–
– 491
Allocation to (transfers from) the
reserves for general banking risks
–
–
225
–
–
225
Allocation to (transfers from)
the retained earnings reserve
–
567
–
– 567
–
–
Consolidated profit
–
–
–
1,238
–
1,238
Total equity as at 31.12.2023
2,425
10,241
379
1,238
– 16
14,268
›2024
Total equity as at 31.12.2023
2,425
10,241
379
1,238
– 16
14,268
Effect of any restatement
–
–
–
01
–
0
Capital increase
–
–
–
–
–
–
Capital decrease
–
–
–
–
–
–
Increase in scope of
capital consolidation
–
–
–
–
–
–
Decrease in scope of
capital consolidation
–
–
–
–
–
–
Other contributions /
other capital paid in
–
–
–
–
–
–
Currency translation differences
–
–
–
–
1
1
Dividends and other distributions
–
–
–
– 528
–
– 528
Allocation to (transfers from) the
reserves for general banking risks
–
–
–
–
–
–
Allocation to (transfers from)
the retained earnings reserve
–
711
–
– 711
–
–
Consolidated profit
–
–
–
1,120
–
1,120
Total equity as at 31.12.2024
2,425
10,952
379
1,120
– 15
14,862
1
Corrections of subsidiaries after the reporting deadline for the consolidated financial statements.
109
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Notes to the con-
solidated financial
statements
a) Portrait
Zürcher Kantonalbank is “Close to you”. Zürcher Kantonalbank has its registered office in Zurich,
was founded in 1870 and is an independent public-law institution of the Canton of Zurich. We
have successfully positioned ourselves as a systemically important universal bank with a regional
base as well as a domestic and international network. With a market penetration of around 50
percent, we occupy the leading position in both the retail and the corporate banking business
in the Canton of Zurich. In addition, we are Switzerland’s second-largest fund provider. Our
public service mandate is to provide financial services to the public and businesses, to contribute
towards efforts to address economic and social issues and to ensure that its actions are environ-
mentally and socially responsible. We uphold our values: responsible, inspiring and passionate.
Broad diversification
Zürcher Kantonalbank’s business model is based on income diversification, in which we di-
versify our income base across different business areas. This reduces our dependence on individual
income components and thus our entrepreneurial risk. We aim to ensure continuity, build on our
existing strengths and at the same time continue to diversify our income in the future through
sustainable growth. Sustainability is an integral aspect of our business model. That means we
incorporate environmental, social and economic criteria into everything we do.
The group includes as parent company the largest cantonal bank and the second-largest
universal bank in Switzerland. The broadly diversified group continues to include Swisscanto
Holding Ltd. with its subsidiaries and sub-subsidiaries (Swisscanto Fund Management Company
Ltd., Swisscanto Pensions Ltd. in liquidation, Swisscanto Private Equity CH I AG, Swisscanto Private
Equity CH II AG and Swisscanto Asset Management International SA), which operate primarily in
the asset management business. The group also owns Zürcher Kantonalbank Finance (Guernsey)
Ltd., a company specialising in the issue of structured investment products; ZKB Securities (UK)
Ltd., which is active in equity brokerage and research; and Zürcher Kantonalbank Österreich
AG1, which renders international private banking services. Complementa AG, which specialises
in investment reporting services, and its subsidiary Complementa GmbH have also been part of
the group since the end of July 2024. The group also includes the representative office Zürcher
Kantonalbank Representações Ltda. as well as a majority stake in Philanthropy Services Ltd.
b) Accounting and valuation principles
Changes in accounting and valuation principles
OECD minimum taxation
In December 2021, the Organisation for Economic Co-operation and Development (OECD)
published global rules to combat base erosion and profit shifting (BEPS). The core of these reg-
ulations is the introduction of a global minimum tax rate of 15 percent. This minimum tax rate
applies to multinational groups with consolidated revenue of at least EUR 750 million. Zürcher
Kantonalbank falls within the scope of this global minimum tax.
1
Please refer to the comments in the section “Material events occurring after the balance sheet date” on page 121.
110
Zürcher Kantonalbank Annual Report 2024
› Financial Report
As of 1 January 2024, Switzerland and other countries in which Zürcher Kantonalbank has
subsidiaries and branches have implemented corresponding regulations for the introduction
of a national supplementary tax (referred to as a qualified domestic minimum top-up tax). With
this supplementary tax, Switzerland and other countries ensure that a minimum taxation of
15 percent is guaranteed domestically.
Although Zürcher Kantonalbank is an independent public-law institution that is exempt
from taxes on its income and capital under both cantonal tax law and the federal law on direct
taxation, it has been subject to OECD minimum taxation since 1 January 2024. Due to the in-
troduction of OECD minimum taxation, Zürcher Kantonalbank now discloses its consolidated
profit before and after tax.
Intangible assets
Addition in the section on goodwill: Fully amortised goodwill is derecognised in the
subsequent period.
Addition in the section on other intangible assets: Fully amortised items are derecognised
in the subsequent period.
General principles
Pursuant to the Listing Rules of the Swiss Exchange, the consolidated financial statements
of Zürcher Kantonalbank are prepared in line with the accounting rules for banks, securities
firms, financial groups and conglomerates (consisting of the FINMA Accounting Ordinance
(RelV-FINMA) and FINMA Circular 2020 / 1).
The consolidated financial statements provide a true and fair view of the financial position,
results of operations and cash flows.
Scope of consolidation
The consolidated financial statements comprise the accounts of the parent company and
the directly and indirectly owned subsidiaries in which the bank has a participation of more
than 50 percent of the voting capital or which it controls in another way. An exception are the
immaterial (from an accounting perspective) subsidiaries Zürcher Kantonalbank Representações
Ltda. and Complementa GmbH, as well as the immaterial majority stake in Philanthropy Services
Ltd. Please refer to the section “Non-consolidated participations” for further information.
The consolidated financial statements are prepared in accordance with the principle of
substance-over-form. The individual accounts of the group companies are included in the con-
solidated financial statements on the basis of uniform accounting standards that are applied
throughout the group.
Method of consolidation
Capital is consolidated in accordance with the purchase method. This involves offsetting
the equity of the group companies at the time of acquisition or at the time of incorporation
against the book value of the parent company’s interest. Please refer to the section on “Intan-
gible assets” for details of the treatment of any goodwill. All the assets and liabilities as well as
expenses and income of the subsidiaries and sub-subsidiaries to be consolidated are included
in the consolidated financial statements. Intragroup transactions and intercompany earnings
are eliminated on consolidation.
Period of consolidation
The period of consolidation corresponds to the calendar year.
Recognition of transactions
All business transactions are recorded and measured in accordance with recognised prin-
ciples on the day they occur. Foreign exchange and precious metal transactions (spot and forward)
concluded but not yet executed are booked in accordance with the settlement-day principle. These
transactions are stated between the trade and settlement dates (value date) at replacement value
under the corresponding item (Positive and negative replacement values of derivative financial
111
Zürcher Kantonalbank Annual Report 2024
› Financial Report
instruments). Securities and options transactions are posted and recognised on the trade date.
Balance sheet fixed-term transactions are recognised as a rule on the settlement date. Own bond
issues, which are posted on the transaction day, are an exception.
Foreign exchange translation
Transactions in foreign currency are translated at the corresponding daily rate. Assets and
liabilities in foreign currency, with the exception of bank notes, are translated at the average
rate as at the balance sheet date. The bid rates on the balance sheet date are applied for foreign
bank notes.
Translation gains and losses are recognised under “Result from trading activities and the
fair value option”. The annual financial statements of Zürcher Kantonalbank Österreich AG are
prepared in euros and the annual financial statements of ZKB Securities (UK) Ltd. in pounds
sterling. The assets and liabilities are translated at the rate on the balance sheet date, and income
and expenses at the respective average exchange rate for the year. The difference between
these exchange rates is reported directly in equity as a currency translation difference effect
under the item “Currency translation reserve”.
2024
2023
Rates on the balance
sheet date
Average annual rates
Rates on the balance sheet date
Average annual rates
EUR
0.9384
0.9518
0.9297
0.9701
GBP
1.1350
1.1267
1.0729
1.1178
USD
0.9063
0.8818
0.8417
0.8962
Offsetting of assets and liabilities as well as expenses and income
There is generally no offsetting of assets and liabilities. Assets and liabilities may, however,
be offset in the following cases:
– Receivables and liabilities if they stem from similar transactions with the same coun-
terparty; have the same due date as the receivable or earlier; are in the same currency
and do not result in a counterparty risk. These conditions must be met cumulatively.
– Positive and negative changes in the book value in the compensation account not
recognised in the income statement.
– For over-the-counter (OTC) transactions, between the positive and negative replacement
values of derivative financial instruments as well as the related cash collateral. For this
purpose, a relevant bilateral netting agreement with the affected counterparties must
be in place. This agreement must be proven to be recognised and legally enforceable.
Assets and liabilities are also offset in the following cases:
– For holdings of own bonds, money market securities and cash bonds are offset against
the corresponding liability items.
– Value adjustments with the corresponding asset item.
– For sub-participations given as lead bank in a loan with the principle.
There is generally no offsetting of expenses and income.
Expenses and income may be offset in the following cases:
– Newly recognised value adjustments for default risk and losses from interest operations
as well as newly recognised provisions and other value adjustments and losses with the
corresponding recoveries and released value adjustments and provisions.
– Gains on trading in securities and transactions valued using the fair value option with
losses from these transactions.
– Positive value adjustments of financial investments valued at the lower of cost or market
with the corresponding negative value adjustments.
– Expenses and income from real estate under the item Result from real estate.
112
Zürcher Kantonalbank Annual Report 2024
› Financial Report
– Results from hedging transactions with the corresponding result from the hedged
transaction.
Liquid assets
Liquid assets mainly comprise sight deposits and central bank digital currency with the
Swiss National Bank. They also include cash holdings in Swiss francs, foreign bank notes, as
well as sight deposits with foreign central banks. These items are recognised at nominal value.
Amounts due from and to banks
Unless stated otherwise in a different item, amounts due from and to banks are stated in
this item. These items are recognised at nominal value.
Appropriate value adjustments are created for default risks on existing positions and dir-
ectly deducted from assets (see also the section “Value adjustments for default risks in respect
of impaired loans / receivables”, and “Value adjustments and provisions for expected losses”).
Claims and liabilities from securities financing transactions
The amounts due from securities financing transactions include reverse repo transactions,
which are treated as advances against collateral in the form of securities. This underscores the
financing nature of the transactions. The securities are transferred in the same way as if they
had been pledged as collateral for a loan. Reimbursement claims in the context of securities
borrowing which arise from cash collateral for the borrowed, non-monetary values are also
included.
Repo transactions in the sense of a collateralised refinancing are entered in the balance
sheet under Liabilities from securities financing transactions. Within the framework of securities
lending, Zürcher Kantonalbank lends non-monetary assets, such as securities, on its own account
and at its own risk (principal status). The repayment obligation for cash deposits received is also
shown here. The bank conducts lending and borrowing transactions within the framework of
trading operations.
Loan transactions involving securities or money market securities that are not collateralised
with cash are not recognised in the balance sheet but reported in the Notes.
Amounts due from clients, mortgage loans and amounts
due in respect of customer deposits
These items are recognised at nominal value. One exception to this are book claims in
precious metals, which are stated at market values.
Leasing arrangements are reported in the balance sheet under Loans, at their nominal
value (or property value) less accumulated amortisation plus instalments due but not paid,
interest on arrears and fees. The element of the leasing instalment representing the interest
for the period in question is included in Interest income. The remaining amount of the leasing
instalment represents the repayment element and reduces the claim amount. Appropriate value
adjustments are created for default risks on existing positions and directly deducted from the
corresponding assets (see also the following section and the section “Value adjustments and
provisions for expected losses”). Default risks on credit limits granted but not utilised on the
balance sheet date are accounted for by means of provisions (see “Provisions”). Explanatory
material on the valuation of collateral for loans can be found in section e) Explanation of the
valuation of collateral.
Value adjustments for default risks in respect of impaired loans / receivables
Loss risks on existing exposures are allowed for by appropriate value adjustments. They are
recognised in the item “Changes in value adjustments for default risk and losses from interest
operations” and deducted directly from the asset affected.
A systematic approach is used to determine the amount of value adjustments. The bank
considers loans / receivables to be impaired if there are indications that the debtor will not be
able to meet future liabilities, but at the latest when the contractually defined amortisation,
interest and commission payments are overdue for 90 days or more. The corresponding interest
113
Zürcher Kantonalbank Annual Report 2024
› Financial Report
and commission are fully covered by provisions. Impaired loans / receivables are valued on an
individual basis.
Individual value adjustments for credit risks are established in accordance with the following
principles:
– Claims are valued individually taking into account the borrower’s creditworthiness and
any collateral at liquidation value.
– As soon as it is no longer assured that the loan repayments can be recovered, a value
adjustment is made for the probable credit default (book value less estimated recover-
able amount).
Exposures rated as impaired are subjected to a creditworthiness test at least twice a year. If
necessary, an appropriate value adjustment is made or existing ones are altered in line with the
current circumstances. Value adjustments for impaired loans are released if there is reasonable
assurance of timely collection of the interest and principal in accordance with the contractual
terms of the claim agreement. In the case of small risks in homogeneous credit portfolios, the
need for a value adjustment is assessed collectively (collective individual value adjustments).
Country-specific risks in connection with loans / receivables are accounted for separately. Among
other factors, country assessments of various rating agencies are taken into consideration.
Value adjustments and provisions for expected losses
For non-impaired loans/receivables and off-balance-sheet transactions, Zürcher Kantonal-
bank recognises value adjustments and provisions for expected losses.
Expected loss (EL) is the anticipated value of future losses from credit defaults. It is the
product of the statistical probability of default (PD), the loss given default (LGD) and the exposure
at default (EAD).
Expressed mathematically, the relationship is as follows: EL = PD x LGD x EAD.
The EL approach is based on the regulatory parameters (the IRB approach) and a residual
maturity approach. Discounting is not applied. For the positions without internal rating infor-
mation, the one-year PD is derived based on the SA-BIS risk weighting. Regulatory PDs are
based on long-term average estimates and extrapolated into lifetime PDs with the assumption
of constant forward PDs.
IRB residual maturities with a one-year floor and five-year cap are used for this purpose. The
regulatory IRB parameters from the capital adequacy calculation are also used to calculate the LGD.
The EAD from the IRB approach is adopted for off-balance-sheet items too. An EAD excluding
accrued interest is used for balance sheet items. EAD and LGD are constant in the (residual) term
calculation.
The EL is determined on the non-impaired loans / receivables of the following balance
sheet and off-balance-sheet items:
– Amounts due from banks
– Amounts due from clients
– Mortgage loans
– Debt securities held to maturity in financial investments
– Contingent liabilities
– Irrevocable commitments
The value adjustments and provisions for expected losses are a safety cushion required by the
regulator. They are only intended to be used in the event of a “crisis” (high loan defaults). A crisis
situation is defined as follows: The changes in value adjustments / provisions for impaired loans / re-
ceivables, incurred losses and default-risk-related changes in value on debt securities held in fi-
nancial investments exceed the one-year expected loss (one-year RelV-EL) calculated on regulatory
parameters for the corresponding period. For half-year periods, 50 percent of the one-year RelV-EL
is compared to the actual values.
If the trigger criterion is met, use may be at the 0 percent, 50 percent or 100 percent level, with
higher use intended for short, severe crises and lower use for longer-lasting ones. In the case of a large
single event without an actual crisis, for example, it may also be possible to dispense with its use.
114
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Replenishment is essentially linear over a period of five years after a crisis. While a crisis is on-
going, no replenishment takes place. The replenishment period is assessed semi-annually and
may be shortened. Ongoing changes resulting from changes in credit volumes, credit ratings
and maturities are always recognised in the period to which they relate (there is no deferral in
the event of a crisis).
Trading portfolio assets and liabilities
Trading positions including money market securities held in the context of the trading
business are recognised at fair value. This is defined as the amount for which an asset could be
exchanged or a liability settled between knowledgeable, willing and independent parties. This
corresponds to the price set on a price-efficient and liquid market or determined on the basis
of a valuation model. Where, as an exception, no fair value is ascertainable, valuation and rec-
ognition are to follow the principle of the lower of cost or market value. Valuation differences
are recognised in the income statement. Interest and dividend income on securities trading
portfolios are credited to the item “Result from trading activities and the fair value option”.
Results from securities lending and borrowing transactions are also recognised under “Result
from trading activities and the fair value option”. The refinancing result for trading portfolio
assets is recognised by compensating the result from trading activities within net interest. With
the exception of the physical precious metal portfolios accounted for under Financial invest-
ments, all other precious metals that are physical and held in account form are accounted for
as Trading portfolio assets and at fair value. Short positions are also accounted for at fair value
and stated under the item “Trading portfolio liabilities”. In the case of trading in combinations
of money market transactions and currency swaps, the aim is to report the interest income or
trading result in the way that most closely captures the economic impact, following the prin-
ciple of substance over form. As a result, the gain or loss on the currency swaps is compensated
under the result from interest operations.
Hence the results from these combined transactions are posted uniformly in the result
from interest operations.
This avoids inflating the income statement and shifting amounts between interest oper-
ations and trading activities with no substantive or economic rationale.
Positive and negative replacement values
of derivative financial instruments
Derivative financial instruments are valued at fair value and, in principle, represent trad-
ing activities. Comments on the business policy parameters for the use of derivative financial
instruments and explanations in connection with the application of hedge accounting can
be found under section f). Replacement values of derivative financial instruments from client
transactions resulting from contracts traded over-the-counter (bank as agent) are, in principle,
accounted for. Exchange-traded contracts from client transactions are accounted for if no daily
margining takes place. Replacement values from trading activities are accounted for under
“Positive replacement values of derivative financial instruments” on the asset side or the item
“Negative replacement values of derivative financial instruments” on the liability side. Hedging
transactions are also measured at fair value. Valuation gains and losses are recognised through
income in the item “Result from trading activities and the fair value option”. An exception are
the derivative financial instruments used to hedge interest rate risk within the scope of asset
and liability management. In this case, value changes are recognised in the compensation ac-
count as “not affecting net income”. The net balance of this compensation account is included
in “Other assets” or “Other liabilities”. If the result from the hedging transaction exceeds the
result from the hedged underlying transaction, the hedge is considered ineffective.
The excess part of the derivative instrument is treated like a trading transaction. Please see
the statements in the section “Offsetting assets and liabilities” with respect to the recognition
of netting agreements for derivative financial instruments.
115
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Other financial instruments at fair value or liabilities
from other financial instruments at fair value
Structured products with own debenture components issued by the bank are valued as
a whole at fair value (no separation of the derivative from the underlying instrument) provided
that the following conditions have been met on a cumulative basis:
– The financial instruments are part of a trade-related strategy and are based on a doc-
umented risk management and investment strategy which ensures correct recording,
measuring and limitation of the various risks.
– There is an economic hedging relationship between the financial instruments on the
asset side and those on the liability side that is largely neutralised in terms of income
by the fair value valuation (avoidance of an accounting mismatch).
– Any impact of a change in own creditworthiness on the fair value is neutralised and
does not affect the income statement where it arises.
The amounts are accounted for under “Liabilities from other financial instruments at fair value”.
Investments by subsidiaries managed in the trading book and connected to self-issued structured
products are stated at market value. These are recognised in “Other financial instruments at
fair value”.
Financial investments
The item includes money market securities which are not held in the context of trading
business. Accounting takes place at nominal value taking a discount provision into account.
Financial investments also include fixed-interest securities as well as shares and other equity
securities.
Fixed-interest securities held to maturity are recognised in accordance with the amortised
cost method and valued at acquisition cost with amortisation of the premium or discount over
the maturity. Realised gains from sales prior to maturity are amortised to maturity. The lower
of cost or market rule is applied in the case of value losses resulting from changes in credit
standing. Fixed-interest securities not intended to be held until maturity are recorded based on
the same rule. The same applies for shares and other equity securities that, irrespective of the
share of voting rights, are also booked under this item provided that they were not acquired
as a permanent investment. Financial investments also include real estate taken over from the
lending business and intended for sale. They are also valued according to the lower of cost or
market principle (acquisition value or prudently estimated lower liquidation value). Unrealised
losses and market-related revaluations up to the original cost of the securities components are
stated under “Other ordinary expenses” or “Other ordinary income”. Realised gains or losses
on the securities components from the sale of financial investments are booked under “Result
from the disposal of financial investments”. Unrealised and realised gains and losses in foreign
currency components are booked under “Results from foreign exchange trading”.
Physical stocks of precious metals held as a financial investment are recognised at fair
value.
Non-consolidated participations
Shares and other equity securities are considered as participations regardless of the share of
voting rights held, provided they have been acquired as a permanent investment. Participations
with voting rights of up to 19.9 percent are valued at lower of cost or market. Participations are
subject to impairment testing at least once a year. Non-consolidated participations with voting
rights of between 20 percent and up to and including 49.9 percent, the immaterial (from an
accounting perspective) subsidiaries Zürcher Kantonalbank Representações Ltda. and Comple-
menta GmbH, as well as the insignificant majority stake in Philanthropy Services Ltd., are stated
in accordance with the equity method in proportion to the equity held on the balance sheet
date. The proportionate net annual result is included in the equity valuation and is recognised
in the consolidated income statement as participation income.
116
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Tangible fixed assets
Bank premises, including installations and fittings in rented properties, are recognised at
cost value plus major investments and are amortised on a straight-line basis over their estimated
useful life. Other properties acquired as a long-term investment are also recognised at the lower
of cost value less straight-line amortisation or lower earnings value. The remaining tangible
fixed assets comprise IT systems and equipment, acquired IT programmes, furniture, vehicles
and machinery. Smaller acquisitions are charged in full to General and administrative expenses
in the year of acquisition.
Larger investments are capitalised and depreciated / amortised in full over their estimated
useful life according to business criteria, or, in the case of acquired IT programmes, generally
over 12 months. Estimated useful life for depreciation purposes (in years):
Land
no depreciation
Bank premises and other properties
– Shell
– Building envelope
max. 80
max. 30
Installations (fitting out, technical installations)
max. 25
Fittings in rented properties
remaining duration of rental agreement 1
IT systems and equipment
4
Acquired IT programmes
max. 1
Furniture / vehicles / machines
max. 5
1
In the case of rental agreements with an option to extend, depreciation is extended to the option date
should the investment be made with the intention of taking up the option.
An impairment test of all tangible fixed assets is undertaken on a regular basis. An asset is sub-
ject to impairment if its book value exceeds the recoverable amount. In the real estate sector,
the recoverable amount is determined by a property valuer. For other tangible fixed assets, the
recoverable amount is equivalent to the value-in-use, which is defined according to business
criteria.
Intangible assets
Goodwill
If the purchase cost of an acquisition is greater than the net assets valued in accord-
ance with standard group-wide accounting principles, the remaining amount is capitalised as
goodwill. This goodwill is amortised over the estimated useful life on a straight-line basis. The
amortisation period is generally five years from the date of acquisition, with a maximum of ten
years in justified instances. If the recoverability of goodwill is no longer ensured on the balance
sheet date (impairment), an impairment is recognised. Fully amortised goodwill is derecognised
in the subsequent period.
Licences
These include purchased software licences. Smaller acquisitions are charged in full to
General and administrative expenses in the year of acquisition. Larger investments are capitalised
and normally fully amortised over 12 months.
Other intangible assets
This item includes acquired non-monetary assets with no physical existence which will
provide the bank with measurable benefits over several years. Amortisation is over the estimated
useful life on a straight-line basis. The amortisation period is generally five years from the date
of acquisition, with a maximum of ten years in justified instances.
Fully amortised items are derecognised in the subsequent period.
117
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Cash bonds, money market securities, bond issues
and central mortgage institution loans
These items are recognised at nominal value. Holdings of own bonds and cash bonds
are offset against the corresponding liability items (see also the section “Offsetting assets and
liabilities”).
Provisions
Loss risks in connection with off-balance-sheet transactions (e. g. credit limits confirmed
but not utilised) as well as other identifiable and foreseeable risks as of the balance sheet date
are accounted for by means of appropriate provisions.
Creation and dissolution take place via the item “Changes to provisions and other value
adjustments and losses”.
Reserves for general banking risks
These items include reserves for general banking risks created and / or released since
2018. Creation and release of such reserves is shown in the income statement under “Changes
in reserves for general banking risks”. Please see the next section “Retained earnings reserve”
for reserves for general banking risks created / released prior to 2018 and solely at the parent
company.
Retained earnings reserve
The retained earnings reserve includes retained earnings, i. e. the funds generated by the
group itself. This item includes reserves for general banking risks created at the parent company
prior to 2018.
Pension schemes
An annual evaluation is performed to assess whether, from the group’s perspective, an
economic benefit or economic obligation arises for the bank or the group as a result of a pen-
sion fund. The determination is based on agreements and annual financial statements of the
pension funds, which, in Switzerland, are prepared according to Swiss GAAP FER 26. Other
calculations showing the financial situation and existing surplus / shortfall for each pension fund
in accordance with actual circumstances are also taken into account.
Zürcher Kantonalbank has no liabilities that extend beyond the regulatory foundations.
Please see Note 13 for additional information.
Contingent liabilities, irrevocable commitments, obligations to pay up
shares and make further contributions, credit commitments and fiduciary
investments
With the exception of commitments under currency swaps facilities and collateral upgrade
transactions, off-balance-sheet transactions are reported at nominal value. Commitments under
currency swap facilities and collateral upgrade transactions are reported in accordance with the
principle of substance over form at 5 percent or 4 percent, respectively, of the nominal value.
Fiduciary crypto currencies held for customers’ accounts are recognised at fair value. Appropriate
provisions are set aside for identifiable risks. Irrevocable commitments also include forward
commitment mortgages.
118
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Taxes
In December 2021, the Organisation for Economic Co-operation and Development (OECD)
published global rules to combat base erosion and profit shifting (BEPS). The core of these reg-
ulations is the introduction of a global minimum tax rate of 15 percent. This minimum tax rate
applies to multinational groups with consolidated revenue of at least EUR 750 million. Zürcher
Kantonalbank falls within the scope of this global minimum tax.
From 1 January 2024, Switzerland and other countries in which Zürcher Kantonalbank has
subsidiaries and branches have implemented corresponding regulations for the introduction of
a national supplementary tax (referred to as a qualified domestic minimum top-up tax). With
this supplementary tax, Switzerland and other countries ensure that a minimum taxation of
15 percent is guaranteed in Switzerland.
Although Zürcher Kantonalbank is an independent public-law institution that is exempt
from taxes on its income and capital under both cantonal tax law and the federal law on direct
taxation, it has been subject to OECD minimum taxation since 1 January 2024.
The subsidiary Zürcher Kantonalbank Finance (Guernsey) Ltd. is a finance company under
Companies Law in Guernsey. In terms of tax law, as of 1 January 2008 the company is deemed to
be resident and is liable to pay tax. As it does not perform any banking activities that are subject
to income tax or any other regulated transactions that are subject to tax, Zürcher Kantonalbank
Finance (Guernsey) Ltd. pays only a fixed “validation fee”, which is included in General and ad-
ministrative expenses. Zürcher Kantonalbank Finance (Guernsey) Ltd. is not liable for any federal,
cantonal or municipal taxes in Switzerland.
The Swisscanto companies are subject to cantonal and federal taxes or the tax regime of
Luxembourg in accordance with their domicile. Zürcher Kantonalbank Österreich AG is subject
to Austrian corporation tax. Its taxable income is taxed at a fixed rate of now 23 percent. The
subsidiary ZKB Securities (UK) Ltd. is subject to UK corporation tax. Its taxable income is taxed
at a fixed rate of 19 percent.
The tax implications of timing differences between the balance sheet values reported in
the consolidated financial statements and the tax values in the individual accounts are reported
as deferred tax claims or liabilities. Deferred tax claims from loss carry-forwards are capitalised
where it is likely that sufficient taxable profits will be generated within the statutory time limits,
against which these differences / corresponding loss carry-forwards may be offset. Changes in
deferred taxes are stated in the income statement via the Taxes item. The property gains tax
charged on the sale of land is separated from the gain on the sale of properties and booked to
the income statement under Taxes.
c) Explanations on risk management
For explanations on risk management in general and the treatment of the interest rate risk,
other market risks and credit risks specifically, please refer to the statements in section I) Risk
report (p. 147 ff).
d) Explanation on the methods used for identifying default
risks and determining the need for value adjustments
The methods used to identify default risks and determine the need for value adjustments are set
out in the section “Value adjustments for default risks in respect of impaired loans / receivables”
and “Value adjustments and provisions for expected losses” in the accounting and valuation
principles. Further information can also be found in section l) Risk report, under the sub-section
“Credit risks” (p. 158 ff).
119
Zürcher Kantonalbank Annual Report 2024
› Financial Report
e) Explanation of the valuation of collateral
The valuation of collateral for loans is specified in comprehensive internal regulations. They
define the methods, procedures and competencies. These rules are regularly reviewed and
aligned with regulatory requirements and market changes. The bank distinguishes between
mortgage claims and readily realisable collateral.
Mortgage claims
Zürcher Kantonalbank uses recognised estimation methods appropriate to the type of
property for the valuation of mortgage claims. The lower of cost or market principle is applied:
accordingly, the lower of estimated value or purchase price is taken as the lending value. This
corresponds to the guidelines for the examination, valuation and processing of mortgage-se-
cured loans issued by the Swiss Bankers Association.
The key valuation factors for a property assessment are:
– Land (macro and micro position, area)
– Building (construction standard, condition, room concept, sustainability)
– Type of use (private, commercial, non-profit)
– Legal regulations
– Situation under property law and contractual agreements (rights, encumbrances)
– Result from rented properties
Model-based valuation processes are used in the first instance in the financing of single family
houses and owner-occupied apartments. In the bank’s internal hedonic model, the estimated
value is determined based on the characteristics of the property to be valued and with the
assistance of the data from similar market transactions.
Depending on the type of property, client and complexity, Zürcher Kantonalbank also
makes use of expert appraisals. The assessment criteria, the valuation procedures and methods
to be used and the required valuation skills of the experts are set out in the bank’s internal regu-
lations. The valuation of mortgage claims is reviewed on a regular basis. The frequency depends
on the type of property. Special developments in the real estate market or macroeconomic
framework conditions may require an adjustment to the valuation intervals or portfolio-specific,
extraordinary revaluations. The maximum permitted loan for the financed property is based
on the class of collateral. This reflects the expected volatility of the value of the property or
the usability of the property. It is determined by the type of property (e. g. single-family house,
commercial property), the type of use (owner-occupied, rented) and other property-specific
criteria (e. g. location, size of property).
Other collateral
Other collateral includes account balances, marketable securities as well as other readily
realisable assets (precious metals, fiduciary investments, claims from life insurance policies, etc.).
To the extent possible, lending values are based on market values. Other collateral is subject to
the deduction of specified margins. These take into account the likelihood of fluctuations in
value and concentration risks within the coverage.
120
Zürcher Kantonalbank Annual Report 2024
› Financial Report
f) Explanation on the bank’s business policy regarding
the use of derivative financial instruments and the use
of hedge accounting
Use of derivative financial instruments
Trading in derivative financial instruments must comply with business policy requirements.
It may be conducted for the purposes of proprietary and client trading as well as for hedging,
and comprises both over-the-counter (OTC) and exchange-traded transactions. Derivative finan-
cial instruments may only be established on underlyings that fulfil the following conditions:
– Prices are set regularly via a stock exchange or an alternative organised exchange or
according to recognised, transparent regulations determined in advance.
– The prices are published.
– The underlying instrument may only be physically delivered for participation rights,
bonds, fund units and precious metals.
Explanations regarding the application of hedge accounting
Hedge accounting is a balance sheet depiction of collateral relationships. It aims to reduce
the volatility of the results figures or equity capital stated and adjust them to the economic risk.
The group applies hedge accounting to limit the interest rate risk in connection with balance
sheet structure management. In this process, there is both a present value and an income
consideration.
Contractually agreed client transactions, financial investments as well as debt finan-
cing in the banking book qualify as underlying transactions to be hedged. For the underlying
instrument, a distinction is made between direct and indirect transactions. For direct trans-
actions, Treasury has a direct influence on the timing and terms of the underlying instrument
(purchase of financial investments, bond issues). Indirect transactions are understood to be all
the transactions concluded by Sales and transferred to Treasury for interest risk management.
For direct transactions, the result of individual transactions is taken into account, whilst for
indirect transactions only the market value of the positions, based on changed market con-
ditions (in particular the yield curve), is included. Appropriate derivative financial instruments
(mainly interest swaps) are used for hedging purposes. For each hedging relationship, a review
is undertaken to determine whether it meets the conditions for the application of hedge ac-
counting (e. g. the hedging transactions must be concluded with an external counterparty).
All hedging transactions are treated as direct transactions. Zürcher Kantonalbank hedges
the underlying transaction by means of a macro hedge. It optimises the total exposure on the
basis of key rate sensitivities while adhering to the risk policy requirements. The result from the
hedging transactions runs counter to the result of the underlying transactions and indicates
the economic risk assumption and cover. The hedge effectiveness is measured every six months
as of the balance sheet date at the end of June and the end of December. It is based on the
effects on the result from the interest exposures of the underlying transactions and the hedging
transactions. Specifically, the result from the underlying transaction is compared to the result
from the hedging transaction as of the balance sheet date. The cumulative absolute amounts
from the monthly result from the underlying and hedging transactions are compared for the
aggregate view of the hedge effectiveness over the six-month horizon. The hedge is regarded
as effective as long as the result from the hedging transactions does not exceed the result from
the underlying transactions. If the result from the hedging transactions, accumulated over six
months, exceeds the result from the underlying transactions, the excessive part of the hedge
is regarded as ineffective.
The transactions responsible for the ineffectiveness of the hedge are then identified in
the hedging portfolio. These transactions are derecognised from the hedging portfolio and
allocated to the trading portfolio. This is carried out until the hedge is effective in the period
under review. No ineffectiveness was recorded in the year under review.
121
Zürcher Kantonalbank Annual Report 2024
› Financial Report
g) Explanation on material events occurring
after the balance sheet date
No significant events affecting the assets, liabilities, financial position and the results of oper-
ations of the group occurred between the reporting date of the financial statements and the
date on which the report was approved.
On 1 July 2024, Zürcher Kantonalbank executed an agreement on the sale of its subsidiary,
Zürcher Kantonalbank Österreich AG, to Liechtensteinische Landesbank (AG). The closing took
place on 9 January 2025 after all conditions were met by both parties and the necessary ap-
provals were granted by the supervisory and competition authorities. On this date, 100 percent
of the share capital and full control of Zürcher Kantonalbank Österreich AG were transferred to
Liechtensteinische Landesbank AG. This sale has no impact on the 2024 consolidated financial
statements of Zürcher Kantonalbank.
122
Zürcher Kantonalbank Annual Report 2024
› Financial Report
i) Information on the balance sheet
1
Breakdown of securities financing transactions
in CHF million
2024
2023
Book value of receivables from cash collateral delivered in connection with securities borrowing and
reverse repurchase transactions
25,349
25,740
Book value of obligations from cash collateral received in connection with securities lending and
repurchase transactions
8,008
14,095
Book value of securities lent in connection with securities lending or delivered as collateral in connection
with securities borrowing as well as securities in own portfolio transferred in connection with repurchase
agreements
4,162
4,262
– of which, with unrestricted right to resell or pledge
4,162
4,262
Fair value of securities received and serving as collateral in connection with securities lending or securities
borrowed in connection with securities borrowing as well as securities received in connection with reverse
repurchase agreements with an unrestricted right to resell or repledge
72,700
62,711
– of which, repledged securities
8,506
6,506
– of which, resold securities
43,746
41,384
2
Overview of collateral for loans / receivables and off-balance-sheet transactions,
as well as impaired loans / receivables
Overview by collateral
Type of collateral
in CHF million
Mortgage
collateral
Other
collateral
Unsecured
Total
›Loans (before netting with value adjustments)
Amounts due from customers
24
2,152
9,720
11,896
Mortgage loans
– Residential property
86,995
7
8
87,011
– Office and business premises
13,466
–
5
13,471
– Commercial and industrial premises
2,648
0
18
2,666
– Other
3,866
–
4
3,870
Total mortgage loans
106,975
7
35
107,017
Total loans 2024 (before netting with value adjustments)
106,999
2,159
9,755
118,913
Total loans 2023 (before netting with value adjustments)
101,254
1,965
9,557
112,776
Total loans 2024 (after netting with value adjustments)
106,616
2,156
9,449
118,221
Total loans 2023 (after netting with value adjustments)
100,891
1,962
9,274
112,126
›Off-balance-sheet
Contingent liabilities
39
276
3,741
4,056
Irrevocable commitments
3,637
263
10,145
14,045
Obligations to pay up shares and make further contributions
–
–
349
349
Credit commitments
–
–
–
–
Total off-balance-sheet transactions 2024
3,676
540
14,234
18,450
Total off-balance-sheet transactions 2023
3,203
508
14,582
18,292
123
Zürcher Kantonalbank Annual Report 2024
› Financial Report
2
Overview of collateral for loans / receivables and off-balance-sheet transactions,
as well as impaired loans / receivables (continued)
Information on impaired loans
in CHF million
Gross debt
amount
Estimated
liquidation
value of
collateral
Net debt
amount
Individual
value
adjust-
ments 1
›Impaired loans
2024
516
222
294
271
2023
487
201
286
249
1
Individual value adjustments of 100 percent of the net debt amount are normally made. Individual value adjustment rates may apply in the case of major positions.
3
Trading portfolios and other financial instruments at fair value
in CHF million
2024
2023
›Assets
Debt securities, money market securities / transactions
6,600
7,104
– of which, listed 1
5,915
6,221
Equity securities
4,208
2,541
Precious metals and commodities
2,628
2,235
Other trading portfolio assets
0
0
Total trading transactions
13,437
11,880
Debt securities
–
–
Structured products
–
–
Other
–
–
Total other financial instruments at fair value
–
–
Total assets
13,437
11,880
– of which, determined using a valuation model
685
997
– of which, securities eligible for repo transactions in accordance with liquidity requirements
2,375
2,719
in CHF million
2024
2023
›Liabilities
Debt securities, money market securities / transactions
2,830
3,213
– of which, listed 1
2,699
3,100
Equity securities
25
5
Precious metals and commodities
5
5
Other trading portfolio liabilities
2
1
Total trading portfolio liabilities
2,862
3,224
Debt securities
–
–
Structured products
4,421
4,000
Other
–
–
Total liabilities from other financial instruments at fair value
4,421
4,000
Total liabilities
7,282
7,224
– of which, determined using a valuation model
4,552
4,227
1
Listed = traded on a recognised exchange.
124
Zürcher Kantonalbank Annual Report 2024
› Financial Report
4
Derivative financial instruments (assets and liabilities)
Trading instruments
Hedging instruments
in CHF million
Positive
replacement
values
Negative
replacement
values
Contract
volume 1
Positive
replacement
values
Negative
replacement
values
Contract
volume 1
›Interest rate instruments
Forward contracts including FRAs
11
11
12,991
–
–
–
Swaps
13,330
13,085
669,099
550
200
21,652
Futures
–
–
25,152
–
–
–
Options (OTC)
68
47
4,650
–
–
–
Options (exchange-traded)
–
–
1
–
–
–
Total
13,410
13,144
711,894
550
200
21,652
›Foreign exchange / precious metals
Forward contracts
4,756
4,250
417,099
–
–
–
Combined interest rate / currency swaps
294
412
1,676
14
88
2,332
Futures
–
–
148
–
–
–
Options (OTC)
45
28
4,755
–
–
–
Options (exchange-traded)
0
0
4
–
–
–
Total
5,095
4,690
423,682
14
88
2,332
›Equity securities / indices
Forward contracts
–
–
–
–
–
–
Swaps
17
18
903
–
–
–
Futures
–
–
2,967
–
–
–
Options (OTC)
65
37
2,107
–
–
–
Options (exchange-traded)
245
253
11,659
–
–
–
Total
328
308
17,636
–
–
–
›Credit derivatives
Credit default swaps
2
3
161
–
–
–
Total return swaps
–
–
–
–
–
–
First-to-default swaps
–
–
–
–
–
–
Other credit derivatives
–
–
–
–
–
–
Total
2
3
161
–
–
–
›Other 2
Forward contracts
–
–
–
–
–
–
Swaps
–
–
–
–
–
–
Futures
–
–
388
–
–
–
Options (OTC)
–
–
–
–
–
–
Options (exchange-traded)
4
4
213
–
–
–
Total
4
4
600
–
–
–
›Total before netting agreements
2024
18,838
18,148
1,153,973
565
288
23,984
– of which, determined using a valuation
model
18,838
18,148
–
565
288
–
2023
20,963
22,000
1,070,905
737
304
26,248
– of which, determined using a valuation
model
20,963
22,000
–
737
304
–
1
The contract volume shows the amount of underlying on which a derivative is based or the notional amount underlying the derivative in accordance with the requirements of
FINMA Circular 2020 / 1, irrespective of whether the derivative is traded long or short. The contract volume is determined differently depending on the type of contract and
does not permit any direct conclusions to be drawn about the risk exposure.
2
Includes commodities and hybrid derivatives.
125
Zürcher Kantonalbank Annual Report 2024
› Financial Report
4
Derivative financial instruments (assets and liabilities) (continued)
in CHF million
Positive
replacement values
(cumulative)
Negative
replacement values
(cumulative)
›Total after netting agreements 3
2024
2,669
1,005
2023
968
2,458
›Breakdown by counterparty
Positive replacement values
(after netting agreements)
Central
clearing houses
Banks and
securities firms
Other
customers
2024
154
264
2,251
3
For over-the-counter (OTC) transactions, the positive and negative replacement values of derivative financial instruments as well as the related cash collateral are offset
(netting). For this purpose, a relevant bilateral agreement with the affected counterparties must be in place. This agreement must be proven to be recognised and legally
enforceable.
5
Financial investments
in CHF million
Book value
Fair value
2024
2023
2024
2023
Debt securities
4,719
5,271
4,797
5,166
– of which, intended to be held to maturity
4,719
5,271
4,797
5,166
– of which, not intended to be held to maturity (available for sale)
–
–
–
–
Equity securities
134
112
261
233
– of which, qualified participations 1
5
8
8
14
Precious metals
349
187
349
187
Real estate
4
7
4
7
Cryptocurrencies
–
–
–
–
Total financial investments
5,206
5,577
5,411
5,593
– of which, securities eligible for repo transactions in accordance with
liquidity requirements
4,668
4,729
4,746
4,628
1
At least 10 percent of the capital or voting rights.
in CHF million
›Counterparties by
rating
Moody’s
Aaa - Aa3
A1 - A3
Baa1 - Baa3
Ba1 - Ba3
Lower
than Ba3
Unrated
Standard & Poor’s, Fitch
AAA - AA-
A+ - A-
BBB+ - BBB-
BB+ - B-
Below B–
Unrated
Debt securities: Book values
2024
4,597
51
–
–
–
71
All debt instruments without a rating fulfil the conditions of high-quality liquid assets (HQLA) according to the Liquidity Ordinance (LiqV).
If two ratings exist with different risk weightings, the rating with the lower risk weighting is used.
If more than two ratings exist with different risk weightings, those ratings which correspond to the two lowest risk weightings are taken into consideration.
The higher of the two risk weightings is used. Top priority is given to the issue rating and second priority to the issuer rating.
126
Zürcher Kantonalbank Annual Report 2024
› Financial Report
6
Presentation of non-consolidated participations
in CHF million
Cost value
Accumulated
value
adjustments /
changes in
book value
(equity
valuation)
Book value
end of
2023
Reclassi-
fications
Addi-
tions
Disposals
(incl. any
FC diffe-
rences)
Value
adjust-
ments
Changes in
book value for
participations
using the
equity method /
depreciation
reversals
Book
value
end of
2024
Market
value
end of
2024
Participations valued using
the equity method
– with market value
–
–
–
–
–
–
–
–
–
–
– without market value
48
– 28
20
–
3
–
– 3
0
21
–
Other participations
–
–
–
–
–
–
–
–
–
–
– with market value
–
–
–
–
–
–
–
–
–
–
– without market value
144
– 10
133
–
–
– 0
– 1
2
134
–
Total participations
192
– 38
154
–
3
– 0
– 4
2
155
–
1
No material impairment losses or reversals of impairment to be recorded.
7
Disclosures on companies in which the bank holds a permanent direct
or indirect significant participation
Currency
bank's
capital
Bank's
capital
in CHF
million
Zürcher
Kantonal-
bank
share
capital
(in %)
Zürcher
Kantonal-
bank
voting
rights
Held
directly
Held
indirectly
›Fully consolidated participations
Complementa AG
St. Gallen
Financial services
CHF
1
100.0
100.0
n
Swisscanto Asset Management
International SA
Luxem-
bourg
Fund management
CHF
0
100.0
100.0
n
Swisscanto Fund Management
Company Ltd. 1
Zurich
Fund management
CHF
5
100.0
100.0
n
Swisscanto Holding Ltd. 2
Zurich
Participations
CHF
24
100.0
100.0
n
Swisscanto Private Equity CHF I Ltd.
Zurich
Financial services
CHF
0
100.0
100.0
n
Swisscanto Private Equity CHF II Ltd.
Zurich
Financial services
CHF
0
100.0
100.0
n
Swisscanto Pensions Ltd. in liquidation
Zurich
Financial services
CHF
1
100.0
100.0
n
Zürcher Kantonalbank Finance
(Guernsey) Ltd.
Guernsey
Financial services
CHF
1
100.0
100.0
n
Zürcher Kantonalbank Österreich AG 3
Salzburg
Financial services
EUR
6
100.0
100.0
n
ZKB Securities (UK) Ltd.
London
Financial services
GBP
15
100.0
100.0
n
›Reported under non-consolidated participations: 4
Participations values using the equity method.
Technopark Real Estate Ltd.
Zurich
Project planning,
construction,
maintenance
CHF
40
33.3
33.3
n
From other non-consolidated participations
Pfandbriefzentrale der schweizer-
ischen Kantonalbanken Ltd.
Zurich
Pfandbrief institution
CHF
2,225 5
17.8
17.8
n
Viseca Payment Services Ltd.
Zurich
Participations
CHF
25
14.7
14.7
n
1
Swisscanto Fund Management Ltd holds 100 percent of the shares of Swisscanto Private Equity CH I Ltd and of Swisscanto Private Equity CH II Ltd.
2
Swisscanto Holding Ltd. holds 100 percent of the shares in Swisscanto Fund Management Company Ltd., Swisscanto Pensions Ltd. (in Liquidation) and
Swisscanto Asset Management International S. A.
3
Please refer to the comments in the section “Material events occurring after the balance sheet date” on page 121.
4
All non-consolidated participations whose share of capital is more than 10 percent are shown. In addition, either the share of the participations in the bank’s capital must be
more than CHF 2 million or the book value must be more than CHF 15 million.
5
Of which CHF 445 million have been paid in.
127
Zürcher Kantonalbank Annual Report 2024
› Financial Report
7
Disclosures on companies in which the bank holds a permanent direct or
indirect significant participation (continued)
Currency
bank's
capital
Bank's
capital
in CHF
million
Zürcher
Kantonal-
bank
share
capital
(in %)
Zürcher
Kantonal-
bank
voting
rights
Held
directly
Held
indirectly
›Subsidiaries not fully consolidated
Complementa LLC 6
München
Financial services
EUR
0
100.0
100.0
n
Philanthropy Services Ltd. 7
Basel
Services
CHF
1
85.8
85.5
n
Zürcher Kantonalbank
Representações Ltda. 8
São
Paulo
Representative office
BRL
0
100.0
100.0
n
6
Indirect purchase via Complementa AG in 2024.
7
Total assets in CHF thousand: (2023: 2,517; 2022: 4,391), loss for the period in CHF thousand: (2023: 1,914; 2022: 2,788).
8
Total assets in CHF thousand (2023; 282; 2022: 302), result for the period in CHF thousand (2023: 0; 2022: 41).
8
Presentation of tangible fixed assets
in CHF million
Cost value
Accumu-
lated
depreciation
Book value
at end 2023
Change to
scope of
consoli-
dation
Additions
Disposals
Deprecia-
tion
Reversals
Book
value
at end
2024
Bank buildings
1,311
– 807
504
0
10
– 2
– 40
–
472
Other real estate
2
– 2
1
–
0
–
– 0
–
1
Proprietary or separately
acquired software
0
– 0
–
0
–
–
– 0
–
–
Other tangible fixed assets
176
– 147
29
0
8
– 0
– 13
–
24
Tangible assets acquired under
finance leases
–
–
–
–
–
–
–
–
–
– of which, bank buildings
–
–
–
–
–
–
–
–
–
– of which, other real
estate
–
–
–
–
–
–
–
–
–
– of which, other tangible
fixed assets
–
–
–
–
–
–
–
–
–
Total tangible fixed assets
1,490
– 956
534
0
18
– 2
– 53
–
497
The insurance value of the real estate within tangible fixed assets amounted to CHF 1,307 million.
The insurance value of the other tangible fixed assets amounted to CHF 401 million.
Operating leases
in CHF million
2024
2023
›Leasing obligations not recognised in the balance
sheet
Due within 12 months
0
0
Due between 12 months and 5 years
0
0
Due after more than 5 years
–
–
Total of leasing obligations not recognised in the balance sheet
0
0
– of which, cancellable within 1 year
–
–
128
Zürcher Kantonalbank Annual Report 2024
› Financial Report
9
Presentation of intangible assets
in CHF million
Cost value
Accumu-
lated
amortisa-
tion
Book value
end of 2023
Changes
to scope of
consoli-
dation
Reclassifica-
tions
Additions
Disposals
Amortisa-
tion
Reversals
Book
value end
of 2024
Goodwill
300
– 300
–
–
–
15 1
–
– 12 1
–
3
Patents
–
–
–
–
–
–
–
–
–
–
Licences
48
– 48
0
–
–
0
0
– 1
–
0
Other intangible
assets ²
15
– 13
2
–
–
–
–
– 2
–
–
Total intangible
assets
363
– 360
3
–
–
15
0
– 15
–
3
1
In connection with the acquisition of Complementa AG; includes amortisation of around CHF 2 million.
2
In connection with the completed takeover of the investment management and marketing of GAM precious metals and money market funds.
10
Other assets and liabilities
in CHF million
Other assets
Other liabilities
2024
2023
2024
2023
Compensation account
0
–
159
361
Deferred income taxes recognised as assets
2
4
–
–
Amount recognised as assets in respect of employer
contribution reserves
–
–
–
–
Amount recognised as assets relating to other assets
from pension schemes
–
–
–
–
Negative goodwill
–
–
–
–
Settlement accounts
371
494
550
1,310
Indirect taxes
25
22
113
107
Other
6
6
13
11
Total
405
527
834
1,789
11
Assets pledged or assigned to secure own commitments,
and assets under reservation of ownership
in CHF million
2024
2023
Book value
Effective
commitment
Book value
Effective
commitment
›Pledged / assigned assets
Liquid assets
245
245
236
236
Amounts due from banks
2,931
2,913
2,149
2,118
Amounts due from customers
1,114
1,044
2,252
2,238
Mortgage loans
13,715
11,162
14,393
11,558
Trading portfolio assets
597
597
593
593
Financial investments
380
332
123
97
Total pledged / assigned assets
18,984
16,294
19,746
16,840
No assets are subject to reservation of ownership.
Note 1 shows instruments serving as collateral for which a right of resale or pledging has been granted in connection with securities financing.
129
Zürcher Kantonalbank Annual Report 2024
› Financial Report
12
Liabilities relating to own pension schemes and number and nature
of equity instruments of the bank held by own pension schemes
in CHF million
2024
2023
Change
›Liabilities to own pension schemes
from balance-sheet transactions
Amounts due in respect of customer deposits
53
47
7
Cash bonds
0
0
0
Negative replacement values of derivative financial instruments 1
0
63
– 63
Accrued expenses and deferred income
0
0
0
Other liabilities
0
0
0
Total
53
110
– 56
Own pension schemes do not hold any of the bank’s equity instruments.
1
After taking netting agreement into account.
13
Information on pension schemes
The Zürcher Kantonalbank pension fund is a public-law institution and is a separate legal
entity. The purpose of the pension fund is to insure the bank’s employees against the economic
consequences of age, death and disability. The pension fund’s pension plan comprises three
different pension vehicles. The annuity plan insures the basic salary (annual salary) according
to the combined defined benefit / defined contribution principle 1. The capital plan insures any
paid variable compensation (bonus) subject to AHV. The capital plan is also based on a com-
bined defined benefit / defined contribution principle 1. The third vehicle – the supplementary
account – enables insured individuals to pre-finance the reduction in benefits on early retirement
between the ages of 58 and 65. The premiums required for these plans constitute a compo-
nent of personnel expenses. Contributions to the annuity and capital plans are funded jointly
by the insured individual and the bank. The supplementary account is funded exclusively by
the insured individuals. An additional plan is operated in the form of a separate trust, the
Marienburg Foundation of Zürcher Kantonalbank, for the senior management of affiliated
employers. Structured on a defined contribution basis, this solution insures the element of the
base salary in excess of a specific minimum amount. The Marienburg Foundation of Zürcher
Kantonalbank is funded jointly by the insured individuals and the bank. However, employer
contributions for salary components insured in the Marienburg Foundation are lower than
those in the pension fund after the age of 45. Also, unlike the pension fund, the Marienburg
Foundation does not pay old-age pensions, only retirement capital. This means that investment
risk and longevity risk are borne by the retirees. The purpose of the Marienburg Foundation is
also to protect insured individuals against the consequences of death and disability.
The following employers are affiliated to Zürcher Kantonalbank’s pension fund:
– Zürcher Kantonalbank’s Grüningen Botanical Garden Trust
– Zürcher Kantonalbank pension fund
– Zürcher Kantonalbank’s SanArena Trust
– Swisscanto Fund Management Company Ltd.
– Zürcher Kantonalbank
1
Retirement benefits are based on the individually accumulated savings assets, while death and disability benefits are calculated as
a percentage of the insured salary. Disability pensions are paid for life, and the pension is recalculated when the insured individual reaches
normal retirement age.
130
Zürcher Kantonalbank Annual Report 2024
› Financial Report
in %
Coverage ratio as at
31.12.2024
(not yet audited)
Coverage ratio as at
31.12.2023
(audited)
Zürcher Kantonalbank pension fund
116
110
Marienburg Foundation of Zürcher Kantonalbank
(solution for senior management)
109
105
Coverage ratio pursuant to Article 44 BVV2
Complementa AG has insured its employees against the risks of old age, death and disability
with a collective foundation under a defined contribution scheme.
Occupational pension provision for the employees of the Austrian subsidiary is outsourced
to a collective scheme governed by Austrian law. The pension plan is structured on a defined
contribution basis.
Swisscanto Asset Management International S. A. in Luxembourg has set up a pension
plan for all employees. The plan, including the investment of employee assets, is managed by
an insurance company. The savings contributions are fully financed by the employer. The risks
are comprehensively covered by the insurance company. The office in Germany is a member of
the pension fund for the banking industry. The employees can save tax free contributions for
retirement, with the employer paying part of the contributions. Contributions are paid into a
banking sector pension fund for the employees of the branch in Italy.
The pension plans for the employees of ZKB Securities (UK) Limited and Zürcher
Kantonalbank Finance (Guernsey) Ltd. are defined contribution schemes and are administered
by independent retirement benefit institutions.
There is no possibility of a shortfall or surplus for pension solutions in other countries as
the investment risk is fully borne by the employee.
13
Information on pension schemes (continued)
a)
Employer contribution reserves (ECR)
Neither Zürcher Kantonalbank nor its subsidiaries have employer contribution reserves.
b)
Economic benefit / obligations and the pension expenses
in CHF million
Over- /
underfunding
Economic interest
of the bank
Change in
economic
interest versus
previous year
Contribu-
tions paid
Pension expenses
in personnel expenses
End
2024
2024
2023
2024
2024
2024
2023
Employer-sponsored funds / em-
ployer-sponsored pension schemes
–
–
–
–
–
–
–
Pension plans without
overfunding / underfunding
–
–
–
–
3
3
114
Pension plans with overfunding
4
–
–
–
117
117
–
Pension plans with underfunding
–
–
–
–
–
–
–
Pension schemes without
own assets
–
–
–
–
–
–
–
Total
4
–
–
–
120
120
114
131
Zürcher Kantonalbank Annual Report 2024
› Financial Report
14
Issued structured products
Book Value
Total
Valued as a whole
Valued separately
in CHF million
Booked in
trading
portfolio
Booked in
other
financial
instruments
at fair value
Value of
the host
instrument
Value of
the
derivative
Underlying risk of the embedded derivative
Interest rate instruments
With own debenture component
–
80
–
–
80
Without oDC
–
–
–
–
–
Equity securities
With own debenture component
–
4,170
–
–
4,170
Without oDC
–
–
–
–
–
Foreign currencies
With own debenture component
–
167
–
–
167
Without oDC
–
–
–
–
–
Commodities / precious metals
With own debenture component
–
2
–
–
2
Without oDC
–
–
–
–
–
Loans
With own debenture component
–
2
–
–
2
Without oDC
–
–
–
–
–
Real estate
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Hybrid instruments
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Total 2024
–
4,421
–
–
4,421
Total 2023
–
4,000
–
–
4,000
132
Zürcher Kantonalbank Annual Report 2024
› Financial Report
15
Presentation of bonds outstanding and mandatory convertible bonds
(incl. cash bonds, certificate of deposits and central mortgage institution loans)
Outstanding amount
in CHF million
Weighted average
interest rate
Maturities
›Cash bonds
31.12.2024
260
0.80
2025–2034
31.12.2023
288
0.74
2024–2033
Maturity structure
in CHF million
2025
2026
2027
2028
2029
after 2029
Total
Cash bonds
101
53
24
24
16
43
260
Outstanding amount
in CHF million
Weighted average
interest rate
Maturities
›Certificate of deposits
31.12.2024
50
0.80
2025
31.12.2023
632
1.71
2024
Maturity structure
in CHF million
2025
2026
2027
2028
2029
after 2029
Total
Certificate of deposits
50
–
–
–
–
–
50
Outstanding amount
in CHF million
Weighted average
interest rate
Maturities
›Bonds and mandatory
convertible bonds
31.12.2024 (Issuer: Zürcher Kantonalbank)
10,994
– of which, non-subordinated
7,648
0.59
2025–2044
– of which, subordinated without PONV
clause 1
1,809
3.44
2027–2033
– of which, subordinated with PONV
clause 1
1,537
2.74
2028–perpetual
31.12.2023 (Issuer: Zürcher Kantonalbank)
10,547
– of which, non-subordinated
7,512
0.59
2024–2044
– of which, subordinated without PONV clause 1
1,506
3.70
2027–2030
– of which, subordinated with PONV clause 1
1,529
2.74
2028–perpetual
Maturity structure
in CHF million
2025
2026
2027
2028
2029
after 2029
Total
Bond issues
1,047
1,505
1,299
1,398
869
4,877
10,994
Outstanding amount
in CHF million
Weighted average
interest rate
Maturities
›Central mortgage institution loans
31.12.2024
11,162
0.76
2025–2040
31.12.2023
11,558
0.61
2024–2039
Maturity structure
in CHF million
2025
2026
2027
2028
2029
after 2029
Total
Central mortgage institution loans 2
1,304
780
1,143
1,742
1,561
4,632
11,162
1
Point Of Non-Viability (PONV).
2
Pfandbriefzentrale der schweizerischen Kantonalbanken AG loans.
133
Zürcher Kantonalbank Annual Report 2024
› Financial Report
16
Presentation of value adjustments and provisions, reserves for
general banking risks, and changes therein during the current year
in CHF million
Balance
at end of
2023
Changes to
scope of
consolida-
tion
Use in
conformity
with
designated
purpose
and reversals
Reclassifi-
cations
Currency
differences
Past due
interest,
recoveries
New
creations
charged
to income
Releases to
income
statement
Balance
at end of
2024
Provisions for
deferred taxes
0
–
–
–
–
–
–
– 0
–
Provisions for pension
benefit obligations
–
–
–
–
–
–
–
–
–
Provisions for default risks
146
–
– 2
–
0
–
115
– 111
148
– of which,
provisions for
expected loss
54
–
–
–
0
–
67
– 64
58
Provisions for other
business risks 1
13
–
– 1
–
– 0
–
1
– 0
14
Provisions for restructuring
–
–
–
–
–
–
–
–
–
Other provisions 2
14
0
– 0
–
0
–
2
– 1
15
Total provisions
174
0
– 4
–
– 0
–
118
– 112
177
Reserves for general
banking risks
379
–
–
–
–
–
–
–
379
Value adjustments for
default and country risks
676
0
– 10
–
0
2
300
– 249
718
– of which, value
adjustments
for default risks
in respect of
impaired loans /
receivables 3
249
–
– 10
–
–
2
89
– 59
271
– of which, value
adjustments
for expected loss
427
0
–
–
0
–
210
– 190
447
1
Provisions for other business risks relate to provisions for settlement risks, for example, which cover identifiable risks as at the balance sheet date.
2
The other provisions include, among other things, provisions for litigation and provisions for employees’ holiday credits.
3
Default risks consist primarily of counterparty risks, for which value adjustments of 100 percent of the net debt are generally set aside. Individual value adjustments rates
may apply in the case of major positions.
Recoveries from amounts due derecognised in previous periods are reported directly in Changes in value adjustments for default risk and losses from interest operations
(2024: CHF 3 million / 2023: CHF 1 million).
For more details on the management of credit risks, operational risks and legal and compliance risks, please refer to section I) Risk report.
17
Presentation of the bank’s capital
The disclosure pursuant to the accounting rules for banks is made only by
the parent company (page 197).
18
Number and value of equity securities or options
on equity securities held by all executives and directors and
by employees, and disclosures on any employee participation schemes
Neither Zürcher Kantonalbank nor its subsidiaries have employee participation schemes.
134
Zürcher Kantonalbank Annual Report 2024
› Financial Report
19
Amounts due from / to related parties
in CHF million
Due from
Due to
2024
2023
2024
2023
Holders of qualified participations
21
15
734
463
Group companies
–
–
1
2
Linked companies
323
330
604
864
Transactions with members of governing bodies
12
16
31
30
Other related parties
–
–
–
–
Affiliated companies are public-law institutions of the respective canton or public-private enterprises in which the canton holds qualified participations.
On- and off-balance-sheet transactions with related parties are conducted at usual market conditions, with the exception of loans to members of governing bodies.
Loans to governing bodies are granted on employee terms in some cases.
This primarily involved the usual balance sheet banking business, i. e. it was mainly amounts due from and due to customers.
The totals above also include securities items and claims and liabilities from transactions in derivatives (positive and negative replacement values). The off-balance-sheet transactions
with related parties in the amount of CHF 906 million (2023: CHF 1,436 million) primarily include irrevocable loan commitments and other contingent liabilities.
20
Disclosure of holders of significant participations
The disclosure pursuant to the accounting rules for banks is only made by the parent company (page 198).
21
Disclosure of own shares and composition of equity capital
in CHF million
2024
2023
Reserves for general banking risks
379
379
Bank’s capital
2,425
2,425
Retained earnings reserve
10,952
10,241
Foreign currency translation reserve
– 15
– 16
Consolidated profit
1,120
1,238
Total shareholders’ equity
14,862
14,268
The bank does not hold any of its own shares.
22
Disclosures in accordance with the Ordinance against Excessive Compensation with
respect to Listed Stock Corporations and Article 663c para. 3 CO for banks whose equity
securities are listed
The disclosure pursuant to the accounting rules for banks is only made by the parent company (page 199).
135
Zürcher Kantonalbank Annual Report 2024
› Financial Report
23
Maturity structure of financial instruments
Due
in CHF million
At sight
Cancel-
lable
within
3 months
within 3 to
12 months
after 1
to 5 years
after
5 years
No
maturity
Total
›Assets / financial instruments
Liquid assets
32,489
245
–
–
–
–
–
32,733
Amounts due from banks
626
0
928
1,500
54
297
–
3,405
Amounts due from securities financing transactions
9
11,776
12,822
743
–
–
–
25,349
Amounts due from customers
117
1,767
4,824
2,111
2,031
772
–
11,621
Mortgage loans
102
22,098
6,791
9,449
43,934
24,226
–
106,600
Trading portfolio assets
13,437
–
–
–
–
–
–
13,437
Positive replacement values
of derivative financial instruments
2,669
–
–
–
–
–
–
2,669
Other financial instruments at fair value
–
–
–
–
–
–
–
–
Financial investments
483
–
20
435
2,355
1,909
4
5,206
Total assets / financial instruments 2024
49,931
35,885
25,385
14,237
48,374
27,204
4
201,021
Total assets / financial instruments 2023
53,919
34,508
26,732
11,558
45,778
26,895
7
199,398
›Debt capital / financial instruments
Amounts due to banks
5,054
175
28,665
5,103
694
–
–
39,691
Liabilities from securities financing transactions
9
3,581
4,418
–
–
–
–
8,008
Amounts due in respect of customer deposits
47,909
39,207
15,511
2,971
579
804
–
106,980
Trading portfolio liabilities
2,862
–
–
–
–
–
–
2,862
Negative replacement values of derivative
financial instruments
1,005
–
–
–
–
–
–
1,005
Liabilities from other financial instruments
at fair value
4,421
–
–
–
–
–
–
4,421
Cash bonds
–
–
20
80
117
43
–
260
Certificate of deposits
–
–
50
–
–
–
–
50
Bond issues
–
3,346
250
797
3,239
3,362
–
10,994
Central mortgage institution loans
–
–
152
1,152
5,226
4,632
–
11,162
Total debt capital / financial instruments
2024
61,260
46,309
49,066
10,103
9,855
8,841
–
185,434
Total debt capital / financial instruments
2023
56,249
43,904
55,462
8,938
9,979
9,126
–
183,658
136
Zürcher Kantonalbank Annual Report 2024
› Financial Report
24
Assets, liabilities and off-balance-sheet positions by domestic
and foreign origin in accordance with the domicile principle
2024
2023
in CHF million
Domestic
Foreign
Domestic
Foreign
›Assets
Liquid assets
32,410
323
39,524
182
Amounts due from banks
270
3,135
435
2,966
Amounts due from securities financing transactions
12,265
13,084
17,683
8,057
Amounts due from clients
9,756
1,866
9,098
2,154
Mortgage loans
106,599
0
100,874
0
Trading portfolio assets
7,258
6,178
6,587
5,294
Positive replacement values of derivative
financial instruments
2,249
421
637
331
Other financial instruments at fair value
–
–
–
–
Financial investments
4,644
563
4,588
989
Accrued income and prepaid expenses
484
30
620
25
Participations
154
1
153
1
Tangible fixed assets
495
3
531
3
Intangible assets
3
0
2
0
Other assets
168
236
379
148
Total assets
176,755
25,839
181,112
20,147
›Liabilities
Amounts due to banks
3,319
36,372
3,336
32,068
Liabilities from securities financing transactions
27
7,981
245
13,849
Amounts due in respect of customer deposits
100,512
6,468
94,213
7,239
Trading portfolio liabilities
1,118
1,744
1,234
1,990
Negative replacement values of derivative
financial instruments
545
460
2,017
441
Liabilities from other financial instruments at fair value
2,550
1,871
2,288
1,712
Cash bonds
260
–
288
–
Certificate of deposits
50
–
632
–
Bond issues
10,994
–
10,547
–
Central mortgage institution loans
11,162
–
11,558
–
Accrued expenses and deferred income
1,258
29
1,347
24
Other liabilities
718
116
1,535
255
Provisions
175
3
172
2
Reserves for general banking risks
379
–
379
–
Bank’s capital
2,425
–
2,425
–
Retained earnings reserve
10,803
150
10,093
149
Foreign currency translation reserve
– 15
–
– 16
–
Consolidated profit
1,102
18
1,224
15
Total liabilities
147,383
55,211
143,516
57,743
›Off-balance-sheet transactions
Contingent liabilities
2,243
1,813
1,946
1,826
Irrevocable commitments
12,595
1,450
12,868
1,300
Obligations to pay up shares and make further contributions
349
–
353
–
Credit commitments
–
–
–
–
137
Zürcher Kantonalbank Annual Report 2024
› Financial Report
25A
Assets by country or group of countries
2024
2023
in CHF million
Share as %
in CHF million
Share as %
Switzerland
176,755
87.2
181,112
90.0
Rest of Europe
15,142
7.5
11,928
5.9
– of which, Germany
3,280
1.6
1,561
0.8
– of which, France
1,132
0.6
1,079
0.5
– of which, United Kingdom
4,834
2.4
4,978
2.5
– of which, Guernsey
10
0.0
8
0.0
Americas
8,675
4.3
6,732
3.3
– of which, USA
6,466
3.2
4,798
2.4
Asia and Oceania
1,955
1.0
1,448
0.7
Africa
67
0.0
39
0.0
Total assets
202,594
100.0
201,259
100.0
25B
Liabilities by country or group of countries
2024
2023
in CHF million
Share as %
in CHF million
Share as %
Switzerland
147,383
72.7
143,516
71.3
Rest of Europe
27,650
13.6
33,321
16.6
– of which, Germany
4,025
2.0
3,958
2.0
– of which, France
3,779
1.9
9,743
4.8
– of which, United Kingdom
5,520
2.7
5,110
2.5
– of which, Guernsey
2,187
1.1
2,227
1.1
Americas
18,016
8.9
15,502
7.7
– of which, USA
7,381
3.6
7,366
3.7
Asia and Oceania
8,194
4.0
6,838
3.4
Africa
1,350
0.7
2,081
1.0
Total liabilities
202,594
100.0
201,259
100.0
25C
Contingent liabilities, irrevocable commitments, obligations
to pay up shares and make further contributions by country or
group of countries
2024
2023
in CHF million
Share as %
in CHF million
Share as %
Switzerland
15,187
82.3
15,167
82.9
Rest of Europe
2,322
12.6
2,119
11.6
– of which, Germany
196
1.1
181
1.0
– of which, France
247
1.3
249
1.4
– of which, United Kingdom
148
0.8
156
0.9
– of which, Guernsey
36
0.2
87
0.5
Americas
109
0.6
164
0.9
– of which, USA
84
0.5
80
0.4
Asia and Oceania
810
4.4
801
4.4
Africa
22
0.1
41
0.2
Total
18,450
100.0
18,292
100.0
138
Zürcher Kantonalbank Annual Report 2024
› Financial Report
26
Breakdown of total assets by credit rating of country groups
(risk domicile view)
2024
Net foreign exposure
2023
Net foreign exposure
Rating system
ZKB’s own country rating
Moody's
in CHF million
Share as %
in CHF million
Share as %
A
Aaa / Aa1 / Aa2 / Aa3
26,504
86.5
23,036
88.1
B
A1 / A2 / A3
1,812
5.9
1,224
4.7
C
Baa1 / Baa2 / Baa3
516
1.7
448
1.7
D
Ba1 / Ba2
1,268
4.1
857
3.3
E
Ba3
7
0.0
12
0.0
F
B1 / B2 / B3
340
1.1
279
1.1
G
Caa1 / Caa2 / Caa3 / Ca / C
179
0.6
306
1.2
Total
30,626
100.0
26,161
100.0
139
Zürcher Kantonalbank Annual Report 2024
› Financial Report
27
Balance sheet by currencies
Currencies translated in CHF million
CHF
USD
EUR
Other
Total
›Assets
Liquid assets
32,377
2
353
2
32,733
Amounts due from banks
252
2,465
491
197
3,405
Amounts due from securities financing transactions
12,204
8,286
4,851
8
25,349
Amounts due from clients
8,150
1,155
1,852
464
11,621
Mortgage loans
106,422
–
177
–
106,600
Trading portfolio assets
9,855
2,693
657
232
13,437
Positive replacement values of derivative financial instruments
1,951
247
448
23
2,669
Other financial instruments at fair value
–
–
–
–
–
Financial investments
5,061
0
145
0
5,206
Accrued income and prepaid expenses
419
61
31
2
513
Non-consolidated participations
154
–
1
0
155
Tangible fixed assets
495
–
2
0
497
Intangible assets
3
–
0
–
3
Other assets
253
73
51
28
405
Total assets shown in balance sheet
177,595
14,983
9,059
956
202,594
Delivery entitlements from spot exchange, forward forex,
forex options and precious metal transactions
134,966
158,897
87,563
40,812
422,238
Total assets
312,561
173,880
96,622
41,769
624,832
›Liabilities
Amounts due to banks
10,253
18,431
7,549
3,458
39,691
Liabilities from securities financing transactions
0
2,194
3,375
2,438
8,008
Amounts due in respect of customer deposits
95,317
4,473
6,154
1,036
106,980
Trading portfolio liabilities
1,562
1,049
222
29
2,862
Negative replacement values of derivative financial instruments
734
155
87
29
1,005
Liabilities from other financial instruments at fair value
2,899
1,034
441
47
4,421
Cash bonds
260
–
–
–
260
Certificate of deposits
50
–
–
–
50
Bond issues
9,126
–
1,869
–
10,994
Central mortgage institution loans
11,162
–
–
–
11,162
Accrued expenses and deferred income
1,032
160
77
17
1,287
Other liabilities
742
52
14
25
834
Provisions
175
–
2
–
177
Reserves for general banking risks
379
–
–
–
379
Bank’s capital
2,425
–
–
–
2,425
Retained earnings reserve
10,968
–
– 9
– 6
10,952
Foreign currency translation reserve
–
–
– 14
– 1
– 15
Consolidated profit
1,117
–
5
– 1
1,120
Total liabilities shown in the balance sheet
148,201
27,549
19,772
7,072
202,594
Delivery obligations from spot exchange, forward forex,
forex options and precious metal transactions
164,179
146,735
76,805
34,545
422,264
Total liabilities
312,380
174,284
96,578
41,617
624,858
Net position per currency in 2024
182
– 404
44
152
– 26
Net position per currency in 2023
– 1,844
272
303
222
– 1,047
140
Zürcher Kantonalbank Annual Report 2024
› Financial Report
j) Information on off-balance-sheet transactions
The following provides more detailed information on off-balance sheet positions as well as managed
assets and other liabilities not included in the balance sheet.
28
Contingent liabilities and contingent assets
in CHF million
2024
2023
Guarantees to secure credits and similar
466
434
Performance guarantees and similar
2,171
2,140
Irrevocable commitments arising from documentary letters of credit
1,419
1,198
Other contingent liabilities
–
–
Total contingent liabilities
4,056
3,772
Contingent assets arising from tax losses carried forward
–
–
Other contingent assets
–
–
Total contingent assets
–
–
29
Breakdown of credit commitments
There are no credit commitments as of 31 December 2024 and 31 December 2023.
30
Breakdown of fiduciary transactions
in CHF million
2024
2023
Fiduciary investments with third-party companies
1,066
983
Fiduciary investments with linked companies
–
–
Fiduciary loans
–
–
Fiduciary transactions arising from securities lending and borrowing
(in the bank’s own name for the account of customers)
–
–
Fiduciary crypto currencies held for customer's accounts
21
–
Other fiduciary transactions
–
–
Total
1,087
983
141
Zürcher Kantonalbank Annual Report 2024
› Financial Report
31
Breakdown of managed assets and presentation of their development
a)
Breakdown of managed assets
in CHF million
2024
2023
›Type of managed assets
Assets in collective investment schemes managed by the bank
170,958
141,113
Assets under discretionary asset management agreements
104,045
87,089
Other managed assets 3
182,274
167,583
Total managed assets (including double counting) 1 / 3
457,276
395,786
– of which, double counting
94,150
74,242
Assets with Custody Services 2 / 3
63,534
55,003
Total client assets (including double counting)
520,811
450,789
1
The assets under management include all client assets of an investment nature held with Zürcher Kantonalbank, as well as client assets held with third-party banks that are
managed by Zürcher Kantonalbank. Zürcher Kantonalbank also includes client deposits that are not of an investment nature in its reported assets under management.
Non-inclusion of accounts that do not have an investment element would lead to greater volatility in the assets under management and thus distort the meaningfulness of
reported trends in assets under management. Assets held in custody at Zürcher Kantonalbank that are managed by third parties (custody-only holdings) are not included in
either assets under management or total client assets. Holdings of banks and significant investment fund companies (including their collective pension fund foundations,
investment trusts, pension foundations and pension funds) and other institutional clients for which Zürcher Kantonalbank acts exclusively as custodian bank are treated as
custody-only.
2
Assets of clients who receive additional custody services from Zürcher Kantonalbank in addition to pure custody are shown as assets with custody services.
3
In the 2024 reporting year, Zürcher Kantonalbank clarified the criteria for distinguishing between assets under management and assets with custody services. The disclosure
was refined accordingly and the comparative figures adjusted. As at 31 December 2023, this led to a reclassification in the previous year from assets under management to
assets with custody services in the amount of CHF 55,003 million, as well as to a reduction in net new money of CHF 9,354 million and in fluctuations in prices and exchange
rates, interest and dividend payments of CHF 1,460 million.
b)
Presentation of the development of managed assets
in CHF million
2024
2023
Total managed assets (including double counting) at beginning
395,786
355,776
+ / – net new money inflow or net new money outflow 3 / 4
29,817
27,419
+ / – price gains / losses, interest, dividends and currency gains / losses 3 / 4
32,841
14,002
+ / – other effects
– 1,167
– 1,411
Total managed assets (including double counting) at end 3
457,276
395,786
4
The net new money inflow / outflow corresponds to the development of managed client assets adjusted for fluctuations in prices and exchange rates, interest and dividend
payments, fees and expenses charged to clients, and reclassification of assets. Changes due to acquisitions / disposals of subsidiaries are not included. The interest billed to loan
clients is included in the change in net new money inflow / outflow.
142
Zürcher Kantonalbank Annual Report 2024
› Financial Report
k) Information on the income statement
In this section, individual income statement items are broken down in greater detail
and the components of the return on equity explained.
32
Breakdown of the result from trading activities and
the fair value option
a)
Breakdown by business area (in accordance with the organisation
of the bank / financial group)
in CHF million
2024
2023
Result from trading in foreign exchange, bank notes and precious metals
146
159
Result from trading in bonds, interest rate and credit derivatives
93
153
Result from trading in equities and structured products
79
56
Result from other trading activities 1
34
48
Total
353
415
1
The result from other trading activities includes results from securities lending and borrowing as well as positions for which the Executive Board or
Asset Management is responsible.
b)
Breakdown by underlying risk and based on the use of the fair value option
Result from trading activities from:
in CHF million
Foreign
exchange
and bank
notes
Precious
metals
Securities
lending
and bor-
rowing
Bonds,
interest
rate and
credit de-
rivatives
Equities
and equity
derivatives
Commodi-
ties and
commodity
derivatives
Other
products 2
2024
Result from trading in foreign exchange,
bank notes and precious metals
146
128
10
–
8
–
–
–
Result from trading in bonds, interest rate and
credit derivatives
93
15
–
– 13
92
1
–
–
Result from trading in equities and structured products
79
28
– 7
0
58
3
– 0
– 3
Result from other trading activities
34
– 0
– 0
35
0
– 0
0
– 1
Total
353
170
2
22
159
3
0
– 4
– of which, from fair value option on assets
–
–
–
–
–
–
–
–
– of which, from fair value option on liabilities
– 304
– 3
– 1
–
– 7
– 294
– 0
0
2
The trading result from other products includes hybrid products and real estate derivatives.
143
Zürcher Kantonalbank Annual Report 2024
› Financial Report
33
Disclosure of material refinancing income in the item interest and
discount income as well as material negative interest
During financial year 2024, refinancing income from trading activities of CHF – 369.5 million (previous
year: CHF – 435.6 million) was included in the item Interest and discount income. The item Interest and discount
income also includes the result of currency swaps in the amount of CHF 1,141.9 million (previous year:
CHF 987.4 million), which were entered into solely for the purpose of engaging in interest arbitrage. Negative
interest on lending business is shown as a reduction in the interest and discount income. Negative interest
on deposit-taking business is shown as a reduction in interest expenses.
in CHF million
2024
2023
Negative interest on lending business (reduction in interest and discount income)
0
0
Negative interest on deposit-taking business (reduction in interest expenses)
1
2
34
Breakdown of personnel expenses
in CHF million
2024
2023
Salaries and benefits
982
959
– of which, alternative forms of variable compensation
–
1
AHV, IV, ALV and other social security contributions
204
187
Changes in book value for economic benefits and obligations arising from pension schemes
–
–
Other personnel expenses
37
34
Total
1,223
1,180
35
Breakdown of general and administrative expenses
in CHF million
2024
2023
Office space expenses
33
33
Expenses for information and communications technology
193
180
Expenses for vehicles, equipment, furniture and other fixtures, as well as operating lease expenses
2
2
Fees of audit firms
7
7
– of which, for financial and regulatory audits
7
7
– of which, for other services
0
0
Other operating expenses
272
276
– of which, compensation for state guarantee
31
30
Total
508
499
144
Zürcher Kantonalbank Annual Report 2024
› Financial Report
36
Explanations regarding material losses, extraordinary income and expenses,
reserves for general banking risks and value adjustments and
provisions no longer required
in CHF million
2024
2023
›Extraordinary income
Reversal of impairment on other participations
2
1
Income from sale of other real estate / bank premises
9
–
Income from sale of participations
0
–
Other
1
0
Total
12
1
›Extraordinary expenses
Losses from sale of other real estate / bank premises
–
–
Losses from disposal of participations
–
–
Other
0
–
Total
0
–
›Changes in reserves for general banking risks
Creation of reserves for general banking risks
–
225 1
Release of reserves for general banking risks
–
–
Total
–
225
1
Allocation to strengthen the bank’s capital.
37
Disclosure of and reasons for revaluations of participations
and tangible fixed assets up to acquisition cost at maximum
in CHF million
2024
2023
Participations
Registered office
CLS Group Holdings AG
Lucerne
0
0
TWINT Ltd.
Zurich
1
0
Total
1
1
Appreciation is applied to non-listed participations in accordance with the mean value method and, for listed participations, in accordance with the market value method.
145
Zürcher Kantonalbank Annual Report 2024
› Financial Report
38
Income statement broken down according to domestic and foreign origin,
according to the principle of permanent establishment
2024
2023
in CHF million
Domestic
Foreign
Domestic
Foreign
›Result from interest operations
Interest and discount income
4,326
17
4,004
10
Interest and dividend income from financial investments
40
0
32
0
Interest expense
– 2,631
– 14
– 2,170
– 7
Gross result from interest operations
1,734
3
1,866
4
Changes in value adjustments for default risk and losses
from interest operations
– 57
0
– 49
0
Subtotal net result from interest operations
1,677
3
1,816
4
›Result from commission business
and services
Commission income from securities trading and investment activities
1,334
177
1,209
150
Commission income from lending activities
77
0
72
0
Commission income from other services
148
0
160
0
Commission expense
– 581
– 124
– 520
– 113
Subtotal result from commission business and services
977
53
920
37
›Result from trading activities
Result from trading activities and the fair value option
335
18
386
29
›Other result from ordinary activities
Result from the disposal of financial investments
10
–
7
–
Income from participations
14
–
13
–
– of which, participations valued using the equity method
1
–
1
–
– of which, from other non-consolidated participations
13
–
12
–
Result from real estate
8
0
8
0
Other ordinary income
34
0
35
0
Other ordinary expenses
– 6
0
– 16
–
Subtotal other result from ordinary activities
59
0
47
0
Operating income
3,048
74
3,169
71
›Operating expenses
Personnel expenses
– 1,199
– 24
– 1,160
– 20
General and administrative expenses
– 517
– 25
– 511
– 34
Subtotal operating expenses
– 1,715
– 49
– 1,671
– 54
Value adjustments on participations and depreciation and amortisation
of tangible fixed assets and intangible assets
– 71
– 1
– 74
– 1
Changes to provisions and other value adjustments and losses
– 7
– 1
28
0
Operating result
1,255
22
1,453
17
Extraordinary income
12
0
1
0
Extraordinary expenses
– 0
– 0
–
–
Changes in reserves for general banking risks
–
–
– 225
–
Consolidated profit before taxes
1,267
22
1,229
17
Taxes
– 164
– 4
– 5
– 2
Consolidated profit
1,102
18
1,224
15
146
Zürcher Kantonalbank Annual Report 2024
› Financial Report
39
Presentation of current taxes, deferred taxes, and disclosure
of tax rate
in CHF million
2024
2023
Creation of provisions for deferred taxes
–
–
Reversal of provisions for deferred taxes
0
0
Recognition of deferred taxes on losses carried forward
– 2
– 1
Recognition of other deferred taxes
0
0
Reversal of other deferred taxes
– 0
–
Expenses for current income and capital taxes
– 165 1
– 7
Expenses for property gains taxes
– 2
–
Total
– 168
– 7
Unrecognised tax reductions on losses carried forward,
and tax credits not recognised under the principle of prudence
–
–
Hypothetical deferred income taxes calculated at theoretical tax rates
on revaluations of investments not relevant for tax purposes
–
–
Figures in table: minus = expense; plus = income
1
Of which OECD minimum tax CHF 156 million
Average weighted tax rate (basis: operating result): 13.2 %
40
Disclosures and explanations of the earnings per equity security
in the case of listed banks
Zürcher Kantonalbank has no listed equity securities.
41
Components of return on equity
2024
2023
Return on equity (RoE)
8.0 %
9.3 %
in CHF million
2024
2023
Relevant net annual result for calculating ROE
Consolidated profit
1,120
1,238
Total
1,120
1,238
Relevant average equity 1 for calculating ROE
Average bank’s capital
2,425
2,425
Average other equity components
11,647
10,932
Total
14,072
13,357
1
The average bank’s capital and other equity components are calculated on a monthly basis.
147
Zürcher Kantonalbank Annual Report 2024
› Financial Report
l) Risk report
1.1.1 Risk profile
The risk profile of Zürcher Kantonalbank has not changed significantly compared to the
previous year and remains robust as at the end of the 2024 financial year.
The corporate loan portfolio shows pleasing growth. Among other things, opportuni-
ties arose for Zürcher Kantonalbank from the reorientation of various companies following
the merger of the big banks. The portfolio remains stable in terms of default risks. While the
export-oriented sectors suffered from subdued international demand, domestic and consumer-
oriented sectors benefited from robust private consumption. The regular assessment of all ma-
jor unsecured balance sheet exposures has not revealed any extraordinary risks. Uncertainties
nevertheless remain due to several factors, including the ongoing geopolitical tensions, the
change of governments in Europe and the threat of trade barriers from the US.
On the Swiss real estate markets, the risks of potential valuation and price corrections
have eased further with the lower interest rates. The residential real estate market in particular
continues to see structural excess demand, which is supporting rental and price trends. The
mortgage portfolio of Zürcher Kantonalbank grew 5.7 percent in 2024, outperforming the
overall market. Growth in owner-occupied housing was 2.1 percent. Credit risk management
ensures that the portfolio growth in mortgage lending maintains a balanced risk profile.
The risk profile in trading was largely characterised by credit risks in bond trading. Value
at risk (VaR) was CHF 10 million at the end of the year and therefore lower than at the end
of 2023 (CHF 14 million). The utilisation of the risk capital limit allocated internally for trading
(capital at risk) was 56 percent at the end of the year (previous year: 65 percent).
The bank managed the risks of its balance sheet structure against the backdrop of falling
interest rates and, as a consequence thereof, changes in client behaviour when choosing mort-
gage products. With the SNB’s interest rate cuts, client preference shifted in the second half of
the year from rollover mortgages to fixed-term mortgages with longer terms. The interest rate
sensitivity of the CHF banking book at the end of the year was slightly below the level at the
end of the previous year (– 2 per cent).
The good liquidity situation of Zürcher Kantonalbank is reflected in the solid liquidity risk
ratios. Since 1 January 2024, additional liquidity requirements with a stress horizon of 90 days
(previously only 30 days) have applied to systemically important banks. All regulatory liquidity
requirements, including the net stable funding ratio (NSFR), were comfortably met at all times.
The bank’s risk profile for operational risks (OpRisk) has not changed fundamentally. Pro-
cess and cyber risks continue to be the two OpRisk areas with the most significant residual risks.
The management of these risks therefore continues to receive a high degree of attention. The
dynamics of business activity and increasing regulation are constantly raising the requirements
for expert knowledge and models for an appropriate control environment. Internal planning
and budgeting ensure that the necessary resources are allocated accordingly.
The risk profile in the area of compliance risks has also remained stable. The implemen-
tation of the continually evolving regulatory and statutory framework, particularly regarding
investor protection, data protection and the fight against money laundering, continued to
require the deployment of substantial resources in 2024. A further focus was placed on devel-
opments in sustainability topics in order to meet the increasing legal requirements. In the year
under review, for example, special efforts were necessary to update anti-money laundering
systems and manage legal and compliance risks connected to sanctions imposed in response
to geopolitical conflicts.
Zürcher Kantonalbank discloses its climate-related financial risks. This is in accordance
with FINMA’s requirements for systemically important banks. Climate protection has long been
a central issue for Zürcher Kantonalbank. The bank has underscored this commitment by joining
the Net-Zero Banking Alliance. Climate-related financial risks, however, do not represent a top
risk for the bank. This can be explained by the nature of the business activities and the strong
focus on the Zurich economic area. A summary of the corresponding risk analysis can be found
at the end of the risk report in section 1.10.
148
Zürcher Kantonalbank Annual Report 2024
› Financial Report
1.1.2 Risk management and internal control system (ICS)
Zürcher Kantonalbank defines “risk management” and “internal control system (ICS)”
as follows:
Risk management: As part of risk management, the bank sets its risk tolerance within its risk
capacity. Risk management encompasses organisational structures, methods and processes.
Zürcher Kantonalbank’s risk management process consists of six steps: risk identification, as-
sessment, control, management, monitoring and reporting. The decisions in risk management
are implemented in the internal control system (ICS).
Internal control system (ICS): The ICS ensures that processes are carried out properly. To this
end, management issues appropriate guidelines and ensures that compliance is monitored. An
effective ICS includes risk-based control activities, suitable risk management and compliance
processes, and appropriate supervisory bodies for the size, complexity and risk profile of the
institution, in particular an independent risk control and compliance function.
1.1.3 Principles of risk management
The objective of risk management is to support the bank in generating added value while
maintaining a first-class credit rating and reputation. Zürcher Kantonalbank’s approach to risk
management is based on the following principles:
– Risk culture: The bank fosters a risk culture that is geared towards responsible behav-
iour. Risk managers bear responsibility for profits and losses generated from the risks
entered into. In addition, they have primary responsibility for identifying transactions
and structures that entail particular business policy risks, conflicts of interest or particular
effects on the bank’s reputation.
– Separation of functions: For significant risks and to avoid conflicts of interest, the bank
has established control processes that are independent of management.
– Risk identification and monitoring: The bank enters into transactions only if the risks are
in accordance with its business strategy and can be appropriately identified, restricted,
managed and monitored.
– Risk and return: The bank seeks to achieve a balanced relationship between risk and
return for all transactions. Assessment of the risk / return profile takes account of quan-
tifiable as well as non-quantifiable risks.
– Transparency: Risk reporting and disclosure are guided by high industry standards in
terms of objectivity, scope, transparency and timeliness. These principles constitute the
basis for determining the organisational structure and processes of group-wide risk
management.
1.1.4 Principles of compliance
The objective of compliance is to ensure that Zürcher Kantonalbank conducts its business
operations in accordance with legal and ethical norms. The principles of the compliance policy
are as follows: relevant legal and ethical norms; ethical and performance-related basic values
in a code of conduct; duty of all employees and members of governing bodies to comply with
laws, regulations, internal rules, industry standards; a secure and confidential procedure for re-
porting possible violations of the rules (whistleblowing). Primary responsibility for compliance lies
with the Executive Board. The specialist Legal & Compliance group function prepares an annual
assessment of compliance risk and a corresponding action plan based on a risk inventory. The
Compliance function is organisationally independent of the income-driven business units. The
most important principle of all is that Zürcher Kantonalbank conducts its banking operations
in accordance with the statutory and regulatory provisions as well as recognised professional
and ethical principles within the banking industry.
1.1.5 Risk and compliance organisation
The risk management organisation is based on the Three Lines model. The income-driven
business units form the first line. They actively manage risks and are responsible for constant
149
Zürcher Kantonalbank Annual Report 2024
› Financial Report
compliance with internal and external risk tolerance and compliance requirements. The inde-
pendent risk management and control units represent the second line. Under the stewardship
of the Chief Risk Officer (CRO) or the General Counsel, they identify, evaluate and monitor risks
and submit regular reports to the Executive Board and the Board of Directors. The third line is
the Audit unit, which is responsible for the internal auditing of Zürcher Kantonalbank under
the applicable laws and regulations. Each line is supported by the appropriate committees (see
Figure 1).
Board of Directors and Chairperson’s Committee
The Board of Directors approves the principles for risk management and compliance, the
Code of Conduct and Ethics, the framework for group-wide risk management and the risk toler-
ance regulations at group level. It is responsible for the regulation, organisation and monitoring
of an effective risk management system as well as the management of overall risks. The Board of
Directors is responsible for ensuring that there is a suitable risk and control environment within
the group and arranges for an effective internal control system. It also approves transactions
involving major financial exposure. The Risk Committee and Audit Committee of the Board of
Directors support the Board in its tasks and duties in the areas of risk management and the
internal control system.
The Chairperson’s Committee approves limits and deals with transactions involving par-
ticular business policy risks, conflicts of interest or particular effects on the group’s reputation
where these exceed the remit of the Executive Board and do not fall within the remit of the
Board of Directors.
Audit
Audit supports the Board of Directors in fulfilling its statutory supervisory and control tasks
and discharges the monitoring tasks assigned to it by the Board of Directors. In particular, Audit
independently and objectively evaluates the appropriateness and effectiveness of the internal
control and risk management processes as well as the management and monitoring processes
and contributes towards their improvement. Audit works independently of day-to-day business
activities and does not take on any operational tasks or control activities. Audit has unlimited
rights of inspection, information and access within the entire group. Audit has no authority to
issue instructions, but has the right to make recommendations. Audit reporting is independent
and not bound by instructions.
Executive Board
The Executive Board issues provisions for the identification, evaluation, control, man-
agement, monitoring and reporting of risks in the form of directives. The Executive Board also
approves transactions that entail particular business policy risks, conflicts of interest or particular
effects on the reputation of Zürcher Kantonalbank, unless they are assigned to another governing
body under the applicable regulations.
Conflicts Committee
Based on the responsibilities delegated to them, the members of the Executive Board
who sit on the Conflicts Committee take decisions regarding transactions that entail particular
business policy risks, conflicts of interest and particular effects on the group’s reputation. The
Conflicts Committee is chaired by the CEO; its escalation body is the Chairperson’s Committee.
Risk Committee of the Executive Board
The Risk Committee assists the Executive Board in defining risk management processes.
The Committee is chaired by the Chief Risk Officer (CRO) and approves the methods of risk
measurement on the basis of the responsibilities delegated to it. The risk managers on the four
separate subcommittees (credit, trading, treasury and operational risk) and members of the risk
and compliance organisation discuss the Risk Committee’s business and formulate proposals
for its attention. In a crisis situation, individual crisis management teams reporting to the Risk
Committee ensure that necessary and appropriate measures are defined and implemented.
150
Zürcher Kantonalbank Annual Report 2024
› Financial Report
1
General Counsel has the right of escalation to the Chairperson’s Committee at any time.
Board of Directors
Executive Board (EB)
Risk managers
Risk and compliance functions
Committees
CRO line
Compliance line
CEO
General Counsel
Risk managers
Risk management
independent of
individual case
Preventative
management of
compliance risks
in individual case
Board of Directors
Risk Committee
Risk
Committee
of the EB
General Counsel 1
Representatives
of CRO line
Representatives
of risk managers
CRO
CEO
CFO
International
Committee
General Counsel 1
Head of International
Business & Custody
CRO
EB Products, Services
& Direct Banking
EB Private Banking
EB Institutionals
& Multinationals
CRO
Risk Control
Preventative risk
management
Chairperson’s
Committee
Audit Committee
Audit
Conflicts
Committee
General Counsel 1
CEO
CRO
EB risk managers
Fig. 1: Risk and compliance organisation
151
Zürcher Kantonalbank Annual Report 2024
› Financial Report
International Committee
The International Committee is chaired by the CRO. It defines the specific business policy
requirements for transactions with an international dimension, monitors and reports on such
transactions, approves the business framework for foreign activities for the Executive Board
and approves individual transactions and types of transactions outside the approved business
framework.
Risk unit
The CRO is a member of the Executive Board and heads the Risk unit and also has a right
of intervention that permits measures to be assigned to the risk managers if required by the
risk situation or to protect the bank. The CRO also enjoys direct access to the Chairperson’s
Committee at all times.
The risk control function, which monitors portfolio-level risks and the Board of Directors’
risk tolerance requirements, reports to the Executive Board and the Board of Directors. The risk
control function is responsible for defining methods of risk measurement, model validation, as
well as execution and quality assurance in relation to the risk measurement implemented.
Preventative risk management examines transactions before they are finalised and systems
prior to their deployment in line with existing delineations of power and consultation duties, and
defines the requirements at individual transaction or system level. It also continuously monitors
local risks and supports the training of risk managers.
Preventive risk management of operational risks is carried out outside the Risk business
unit by the process chain managers and in the IT, Operations & Real Estate business unit, which
is responsible for issuing guidelines and managing the group’s security (Cyber Security and
Physical Security specialist unit) and business continuity management.
Compliance line
The General Counsel reports directly to the CEO and manages the Compliance unit. As a
member of the Risk, Conflicts and International Committee of the Executive Board, the General
Counsel has a right of escalation to the Chairperson’s Committee and also enjoys direct access
to the Chairperson’s Committee at all times.
The specialist Legal & Compliance group function has the following duties, among others:
examining the compliance risk inventory on an annual basis and preparing the action plan with
focal points relating to the management of compliance risks, formulating proposals and carrying
out defined monitoring and control duties (e. g. as pre-deal or post-deal control), as well as de-
fining risk management tools. The Compliance function also defines risk management measures
for compliance risk independently of the individual case, such as the editing of directives when
implementing new ordinances as well as conducting training courses. The Compliance function
is further responsible for providing forward-looking legal advice with the objective of avoiding
or minimising individual identified risks and threats arising from legal requirements. Legal advice
is provided in the context of existing mandatory consultations, as a pre-deal consultation or on
request.
Risk managers
The risk managers bear responsibility for profits and losses generated on the risks entered
into. They are responsible for the continuous, active management of risks and for compliance
with internal risk tolerance regulations, relevant laws, ordinances, circulars and standards. The
sales units are responsible for credit risks as risk managers and the Trading and Capital Markets
organisational unit for market risks in the trading book. Interest rate risks in the banking book
and liquidity risks are the responsibility of Treasury in the Finance unit. All units of the bank are
responsible for managing operational and compliance risks.
Risk reporting
The Risk Control and Compliance functions report on a quarterly basis as part of inte-
grated risk reporting to the Executive Board and Board of Directors on the development of the
152
Zürcher Kantonalbank Annual Report 2024
› Financial Report
risk profile, on material internal and external events, and on findings from monitoring activities.
Quarterly reports are supplemented by special analyses on relevant topics. Besides quarterly
reporting, various reports are produced for the individual types of risk. In terms of the frequency
with which they are published and the group of recipients, they are tailored to individual risks,
and they provide comprehensive, objective and transparent information for decision-makers
and supervisory bodies.
1.2
Regulatory capital adequacy and liquidity requirements
This section includes the regulatory key figures (Table KM1) to be published in the annual
report in accordance with FINMA Circular 2016 / 1. The other tables on qualitative and quanti-
tative disclosure as at 31 December 2024 will be available online from the end of April 2025 at
zkb.ch/disclosure.
Under Basel III, a selection of different approaches is available to banks for the calculation
of capital adequacy requirements for credit, market and operational risks. The capital required
for credit risks has been calculated using the IRB approach (F-IRB) since the end of 2017. For
market risks, the model-based approach is used in combination with the international standard
approach (SA-BIS) for specific interest rate risks. The capital base needed for operational risks
is calculated using the basic indicator approach. The Basel III (final) requirements come into
force in Switzerland on 1 January 2025. The amendments will affect the calculation of capital
adequacy requirements for the 2025 financial year. The first disclosure in accordance with the
new requirements will take place at the end of March 2025.
A FINMA directive from 2012 permits Zürcher Kantonalbank to solo-consolidate the
subsidiary Zürcher Kantonalbank Finance (Guernsey) Ltd. in line with the individual institution
provisions. Accordingly, the required capital is calculated on a solo-consolidated basis by the
parent company.
As at 31 December 2024, the group had minimum required capital of CHF 6,915 million,
compared with eligible capital of CHF 16,095 million. Both the total capital ratio of 18.6 percent
of risk-weighted assets and the leverage ratio of 6.8 percent reflect Zürcher Kantonalbank’s
solid equity base.
The liquidity coverage ratio (LCR) of 142 percent and the net stable funding ratio (NSFR)
of 116 percent point to a comfortable liquidity situation. The following two pages show the
regulatory key figures for the group and the parent company, with essentially the same picture
in the capital and liquidity situation.
The breakdown of the regulatory minimum required capital within the group of CHF 6,915
million shows the importance of the lending business to Zürcher Kantonalbank (Figure 3).
153
Zürcher Kantonalbank Annual Report 2024
› Financial Report
88 %
7 %
4 %
1 %
Credit and counterparty credit risk
Operational risk
Market risk
Non-counterparty related risks
7 %
4 % 1 %
Total
(in CHF million)
6,915
88 %
Fig. 3: Breakdown of the regulatory risk-weighted minimum required capital
as at 31.12.2024, by risk category
154
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Fig. 2a: Table KM1: Key regulatory figures group
Group
a
b
c
d
e
in CHF million (unless indicated otherwise)
31.12.2024
30.9.2024
30.6.2024
31.3.2024
31.12.2023
›Eligible capital
1
Common equity Tier 1 (CET1)
14,482
13,725
13,739
13,738
13,734
2
Tier 1 capital (T1)
15,546
14,789
14,803
14,795
14,797
3
Total capital 1
16,095
15,332
15,350
15,445
15,427
Total loss absorbing capacity (TLAC) 2
22,198
21,305
21,315
21,384
21,128
›Risk-weighted assets (RWA)
4
RWA
86,443
82,521
82,023
83,300
78,952
›Minimum required capital
4a
Minimum required capital
6,915
6,602
6,562
6,664
6,316
›Risk-based capital ratios (as a % of RWA)
5
CET1 ratio 1
16.8 %
16.6 %
16.8 %
16.5 %
17.4 %
6
Tier 1 capital ratio 1
18.0 %
17.9 %
18.0 %
17.8 %
18.7 %
7
Total capital ratio 1
18.6 %
18.6 %
18.7 %
18.5 %
19.5 %
TLAC ratio 2
25.7 %
25.8 %
26.0 %
25.7 %
26.8 %
›CET1 buffer requirements (as a % of RWA)
8
Capital conservation buffer as per the Basel minimum standards
(2.5 % from 2019)
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
9
Countercyclical buffer (§ 44a CAO) in accordance with the Basel
minimum standards
0.0 %
0.0 %
0.0 %
0.0 %
0.0 %
10
Additional capital buffer due to international or national system
relevance
–
–
–
–
–
11
Total of bank CET1 specific buffer requirements
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
12
CET1 available after meeting the bank’s minimum capital requirements
10.6 %
10.6 %
10.7 %
10.5 %
11.5 %
›Capital target ratios as per Annex 8 to the CAO
(as a % of RWA) 3
Countercyclical buffer (§ 44 CAO)
0.9 %
0.9 %
0.9 %
0.9 %
0.9 %
›Basel III leverage ratio
13
Total Basel III leverage ratio exposure measure
227,125
227,341
225,875
229,724
223,870
14
Basel III leverage ratio (Tier 1 capital in % of leverage ratio exposure
measure)
6.8 %
6.5 %
6.6 %
6.4 %
6.6 %
TLAC leverage ratio (TLAC in % of leverage ratio exposure measure) 2
9.8 %
9.4 %
9.4 %
9.3 %
9.4 %
›Liquidity coverage ratio (LCR) 4
15
LCR numerator: total high-quality liquid assets (HQLA)
52,039
52,780
53,171
50,994
46,388
16
LCR denominator: total net outflows of funds
36,521
34,314
36,434
34,548
31,511
17
Liquidity coverage ratio (LCR)
142 %
154 %
146 %
148 %
147 %
›Net stable funding ratio (NSFR)
18
Available stable funding
121,070
121,187
118,512
120,855
116,118
19
Required stable funding
104,144
101,867
100,873
102,128
98,921
20
Net stable funding ratio, (NSFR)
116 %
119 %
117 %
118 %
117 %
1
In accordance with the provisions of the CAO for non-systemically important banks.
2
In accordance with the provisions for systemically important banks. TLAC includes core capital (going concern) and eligible additional loss-absorbing capital (gone concern).
For details on the composition of the eligible additional loss-absorbing capital (gone concern), please refer to the separate report "Disclosure of systemically important banks".
3
Systemically important banks can forego the information in rows 12a to 12e, as Annex 8 to the CAO does not apply to them. In this instance, they must nevertheless provide
information on the countercyclical buffer in accordance with § 44 CAO.
4
Simple average of the closing values on the business days during the quarter under review.
155
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Fig. 2b: Table KM1: Key regulatory figures parent company
Parent company
a
b
c
d
e
in CHF million (unless indicated otherwise)
31.12.2024
30.9.2024
30.6.2024
31.3.2024
31.12.2023
›Eligible capital
1
Common equity Tier 1 (CET1)
14,625
13,881
13,880
13,879
13,879
2
Tier 1 capital (T1)
15,689
14,945
14,944
14,936
14,942
3
Total capital 1
16,238
15,488
15,491
15,585
15,572
Total loss absorbing capacity (TLAC) 2
22,359
21,483
21,478
21,546
21,294
›Risk-weighted assets (RWA)
4
RWA
87,023
83,075
82,586
83,821
79,509
›Minimum required capital
4a
Minimum required capital
6,962
6,646
6,607
6,706
6,361
›Risk-based capital ratios (as a % of RWA)
5
CET1 ratio 1
16.8 %
16.7 %
16.8 %
16.6 %
17.5 %
6
Tier 1 capital ratio 1
18.0 %
18.0 %
18.1 %
17.8 %
18.8 %
7
Total capital ratio 1
18.7 %
18.6 %
18.8 %
18.6 %
19.6 %
TLAC ratio 2
25.7 %
25.9 %
26.0 %
25.7 %
26.8 %
›CET1 buffer requirements (as a % of RWA)
8
Capital conservation buffer as per the Basel minimum standards
(2.5 % from 2019)
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
9
Countercyclical buffer (§ 44a CAO) in accordance with the Basel
minimum standards
0.0 %
0.0 %
0.0 %
0.0 %
0.0 %
10
Additional capital buffer due to international or national system
relevance
–
–
–
–
–
11
Total of bank CET1 specific buffer requirements
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
12
CET1 available after meeting the bank’s minimum capital requirements
10.7 %
10.6 %
10.8 %
10.6 %
11.6 %
›Capital target ratios as per Annex 8 to the CAO
(as a % of RWA) 3
Countercyclical buffer (§ 44 CAO)
0.9 %
0.9 %
0.9 %
0.9 %
0.9 %
›Basel III leverage ratio
13
Total Basel III leverage ratio exposure measure
227,040
227,208
225,756
229,653
223,907
14
Basel III leverage ratio (Tier 1 capital in % of leverage ratio exposure
measure)
6.9 %
6.6 %
6.6 %
6.5 %
6.7 %
TLAC leverage ratio (TLAC in % of leverage ratio exposure measure) 2
9.8 %
9.5 %
9.5 %
9.4 %
9.5 %
›Liquidity coverage ratio (LCR) 4
15
LCR numerator: total high-quality liquid assets (HQLA)
51,961
52,709
53,108
50,942
46,343
16
LCR denominator: total net outflows of funds
36,618
34,412
36,564
34,698
31,607
17
Liquidity coverage ratio (LCR)
142 %
153 %
145 %
147 %
147 %
›Net stable funding ratio (NSFR)
18
Available stable funding
120,312
120,352
117,615
120,023
115,412
19
Required stable funding
104,246
101,797
100,707
102,052
98,865
20
Net stable funding ratio, (NSFR)
115 %
118 %
117 %
118 %
117 %
1
In accordance with the provisions of the CAO for non-systemically important banks.
2
In accordance with the provisions for systemically important banks. TLAC includes core capital (going concern) and eligible additional loss-absorbing capital (gone concern).
For details on the composition of the eligible additional loss-absorbing capital (gone concern), please refer to the separate report "Disclosure of systemically important banks".
3
Systemically important banks can forego the information in rows 12a to 12e, as Annex 8 to the CAO does not apply to them. In this instance, they must nevertheless provide
information on the countercyclical buffer in accordance with § 44 CAO.
4
Simple average of the closing values on the business days during the quarter under review.
156
Zürcher Kantonalbank Annual Report 2024
› Financial Report
68 %
14 %
10 %
4 %
Credit risks
Balance sheet structure
Operational risks
Trading business
2 %
Financial investments and participations
2 %
Real estate
Total
(in CHF million)
6,340
68 %
10 %
4 %
2 %
14 %
2 %
1.3
Capital allocation within internal risk management
Zürcher Kantonalbank employs a capital at risk approach to internal risk management.
The Board of Directors defines the risk tolerance with the maximum risk capital. The Board of
Directors determines the quantitative risk tolerance requirements by allocating risk capital to the
risk categories of credit, market and operational risks 1. The models are based on an observation
horizon of one year and a maximum probability of default of 0.1 percent per year.
The risk capital for market and credit risks is allocated to the individual organisational
units, and the cost of capital is charged to the units. In the case of operational risks, there is no
internal allocation of the cost of capital.
Of the CHF 15,427 million in eligible capital (total capital) at the end of 2023, a total of
CHF 6,340 million was allocated to the risk business in 2024. The percentage breakdown by
risk category of the allocated capital is shown in Figure 4.
Fig. 4: Risk capital assigned by the Board of Directors, by risk category
1
The risk capital for operational risks also covers compliance risks.
157
Zürcher Kantonalbank Annual Report 2024
› Financial Report
1.4
Risk categories
Zürcher Kantonalbank divides risks into the following categories.
Credit risk
Credit risk constitutes the risk of financial losses that can arise if clients or
counterparties do not fulfil contractual obligations that are falling due or do
not fulfil them on time. Loans, promises of payment and trading transac-
tions all involve credit risks. Credit risks also include counterparty risks and
country risks. Counterparty risks refer to credit risks in trading transactions
(e. g. OTC derivatives and SLB transactions). Trading transactions usually
include mutual claims, which also depend on market parameters. Counter-
party risks are also referred to as counterparty default risks. Settlement
risks are fulfilment risks. This is the risk of losses in connection with transac-
tions involving mutual payment and delivery obligations, where the bank
must meet its delivery obligation without first being able to ensure that
counter-payment will be made. Country risks: The risk of losses as the result
of country-specific events, such as transfer risks (payment of a liability is
restricted or prevented by a country) and risks arising from political and / or
macroeconomic events.
Market risk
Market risks comprise the risk of financial losses on securities and derivatives
in the bank’s own portfolio as a result of changes in market factors, such as
share prices, interest rates, volatilities or exchange rates (general market
risks), as well as for issuer specific reasons (specific market risks). Market risks
also include balance sheet interest rate risk, market liquidity risk and issuer
(default) risk. Balance sheet interest rate risk is the risk that changes in market
interest rates will impact negatively on the financial situation of the banking
book. As well as affecting current interest income, changes in interest rates
have implications for future results. The interest rate risk is managed based
on the market interest method. Market liquidity risk is the risk that a product
can no longer be easily sold (or purchased) on a market. The higher the
market liquidity, the greater the chance of purchasing or selling a product for
an appropriate price at the desired time. Issuer (default) risk is the risk of
a loss arising from a change in fair value resulting from a credit event affecting
an issuer to which the bank is exposed through marketable securities or
derivatives from this issuer.
Liquidity risk
Liquidity refers to the bank’s capacity to settle its liabilities promptly and
without restrictions. Liquidity risk is the risk that this capacity to pay will be
impaired under institution or market-related stress conditions. Liquidity
risks also include (re)financing risk. Refinancing refers to the procurement of
funds for the financing of assets. Refinancing risk is the risk that the bank
is not in a position to procure sufficient funds at appropriate conditions for
the ongoing financing of its lending business. Short-term liquidity ensures
that the bank is able to make payments over a short period of time in the
event of a systemic or institution-specific liquidity crisis by holding a suffi-
ciently large inventory of high-quality liquid and unencumbered assets as
a financial precaution against a temporary liquidity gap. Often, 30 and
90 calendar days are used as the definition period. The regulatory indicator
for short-term 30-day liquidity is the liquidity coverage ratio (LCR), supple-
mented by the special liquidity requirements with a 90-day horizon for sys-
temically important banks. Structural liquidity has a medium-term horizon
and ensures that refinancing as per the liquidity profile of the assets takes
place with stable liabilities. Structural liquidity requirements specify that
illiquid assets such as loans to private individuals and companies, as well as
parts of the trading portfolio, are to be refinanced through long-term
liabilities. The regulatory indicator for structural liquidity is the net stable
funding ratio (NSFR).
Operational risk
Operational risks are the risk of financial losses that occur as a result of the
inadequacy or failure of internal processes or systems, inappropriate human
behaviour, human error, or as a result of external events. Operational risks
also include IT and cyber risks. IT risks refer to the potential damage caused
by the loss of confidentiality, integrity and availability of data and functions
in IT systems. Cyber risks comprise the risk of attacks from the Internet or
similar networks (referred to as hacker attacks) on the confidentiality, integrity
and availability of data and functions in IT systems.
Compliance risk
Compliance risks are behavioural risks. These are risks that are caused by
breaches of the law, regulations or contracts and can result in legal and regu-
latory sanctions, financial losses and reputational damage. Compliance is
the observance of legal, regulatory and internal regulations as well as the
adherence to industry standards and codes of conduct by the group, its em-
ployees and members of governing bodies. This also includes compliance
with organisational measures and processes.
Strategic risk
Strategic risks are all possible factors of influence, events and decisions
that have the potential to endanger the long-term success of the company.
Business risk
Business risk is the risk that lower business volumes and margins will reduce
the group’s operating result if the decline in operating income is not offset
by a simultaneous drop in operating expenses. Business risks also include
unplanned additional costs in the absence of correspondingly higher income.
Business risks materialise when actual income falls short of the budgeted
income. This can occur on a one-off and a recurring basis. Typical examples
of business risks are unexpectedly decreasing margins and a lack of client
demand following an economic downturn.
Reputation risk
Reputation risk involves the risk of damage to the good reputation of the
company, the brand or a person, or, in extreme cases, losing it altogether.
Conducting business activities in compliance with the law and in accordance
with the company’s core values is the best guarantee for maintaining its
good reputation. At the same time, it is important to avoid negative reputa-
tional consequences for the bank. Reputation denotes the image that a
company enjoys among its stakeholders, i. e. the bank’s standing in terms of
its integrity, competency, performance and reliability from the perspective
of stakeholders. Reputational damage occurs when the perception of a stake-
holder group differs from its expectations. The trustworthiness and credi-
bility of the bank as aspects of its reputation are negatively influenced by this
difference. Reputation is determined by constantly comparing perceptions
and expectations over a period of time and is reflected in the company’s val-
ues and identity.
Fig. 5: Risk categories
158
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Reputation risks are treated as a separate category by Zürcher Kantonalbank. Nevertheless
it also sees them as a derived risk: They are considered a reputation-affecting component of
strategic risks, market and credit risks, liquidity risks, compliance risks, operational risks and
business risks. Strategic risks and business risks are managed as part of the bank’s strategy
and controlling process. Risk management and the risk profile in the other risk categories are
described in the following sections.
Sustainability risks are events or conditions related to the environment, society or governance
(ESG), the occurrence of which may have actual or potential negative effects on the bank’s
assets, finances and earnings, as well as on its reputation. Sustainability risks are a component
of the risk categories listed above.
The management of sustainability risks is an integral part of the bank’s risk management
processes. For example, aspects of sustainability, such as environmental or social risks, are
an important part of risk assessment when reviewing financing for companies that operate
globally. Zürcher Kantonalbank’s lending rules also explicitly exclude the project financing of
certain commodities, such as crude and heavy oil, thermal coal, precious woods, live goods,
etc., as well as coal mining, oil and gas extraction, and fossil-fuel power plants. The sustain-
ability mandate, support mandate and service mandate together form Zürcher Kantonalbank’s
public service mandate, which is anchored in the Cantonal Banking Act on Zürcher Kantonal-
bank and implemented in the “Guidelines for the Fulfilment of the Public Service Mandate”
adopted by the Cantonal Parliament. Internal guidelines for implementation in the business
areas are formulated in the sustainability policy. Zürcher Kantonalbank publishes an annual
sustainability report, which contains detailed information on the fulfilment of its public service
mandate. Climate-related financial risks, which must be disclosed in accordance with FINMA
regulatory requirements, are part of sustainability risks. The disclosure report will be published
by the end of April 2025 at zkb.ch/disclosure. Section 1.10 of this report provides a summary
of climate-related financial risks.
1.5
Credit risks
1.5.1 Strategy, organisation and processes
The strategy applied in the management of credit risks is set out in the internal lending
policy. The strategy is revised and updated by the risk organisation as part of an annual, struc-
tured process and is approved by the Executive Board. The principles defined in the lending
policy include the measurement and management of risks based on uniform, binding objectives
and instruments, and the acceptance of risks based on objective, business-related criteria, in
proportion to the bank’s risk capacity, together with sustainable management of the quality of
the credit portfolio.
The bank adopts a risk and cost-based pricing policy, with transparent credit decisions and
a selective, quality-oriented strategy for the acquisition of financing business. Particular attention
is paid to environmental and social risks in the credit assessment process. In recognition of the
total commitment of owners, higher risks may deliberately be accepted on occasion for SMEs
from the Greater Zurich Area.
The preventative risk management and risk control functions are separated from risk
management at Executive Board level. Preventative risk management issues lending guidelines,
analyses and reviews transactions in line with existing delineations of power, monitors busi-
ness-related risks on an ongoing basis and assists in the training of risk managers. Risk control
monitors and reports at portfolio level and is responsible for defining risk measurement methods.
Credit risks are managed and limited by means of detailed parameters and areas of
responsibility within the credit process at individual exposure level and by means of limiting
the risk capital in accordance with the capital at risk approach at portfolio level. Another key
control element in credit risk management is risk-adjusted pricing, which includes expected
losses (standard risk costs) as well as the cost of the risk capital to be retained in order to cover
unexpected losses.
Expected losses are determined on the basis of the statistical probability of default (PD),
assumptions regarding the level of exposure at default (EAD) and the estimated loss given
159
Zürcher Kantonalbank Annual Report 2024
› Financial Report
default (LGD). Rating models specific to individual segments are used to determine default
probabilities. The rating system for private individuals, corporate clients and banks combines
statistical procedures with many years of practical experience in the lending business and in-
corporates both qualitative and quantitative elements. Country ratings are in principle based
on the ratings of external agencies (country ceiling ratings and sovereign default ratings).
A credit portfolio model is used as the basis for the modelling of unexpected losses.
Besides default probabilities, exposures in the event of default and loss rates, correlations be-
tween debtors are particularly significant for the modelling of unexpected losses. The model
covers balance-sheet and off-balance-sheet items. The valuation of collateral for loans, and in
particular the calculation of market and collateral values, is governed by an extensive set of
internal rules setting out the relevant methods, procedures and responsibilities. These rules are
continually reviewed and aligned with regulatory requirements and market changes. For the
valuation of mortgage collateral, the bank uses recognised estimation methods that are tailored
to the type of property. These include hedonic models, income capitalisation approaches and
expert appraisals, among others.
The models used as well as the individual valuations are reviewed on a regular basis. The
maximum loan-to-value ratio for mortgages depends on how realisable the collateral is and is
influenced by factors such as location and type of property (family home or commercial property,
for example). Readily marketable collateral (securities, precious metals, account balances, for
example) is generally valued at current market prices. The lending of readily marketable collateral
is subject to the deduction of specified margins. These margins differ primarily in terms of the
collateral’s susceptibility to fluctuations in value.
Credit exposures are restricted by limits. In addition to the limits at counterparty and
counterparty group level, limits are placed on sub-portfolios, for instance for foreign expo-
sures. All credit and contingent exposures are monitored on a daily basis, and exposures from
trading transactions are monitored on a real-time basis. In the case of trading transactions, pre-
deal checks can be undertaken to examine and ensure adherence to counterparty limits. Any
breaches of limits are reported promptly to the competent management level. An early-warning
system identifies negative developments, which are communicated to the officers responsible.
The rating of corporate clients is generally reviewed once a year on the basis of the annual
financial statements. A supplementary review of ratings, limits and exposures in the retail and
corporate client business is undertaken using risk-oriented criteria. Ratings, limits and exposures
in the banking sector are reviewed periodically and on an extraordinary basis in the event of a
deterioration in the credit rating of a particular institution.
Value adjustments
As part of their risk management role, the bank’s relationship management units con-
stantly monitor all positions in the credit portfolio to identify any signs of impairment of value.
Should any signs be found, a standardised impairment test is used to determine whether a loan
should be classed as impaired. Impaired loans are those where the borrower is unlikely to be
able to meet future obligations.
Where it appears that the bank will be unable to collect all amounts due on a claim, the
bank makes an allowance for the unsecured part of the loan, taking into account the borrower’s
creditworthiness. In determining the required value adjustment, mortgage collateral (including
valuation discounts, settlement and holding costs) and readily marketable collateral (freely trade-
able securities as well as other easily realised assets such as deposits, precious metals, fiduciary
investments, etc.) are considered at their current liquidation value. The recoverability of other
collateral (e. g. leased assets, guarantees) has to be demonstrated in particular. The authority to
approve the creation of new individual value adjustments rests with the risk managers. Above
a certain amount, the approval of the risk organisation is also required.
Interest and associated commission payments that have not been received in full 90 days
after becoming due are classified as past due. They are deemed to be impaired and are usually
fully adjusted if they are not covered by collateral. Individual value adjustment rates may ap-
ply to the principal in the case of major positions. Collective individual value adjustments are
recognised for overdrafts of up to CHF 30,000 and for interest and associated commission
160
Zürcher Kantonalbank Annual Report 2024
› Financial Report
payments outstanding for more than 90 days; in all other cases, individual value adjustments
are generally set aside.
In principle, a central, specialised unit fundamentally manages impaired positions across
all client segments. This unit steers the positions through the stabilisation, restructuring and
resolution process and ensures that existing value adjustments are regularly reviewed and ad-
justed where necessary.
The calculation of value adjustments and provisions for expected losses on exposures not
at risk of default is explained in the section “Accounting and valuation principles” on page 114.
Country risks
The country risk of individual exposures is determined on the basis of the risk domicile,
where this is not identical to the domicile of the borrower, in accordance with the Swiss Bankers
Association’s guidelines on the management of country risk. In the case of secured exposures,
the domicile of the collateral is taken into account when determining the risk domicile. The
risks for each country, total country risks and total country risks outside the bank’s best internal
rating category are subject to limits, adherence to which is monitored on a constant basis.
Settlement risks
A settlement risk arises in the case of transactions with mutual payment and delivery
obligations where Zürcher Kantonalbank must meet its obligations without being able to en-
sure that counter-payment is also being made. Settlement risk can occur in relation to foreign
exchange transactions, securities lending and borrowing (SLB) and OTC repo transactions as
well as transactions involving different payment systems and time zones in the interbank sector.
Zürcher Kantonalbank is a member of the joint venture CLS, a clearing centre for settling foreign
exchange transactions “payment against payment”. This helps largely eliminate the fulfilment
risks arising in foreign exchange trading.
Concentration risks
Zürcher Kantonalbank uses a systems-based method for monitoring concentration risks.
Besides measurement for the purpose of preparing regulatory reports, concentration risks are
limited at product and client level using benchmarks that are reflected in the corresponding
powers of authorisation. Internal concentration risk reporting includes information on product,
sector and individual position concentrations. Due to the bank’s roots within the Greater Zurich
Area, a large concentration risk in the credit portfolio takes the form of geographical concen-
tration risk in the mortgage portfolio.
1.5.2 Risk profile
The credit portfolio remained robust at the end of the year in view of the ongoing geo-
political conflicts, the change of governments in Europe and the threat of trade barriers from
the US (see also section 1.1.1).
161
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Credit exposure in the main sub-portfolios
The following sections provide information about the most important sub-portfolios of the
credit exposures in Zürcher Kantonalbank’s balance sheet.
Credit exposures by rating category
Default probability ratings are assigned internally on the basis of a scale from 1 to 19. Figure
6 shows the credit exposures broken down by counterparty credit rating, mapped to Standard &
Poor’s rating scale. There have been only minor changes compared with the previous year at the
level of the overall portfolio. Credit exposures in the non-investment categories (BB and below)
account for 6.0 percent of the volume (2023: 6.3 percent).
Credit exposures by client portfolio in CHF million
Figure 7 shows credit exposures classified in accordance with the bank’s internally
defined client portfolios. The volume of credit exposures increased by around CHF 6.3 billion
(4.4 percent) compared with the previous year. Credit exposures in relation to “private individ-
uals” consisted almost entirely of receivables secured by mortgages and represented 49 percent
(2023: 50 percent) of total credit exposures. The corporate clients portfolio consists of credit
exposures in relation to clients of a commercial nature (incl. real estate companies and co-
operative building associations). The share of this client group in total credit exposures was 26
percent (2023: 25 percent), 83 percent (2023: 82 percent) of which was secured by mortgages
or cash. In the “Banks and securities dealers” portfolio, the largest share of credit exposures in
volume terms, at 13 percent (2023: 13 percent), was in the form of collateralised transactions
such as reverse repo transactions. Other credit exposures in relation to banks arise as a result
of trading operations and from the international trade financing business. Insurance companies,
pension funds, financial holding companies, investment fund companies and similar companies
together constitute the “Financial sector excluding banks” portfolio, which accounted for a 7
percent share (2023: 6 percent). “Governments and public entities” – the smallest portfolio,
with a share of 4 percent of the volume of credit exposures – consists of positions with central
banks, central governments and public authorities and institutions.
Mortgage loans to private individuals
Real estate financing for private individuals is part of Zürcher Kantonalbank’s core busi-
ness. Almost two-thirds of these mortgage loans relate to owner-occupied residential property.
The remaining loans are secured with rented residential properties or properties that are used for
commercial purposes. Mortgage loans to private individuals increased by 2.9 percent in 2024.
The median gross loan-to-value ratio for all properties in the private individuals client portfolio
was 43.8 percent (2023: 44.1 percent).
Unsecured loans
Of the unsecured loans in the corporate clients portfolio (Figure 8), 80 percent (2023:
81 percent) are attributable to clients in the AAA to BBB (investment grade) rating categories,
with a higher year-on-year overall volume at CHF 6.5 billion (+ 1.7 percent). Figure 9 shows
the unsecured loans in the corporate clients portfolio broken down by industry. The top three
industries are still manufacturing, trade, and information & communication. In the “Banks and
securities traders” portfolio (Figure 10), the volume of unsecured loans at about CHF 2.99 billion
was slightly lower (– 2.0 percent) than at the end of 2023. The level of this exposure can change
significantly every day, unlike other forms of lending, due to the influence of the bank’s trading
transactions. The AAA to BBB (investment grade) rating categories accounted for 88 percent
(2023: 69 percent) of the unsecured exposures.
Impaired loans
Impaired loans amounted to CHF 516 million (2023: CHF 487 million). After deducting
the estimated liquidation value of collateral, this equals net debt of CHF 294 million (2023:
CHF 286 million, see also Note 2 to the balance sheet).
162
Zürcher Kantonalbank Annual Report 2024
› Financial Report
AAA
10 %
0 %
20 %
30 %
40 %
50 %
60 %
AA
A
BBB
BB
B
C
D
End of 2024
End of 2023
Private individuals
Companies
Banks and securities dealers
Financial sector excluding banks
Governments and public entities
secured 2024
unsecured 2024
secured 2023
unsecured 2023
20,000
0
40,000
80,000
60,000
Fig. 6: Credit exposures by rating category
Share as %
Fig. 7: Credit exposures by client portfolio in CHF million
in CHF million
163
Zürcher Kantonalbank Annual Report 2024
› Financial Report
AAA
AA
A
BBB
BB
B
C
D
End of 2024
End of 2023
2,000
0
4,000
6,000
Non-performing loans / receivables
The nominal value of non-performing loans amounted to CHF 147 million at the end
of the reporting period (2023: CHF 125 million). Loans are classified as non-performing when
interest, commission or amortisation payments or the repayment of the principal have not
been received in full 90 days after becoming due. This also includes claims against borrowers
in liquidation, and loans with special conditions arising from a borrower’s financial standing.
Non-performing loans are also often a component of impaired loans.
Value adjustments and provisions
The volume of individual value adjustments and provisions for default risks from impaired
loans and receivables increased by CHF 20 million to CHF 361 million in 2024 (see also Note 16
to the balance sheet). Forecast uncertainty in the medium and longer term remains elevated,
partly due to the continuing tense geopolitical situation. Accounting regulations require Zürcher
Kantonalbank to set up allowances and reserves for expected losses on non-impaired positions.
Due to the trend in various risk parameters, the position rose by CHF 24 million year on year to
CHF 505 million at the end of 2024.
Fig. 8: Unsecured credit exposures to corporate clients by rating category
in CHF million
164
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Manufacturing / production of goods
Trade / maintenance & repair of motor vehicles
Information & communication / land & housing /
scientific & tech. services
Financial and insurance services
Energy and water supply
Transport & storage
End of 2024
End of 2023
1,000
0
2,000
3,000
Building industry / construction
Health & social services
Agriculture, forestry and fishing
Arts, entertainment, recreation / other services
Hospitality / accommodation & catering
Other
Fig. 9: Unsecured credit exposures to corporate clients by industry
in CHF million
165
Zürcher Kantonalbank Annual Report 2024
› Financial Report
AAA
AA
A
BBB
BB
B
C
D
End of 2024
End of 2023
500
0
1,000
2,000
1,500
1.6
Market risk
1.6.1 Strategy, organisation and processes for the management of
market risks in the trading book
In the trading business, Zürcher Kantonalbank pursues a strategy focused on client trans-
actions. The individual desks hold trading mandates approved by the Risk Committee of the
Executive Board, which set out the basic conditions in terms of the objectives pursued, instru-
ments used for underlying and hedging transactions, the form of risk management, and the
holding period. The preventative risk management and risk control functions are separated from
risk management at Executive Board level. The responsibilities of the preventative risk manage-
ment function, which is independent of Trading, and the risk control function downstream of
it, include the monitoring of compliance with risk limits and trading mandates, the calculation
and analysis of the result from trading activities (P & L) and risk figures, as well as the preventative
analysis of potentially high-risk transactions. The risk organisation is also responsible for defining
and implementing methods of risk measurement, their independent validation, and internal and
external risk reporting.
Market risks are measured, managed and controlled on the one hand by assigning risk
capital in accordance with the capital at risk approach and on the other by using value at risk
limits. This is supplemented by the periodic performance of stress tests and by the monitoring of
market liquidity risks. The value of trading positions is determined using the fair value method,
whereby marking to market or marking to model, which is subject to stricter rules, is applied on
a daily basis. The “trading market risks” capital at risk corresponds to the assigned risk capital
for the market risks of trading transactions on a one-year horizon and at a confidence level of
99.9 percent.
Fig. 10: Unsecured credit exposures to banks and securities traders by rating category
in CHF million
166
Zürcher Kantonalbank Annual Report 2024
› Financial Report
The modelling is based on a stressed value at risk (stressed VaR). Besides general market risks,
the model also takes into account issuer default risks. Zürcher Kantonalbank calculates value at
risk for a 10-day period and at a confidence level of 99 percent using a Monte Carlo simulation.
The loss distribution is arrived at from the valuation of the portfolio using a large number of
scenarios (full valuation). The necessary parameters for determining the scenarios are estimated
on the basis of historical market data, with more recent observations being accorded a higher
weighting for the forecasting of volatility than less recent ones. As a result, value at risk re-
sponds rapidly to any changes in volatility on the markets. Value at risk is calculated on a daily
basis for the entire trading book. The four groups of risk factors – commodities, currencies,
interest rates and equities – are calculated and shown both separately and on a combined basis
(Figure 11). The bank uses different types of scenarios for stress-testing. A distinction is made
between scenarios relevant to benchmarks and pure analysis scenarios. Scenarios relevant to
benchmarks are historical and hypothetical scenarios that are used to estimate the loss that
could result from extreme but plausible macroeconomic stress events. Each one is based on
the expected development of market indicators for the corresponding scenario. In this way
the bank can identify potential vulnerabilities and risk concentrations, analyse them better and
then take action.
The additional analysis scenarios used in market risk monitoring do not have a limiting
function, in contrast to the scenarios relevant for benchmarks. These scenarios are used solely
for risk analysis in that their focus is on individual risk factors (e. g. interest rates), which helps
to illuminate the risk profile from different perspectives.
The bank additionally monitors the market liquidity risk of individual portfolios. In the
equity derivatives sector, the potential trading volume resulting from the hedging strategy in the
event of a change in the key risk factors is compared with the total market volume. Hypothet-
ical offsetting expenses are calculated for bonds and bond-type products, based on observed
bid-ask spreads and taking into account additional price premiums / discounts. The positions
are examined regularly to ensure there is sufficient liquidity; if necessary, valuation reserves are
recognised, causing a reduction in core capital in the context of capital adequacy.
The bank performs daily back-testing for the purpose of examining the forecast accuracy
of the value at risk. Back-testing is based on a comparison of the value at risk for a holding
period of one day with the back-testing result. If the number of breaches exceeds expectations,
the reasons for the imprecise estimates of the risk aggregation model are investigated. The
market risk model is validated on a regular basis. In addition, risks not modelled in the value at
risk are periodically analysed in a separate process and monitored with regard to materiality.
Fig. 11: Market risks in the group trading book
Risks including volatility risks
in CHF million
Commodi-
ties 1
Currencies
Interest
rates
Equities
Diversification
Modelled
total risk
Total risk 2
› Risks based on the model approach (value at risk with 10-day holding period)
As at 31.12.2024
0
0
7
3
–4
7
10
Average in year 2024
0
1
10
3
–5
9
12
Maximum
2
3
15
12
–12
14
17
Minimum
0
0
6
1
–3
5
8
As at 31.12.2023
0
0
11
2
–4
10
14
1
Incl. precious metals.
2
Sum of modelled total risk and risk premium for trading products not fully modelled.
167
Zürcher Kantonalbank Annual Report 2024
› Financial Report
0.3
0.2
Currency risk
Commodity risk
Equity risk
Diversification effect
Interest rate risk
7.3
7.2
Total value at risk
3.2
– 3.9
Fig. 12: Components of value at risk as at 31.12.2024
in CHF million
Fig. 13: Comparison of back-testing results 1 and value at risk
in CHF million
Backtesting P & L trading book
1-day value at risk
First quarter 2024
Second quarter 2024
Fourth quarter 2024
Third quarter 2024
0
5
– 5
10
15
20
–10
–15
– 20
1
The back-testing result corresponds to the trading income used and adjusted for the purpose of methodological reviewing of the quality of
the risk model.
168
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Risk profile
At CHF 12 million, the annual average value at risk (VaR) including the risk premium
for trading products not fully modelled was lower in 2024 than the figure at the end of 2023
(Figure 11). The short-term turmoil on the financial markets led to increased equity market vol-
atility at the beginning of August 2024, resulting in temporarily more volatile and higher VaR
values. VaR subsequently declined overall in line with the market recovery, and with interest
rate volatility as the main driver of VaR momentum. Interest rate risks continue to dominate in
the composition of value at risk, although equity risk was up on the previous year (Figure 12).
Back-testing results
The quality of the value at risk approach used is assessed by comparing the value at risk
for a holding period of one day with the daily back-testing result (Figure 13). In the case of
a one-day holding period and 99-percent quantile, the value at risk is expected to be exceeded
two to three times each year. This occurs when a daily loss in trading is higher than the model
predicts. The number of negative backtesting exceptions within a time window of around
250 business days was two at the end of the year. The total number of exceptions is therefore
lower than the previous year’s figure of three, but within statistical expectations.
1.6.2 Strategy, organisation and processes for the management of
market risks in the banking book
1.6.2.1 Interest rate risks in the balance sheet
Strategy, organisation and processes
In managing the banking book, Zürcher Kantonalbank pursues a strategy focused on
medium-term optimisation of net interest income. The interest rate risk is managed based on
the market interest method. For client deposits and loans with a variable interest rate, the in-
terest rate risk is determined by taking into account the bank’s anticipated future rate-setting
behaviour and client behaviour, and is reviewed at least once a year.
The interest rate risk in the banking book is managed in strategic terms by the Board of
Directors and in tactical terms by the CFO and Treasury. The strategic interest rate risk position
is set by the Board of Directors on a periodic basis in the form of an investment strategy for
equity (equity benchmark). The CFO and Treasury manage the deviation of the interest rate
risk position in the banking book from the equity benchmark within the risk limits set by the
Board of Directors. The Risk unit is responsible for the measurement and monitoring of risk as
well as independent reporting on interest rate risk. Variable products play a central role in the
management of interest rate risks. Banking book products without defined interest rates and
capital commitment are variable products. These include primarily savings and transaction ac-
counts. These products are modelled by replicating these variable products through synthetic
products with defined fixed interest rates on the basis of econometric analyses and expert-based
estimates. A key component of this modelling approach is the definition of a “floor”, which
can be considered a non-interest-rate-sensitive partial volume in terms of capital commitment.
The duration of the replication of the floor is determined by the assumed setting of conditions
in the event of interest rate changes. The model is updated and validated every year and is
approved by the Risk Committee of the Executive Board on an annual basis. Interest rate risk
management takes account of the present value as well as earnings prospects. From the present
value perspective, interest rate risks are managed by allocating risk capital in accordance with
the capital at risk approach (risk horizon of one year, confidence level of 99.9 percent) and by
applying value at risk limits (holding period of 20 trading days, confidence level of 99 percent).
In addition, stress scenarios are simulated in the present value perspective in order to analyse
and limit the impact of extraordinary changes in the interest rate environment.
From the prospective earnings perspective, stress tests provide an indication of the struc-
tural contribution in the event of extraordinary changes in market interest rates with unchanged
positioning over a one-year period. Besides the structural contribution, margin effects are par-
ticularly significant for client deposits with variable interest rates. Additional monitoring tools
allow such margin effects to be analysed for different interest rate scenarios over a period of
several years.
169
Zürcher Kantonalbank Annual Report 2024
› Financial Report
in CHF 1,000
Basis point sensitivity 2
up to 12 months
1 to 5 years
over 5 years
Total
Underlying transaction
– 631
3,063
8,691
11,123
Hedge
410
– 611
– 2,333
– 2,534
Total as at 31.12.2024
– 221
2,452
6,358
8,588
Total as at 31.12.2023
– 334
1,854
7,215
8,735
in CHF million
31.12.2024
31.12.2023
Change
(i) Upward parallel shift
– 1,179
– 1,239
60
(ii) Downward parallel shift
1,337
1,399
– 62
(iii) Steepener shock
– 503
– 504
1
(iv) Flattener shock
277
266
11
(v) Upward shock of short-term interest rates
– 186
– 219
33
(vi) Downward shock of short-term interest rates
190
224
– 34
Tier 1 capital (T1)
15,689
14,942
747
Ratio of largest present value loss to Tier 1 capital (T1)
in %
7.5 %
8.3 %
– 0.8 %
1
The figures in this section relate to the parent company because the interest rate risks of the subsidiaries are not material for the group
(based on margin no. 3 of FINMA Circular 2019 / 2).
2
Basis point sensitivity is measured as a cash value gain / loss when the interest rate in the maturity band concerned falls by one basis point (bp).
One basis point equals 0.01 percentage points.
Fig. 14: Interest rate sensitivity of the banking book CHF
Risk profile 1
The maturity-dependent sensitivity data shown in Figure 14 indicate the change in value
in Swiss francs when interest rates for each maturity band fall by one basis point (0.01 per-
centage points). The client deposits contained in the underlying transaction are represented
via replicating portfolios with an average maturity of 22 months. The interest rate exposure of
the underlying transaction increased year on year due to robust mortgage growth and a client
preference for fixed-rate mortgages. As the Treasury continuously hedged the rising interest rate
exposure with payer swaps, the interest rate sensitivity of the banking book as at 31 December
2024, at CHF 8.6 million per basis point, was 2 percent below the previous year’s level.
The interest rate exposure serves as a strategic hedge against Swiss franc interest rates
falling in future as well as to stabilise interest income. In the event of falling interest rates, a
higher structural contribution partially compensates for the gradual decline in liability margins.
The euro and US dollar interest rate exposures were almost fully hedged as at the end of
2024.The present value losses in the regulatory interest rate shock scenarios, as shown in
Figure 15, illustrate the development of interest rate risk. In the worst-case scenario in Swiss francs,
a parallel interest rate shock of 150 basis points upwards results in a present value loss of
CHF 1,179 million, which is CHF 60 million less than last year.
1.6.2.2 Risks in the investment portfolio
The risks in the investment portfolio comprise issuer risks on debt and equity securities in
financial investments, participations and real estate price risks. Interest rate risks are managed
and limited as part of asset and liability management.
Fig. 15: Present value stress results of the standardised interest rate shock
170
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Strategy, organisation and processes
The investment portfolio mainly has an operational background: The debt securities in
the financial assets are part of the bank’s liquidity buffer. The investments relate in particular to
companies in the financial market infrastructure.
In addition, Zürcher Kantonalbank provides start-up financing to promote young com-
panies. The real estate position consists almost entirely of property in use by the bank. The
purchase of financial investments and real estate as well as the acquisition of participations are
subject to detailed regulations and responsibilities. The investment strategy for the financial
investments managed by Treasury is laid down in the risk tolerance requirements approved by
the Risk Committee of the Executive Board. Only debt securities with a first-class credit rating
that are considered high-quality liquid assets (HQLA) may be purchased. There are investment
guidelines with rules on climate-related financial risks in Zürcher Kantonalbank’s sustainability
policy. Financial investments by Treasury must now meet not only exclusion criteria for issuers
from critical industries, but also requirements regarding their carbon footprint (CO2 emissions
relative to revenue). The Risk unit is responsible for the measurement and monitoring of risk as
well as independent reporting on investment portfolio risks.
Risks relating to the investment portfolio are managed internally by assigning risk capital.
For the determination of this risk capital for financial investments and participations, Zürcher
Kantonalbank uses an internal default model that takes diversification effects into account.
For real estate owned by the bank, risk capital is allocated based on regulatory minimum
capital adequacy requirements.
Risk profile
The carrying amount of financial investments was CHF 5.2 billion as at 31 December
2024 (2023: CHF 5.6 billion). Of this, CHF 4.7 billion (2023: CHF 5.3 billion) related to debt
securities. The portfolio consists mainly of mortgage bonds and first-class bonds, which are
diversified in terms of counterparty groups and countries. At CHF 0.5 billion in total, equi-
ty instruments, precious metals and real estate are insignificant in the overall context. The
presentation of financial investments and participations can be found in Notes 5 and 6 to the
balance sheet.
1.7
Operational risks
1.7.1 Strategy, organisation and processes
The objective of Zürcher Kantonalbank’s management of operational risk is the risk-orient-
ed protection of people, information, services and assets, and the maintenance and restoration
of critical business functions in an operational emergency. The management of operational
risk is therefore an essential part, ensuring that the canton, clients, partners, public and regulator
have confidence in the bank. The assessment of operational risks takes account of both direct
financial losses and the consequences of a loss of client confidence and reputation.
The corresponding risk inventory constitutes the basis for the management of operational
risks. Besides periodic and systematic assessments, operational risks are assessed, managed
and monitored on an event-driven basis as well. Operational risks are divided into six topics:
cyber risks, other external tort risks, internal tort risks, expert and model risks, process risks,
and environmental and accident risks.
The risk organisation reviews the management of operational risks in an annual structured
process. The principles governing the management of operational risks require, among other
things, that operational risks are measured and managed based on uniform, binding objec-
tives, and that they are accepted and controlled sustainably in a reasonable relationship to the
bank’s risk capacity. The Risk unit specifies the processes and methods, and provides tools for
monitoring the internal control system.
The measurement of operational risks is based on an estimate of potential claims and
the probability of occurrence. To calculate the operational residual risks, inherent risks are set
against existing risk-mitigating measures. If the residual risks exceed the risk tolerance, additional
risk-mitigating measures are defined and implemented. The adequacy and effectiveness of the
risk-mitigating measures are monitored as part of the bank-wide internal control system (ICS).
171
Zürcher Kantonalbank Annual Report 2024
› Financial Report
An appropriate and effective ICS plays an important part in ensuring that losses from operational
risks remain low.
1.7.2 Risk profile
The bank’s risk profile for operational risks did not change fundamentally compared with
the previous year. In principle, the measures taken and planned to manage the operational risk
profile are appropriate.
As society and the economy continue to become digitally connected and outsourcing
arrangements increase in number and complexity, external and internal process and cyber risks
remain high. Cyber and process risks remain the two OpRisk topics with the greatest residual
risk for the bank. The management of these risks therefore continues to receive a high degree
of attention.
The bank is addressing the challenging environment and dynamics related to cyber risks by
taking various risk mitigation measures. The need to implement additional measures is evaluated
on an ongoing basis. Their implementation is based on structured planning. This ensures that
the bank’s security posture takes into account the requirements of increasing interconnectedness
and that the relevant dimensions (identification, protection, detection, response and recovery)
are managed. Employees are continuously trained to make them aware of cyber risks and thus
to establish and promote a cyber risk culture in the bank.
Risk management of process risks is primarily performed by the process owners. In addi-
tion, preventative risk management and the Risk unit prepare risk assessments of the process
chains in an end-to-end process context. When doing so, special attention is paid to the inter-
faces in the process flows and operational resilience is taken into account. Where possible and
reasonable, execution errors are avoided by using control activities focused on anomaly detec-
tion. The plans for resuming normal operations of critical business processes in the event of an
operational crisis (business continuity plans) are regularly reviewed and tested during emergency
exercises. The critical business processes according to the business impact analysis as well as the
business continuity plans are part of Zürcher Kantonalbank’s business continuity management
(BCM) as implemented in accordance with regulatory requirements. The implementation work
to ensure operational resilience is carried out in accordance with regulatory requirements.
1.8
Liquidity and refinancing risks
1.8.1 Strategy, organisation and processes
The Treasury organisational unit, which reports to the CFO, is responsible for managing the
liquidity risks and refinancing of Zürcher Kantonalbank. Treasury delegates operational liquidity
management to the Money Trading unit, which ensures the efficient use of liquidity based on
internal and regulatory rules. In line with the requirements of the bank’s risk policy, the Board
of Directors defines the liquidity risk tolerance. The risk organisation oversees compliance with
the rules and reports to the Board of Directors in this regard on a regular basis.
The measurement, management and control of short-term liquidity risks are based on
both an internal model and on the liquidity coverage ratio (LCR), a regulatory liquidity indicator.
The special provisions for systemically important banks set out in the Liquidity Ordinance (TBTF
requirements) came into force in 2024. Over a 90-day stress or restructuring horizon, the TBTF
requirements set both basic requirements and additional institution-specific requirements so a
minimum level of liquidity is still available on day 90. In addition to the regulatory stress scenario,
Zürcher Kantonalbank uses internal stress scenarios based on the liquidity risk measurement
system (LRS). The result of the liquidity risk measurement under the internal bank-specific
stress scenario is calculated daily. This result is presented in a fully automated report. It contains
information on the availability of liquid assets and unencumbered high-quality liquid assets
(HQLA) in financial investments and trading positions, liquidity inflows and outflows under the
stress scenario, and the liquidity position left after the stress scenario. The emergency plan also
constitutes a significant element of liquidity risk management. This supports the situationally
appropriate conduct of the relevant functions in a crisis. When calculating the regulatory LCR,
the bank uses an internal model to divide wholesale deposits into operational and non-opera-
tional categories. Net outflows of funds from the collateralisation of derivatives due to changes
172
Zürcher Kantonalbank Annual Report 2024
› Financial Report
in market values are calculated using the look-back method. Besides Swiss francs, which make up
by far the largest part of the balance sheet of Zürcher Kantonalbank, the LCR is also monitored
and periodically reported in other major currencies. Zürcher Kantonalbank pursues a long-term
refinancing policy that includes both cost and risk aspects. Refinancing risks are managed via
diversification in terms of maturities, refinancing instruments used and related markets. This
diversification limits dependence on funding sources. For this purpose, Treasury uses both short-
and long-term instruments, which are placed on the domestic and international markets. The
diversified refinancing base is reflected in a broad product portfolio, comprising client deposits,
bank deposits and money and capital market refinancing. In addition, the regulatory net stable
funding ratio (NSFR) is used to measure, manage and control structural liquidity.
1.8.2 Risk profile
The average LCR for 2024, which is calculated as a simple average of the end-of-day
values of the business days during the quarter under review, lies between 142 percent and
154 percent. The bank was comfortably in compliance with the special liquidity requirements
for systemically important banks, which were introduced gradually in 2024. High-quality liquid
assets (HQLA) average between CHF 51.0 billion and CHF 53.2 billion.
The HQLA consist of Level 1 assets (cash, central bank deposits, tradeable securities from
countries and central banks with high credit ratings) and Level 2 assets (tradeable securities with
less strict criteria). The majority of Level 1 assets are held in the form of central bank deposits.
Zürcher Kantonalbank actively manages its liquidity risk profile, particularly through targeted
management of time deposits, money market securities as well as SLB and repo transactions.
The changes in the LCR and the internal statistical measures of liquidity risk are mainly driven
by portfolio changes in non-operational sight deposits, time deposits, money market securities,
as well as SLB and repo transactions with banks and major clients.
The quarter-end NSFR values ranged from 116 percent to 119 percent in 2024. The re-
quired stable funding ranges between CHF 100.9 billion and CHF 104.1 billion. The available
stable funding is between CHF 118.5 billion and CHF 121.2 billion.
Figure 16 shows a year-on-year comparison of the coverage ratio for asset-side client
transactions. Loans to clients amounted to CHF 118.2 billion and client funds to CHF 107.2
billion as at 31 December 2024. This results in a coverage ratio of 90.7 percent.
1.9
Compliance and legal risks
1.9.1 Processes and methods
The risk management instruments used to manage compliance and legal risks include
information on the relevant legal frameworks, internal legal advice, training and education of
employees, the implementation of ordinances through internal bank directives, and the embed-
ding of compliance and legal requirements into the bank’s internal processes. They also include
monitoring and controlling, investigations and clarifications in the event of violation of the rules,
as well as the conducting and overseeing of civil, criminal and administrative proceedings. The
Compliance function maintains a bank-wide compliance risk inventory, which is reviewed an-
nually to ensure it is up to date. It defines the risk management tools for compliance risks and
supports the preventative management of compliance risks on a case-by-case basis. To fulfil its
role, the Compliance function has unlimited rights of information, access and inspection.
1.9.2 Risk profile
The regulatory and legal framework for Zürcher Kantonalbank remained demanding in
the reporting period and has evolved in several respects, not least in terms of investor protec-
tion and handling data. At the same time, regulation in the area of sustainability continued to
increase. Corresponding investigation and implementation work was likewise a priority of the
bank’s work to manage compliance and legal risks. The new anti-money laundering regulations
also required additional analyses and clarifications in the year under review regarding their
implementation. Ongoing efforts continued to be required to combat money laundering and
implement sanctions, in particular the comprehensive economic sanctions in connection with
the situation in Ukraine. In addition, the modernisation of various technical risk management
173
Zürcher Kantonalbank Annual Report 2024
› Financial Report
tools for combating money laundering was driven forward. The Covid-19 pandemic also contin-
ued to have an impact on the compliance function and once more led to significant additional
work in the fight against abuse and money laundering. When performing the aforementioned
compliance risk inventory, Zürcher Kantonalbank still continuously assesses not only the issues
mentioned above, but also all its legal and regulatory risks and, where necessary, takes the
appropriate risk provisioning measures.
End of 2024
End of 2023
Client funds
Loans to clients
Client funds
Loans to clients
coverage ratio:
90.7 %
coverage ratio:
90.7 %
50
60
120
110
100
90
80
70
Fig. 16: Coverage ratio of client business
in CHF billion
174
Zürcher Kantonalbank Annual Report 2024
› Financial Report
1.10 Climate-related financial risks
Zürcher Kantonalbank is disclosing its climate-related financial risks for the 2024 financial
year, thereby taking into account the enhanced requirements of FINMA’s Disclosure Circular
for systemically important banks. Climate protection has long been a central issue for Zürcher
Kantonalbank. The bank has underscored this commitment by joining the Net-Zero Banking
Alliance. Zürcher Kantonalbank will publish the detailed information together with the other
elements of its disclosures on capital and liquidity as of the end of April 2025 at zkb.ch/disclo-
sure. The following sections summarise some key components of the disclosure information.
Climate-related financial risks are divided into physical risks and transition risks. Physical
risks result both from extreme weather events and their consequences (for example, flood
damage) and from chronic changes in climatic conditions (for example, rising temperatures).
Transition risks arise from the shift to a low-carbon economy. Transition risks include political /
legal / regulatory risks, risks from technological change, risks from changing client and investor
preferences, and reputation risks.
1.10.1 Strategy, organisation and processes
Risk management’s integrated approach to addressing climate-related financial risks as
part of sustainability risks contributes to the long-term protection of client assets and the
bank’s assets. Zürcher Kantonalbank’s broad commitment to the various areas of sustainability,
including climate protection, is based on its statutory public service mandate. Zürcher Kanton-
albank’s group strategy calls for the bank to shape sustainability issues actively, to lead the way
in sustainable offerings and to support clients on their journey to a more sustainable future.
Zürcher Kantonalbank aims to minimise climate risks across its entire business operations and to
establish transparency in this regard. The bank follows the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD). The climate goals are based on the goals of the
Paris Agreement and on achieving greenhouse gas neutrality by 2050. Zürcher Kantonalbank
sets itself quantitative climate targets in line with the Net-Zero Banking Alliance (NZBA) for the
bank as a whole and the Net Zero Asset Managers Initiative (NZAM) for Asset Management,
and reports on them transparently.
The Board of Directors, in its capacity as the bank’s governing body, defines the group
mission statement and the group strategy. The Chairperson’s Committee is assisted in fulfilling
its responsibilities related to the public service mandate by a specialist unit and a specialist body,
which is chaired by the CEO and is made up of leaders from all business units. This specialist
body, which is coordinated by the officer responsible for the public service mandate, advises
and supports the Chairperson’s Committee, the Board of Directors and the Executive Board in
all matters relating to the public service mandate.
The Executive Board determines the sustainability policy, which specifies the bank’s goals
and is also disclosed externally in several ways, including on the bank’s homepage (www.zkb.
ch/sustainability). The sustainability policy summarises the areas of impact, defines the role of
Zürcher Kantonalbank and formulates the targets – specifically, goals and exclusions in line
with the dimensions of environment, society, and governance (ESG) – for implementation in
the various business areas.
The management of climate-related financial risks is an integral part of Zürcher Kantonal
bank’s risk management processes.
Sustainability aspects are taken into account in risk identification and assessment, and –
if material – also in risk control, management, monitoring and reporting on the respective risk
category. Elements that are particularly relevant to climate risk in the risk management processes
are:
– OpRisk management in banking operations with the goals for achieving operational
ecology as set out in the bank’s environmental programme (reduce and offset the
carbon footprint), and business continuity management for action in the event of
natural disasters.
– Credit risk management in the financing business, where ESG criteria are an integral part
of the credit assessment process and specifications exist on excluded and undesirable
businesses, as well as regarding transactions with special climate risks.
175
Zürcher Kantonalbank Annual Report 2024
› Financial Report
– The management of market risks with climate-specific specifications for investments in
the portfolio of financial assets managed by Treasury.
– Risk management in the investment business.
Depending on the type of mandate selected, Investment Solutions’ standardised asset man-
agement and investment advisory mandates include the sustainability approaches “ESG Inte-
gration”, “Stewardship: Voting & Engagement”, “Avoiding Controversy”, “CO2e Reduction”
and “SDG-aligned Investing”. To assess sustainability, Zürcher Kantonalbank relies on data
from external data providers. “ESG Integration” refers to the systematic consideration of ESG
criteria in the investment process. Financially relevant ESG risks and opportunities of companies
and countries are systematically included in the analyses. The assessment is based on the ESG
rating, which the bank obtains from external data provider MSCI ESG Research LLC. In the
“Climate: CO2e Reduction” sustainability approach, the corresponding investment solutions
are based on the Paris Climate Agreement, which is associated with a reduction in greenhouse
gas emissions. Compliance with the sustainability approaches mentioned is monitored daily
as part of the risk management process. The results of these checks form an integral part of
internal risk management reporting and the internal risk dialogue between risk managers and
risk management. In its investment reports, Zürcher Kantonalbank transparently discloses the
ESG criteria of its client portfolios.
In the field of asset management, Zürcher Kantonalbank is one of the leading providers
of sustainable investment products in Switzerland with its products under the “Swisscanto
managed by Zürcher Kantonalbank” brand. The Paris climate goal is a binding requirement
for most actively managed investment funds in traditional asset classes. In the products of the
“Responsible” product line, investment activities include, in addition to systematic integration
of ESG criteria and compliance with exclusion criteria, reduction in greenhouse gas emissions,
amongst other things. The “Sustainable” product line also meets additional, stricter sustainabil-
ity criteria. The product approval process ensures that the contractually stipulated sustainability
aspects of the products comply with legal requirements and can be subsequently monitored
by the bank’s investment and portfolio controlling function, which is independent of the asset
manager. Product approval as well as investment and product controlling are important ele-
ments to ensure compliance with contractually agreed sustainability standards and thus reduce
so-called greenwashing risks. The degree of achievement of the product-specific greenhouse
gas reduction target and the Swisscanto Sustainability Rating are part of the publicly available
sustainability reports for investment funds. In addition, the Risk unit uses sustainability stress
tests in its measurement, monitoring and reporting.
1.10.2 Risk profile
Climate protection is a central theme in Zürcher Kantonalbank’s sustainability mandate.
Climate-related financial risks influence the risk profile, however not materially, and they are
not among the top risks. Figure 17 summarises the risk assessment of climate-related financial
risks as carried out by the Risk Committee of the Executive Board after detailed discussion in
2024. The assessment is based on traditional risk categories; compliance risks from the invest-
ment business are included under business risks. The assessment is guided by the residual risks
in a baseline scenario in which the Paris climate targets are largely met and the transition to
a low-carbon economy occurs in an orderly fashion. In a stress scenario in which the limit on
temperature rise is clearly missed (hot-house-world scenario) or very drastic measures for the
transition to a low-carbon economy are imposed (disorderly scenario), the risk profile becomes
more pronounced, but remains moderate overall.
Due to the longer-term nature of climate change, no particular physical risks are expected
in the short term, which is why the assessment here starts in the medium term. The assessments
of transition risks are combined for the medium and long term.
176
Zürcher Kantonalbank Annual Report 2024
› Financial Report
= no risk
= high risk
Short term = time horizon up to 5 years, med. term to long term = 6 to 30 years
Risk profile in baseline scenario.
Accentuation in a stress scenario.
Operational risks: Banking operations
Credit risks: Financing business
Market risks: Trading and treasury
Business risks: Investment and asset management business
Category
Physical risks
Medium to long term
Short term
Medium to long term
Transition risks
For transition risks, the key drivers for the bank are climate legislation, changing client prefer-
ences, public perception and climate change itself. Areas that are potentially heavily affected
by this include:
– the investment business with the offering of products with CO2 reduction targets;
– the financing business, where future changes in legislation may impact the valuation of
collateral (including properties in the mortgage portfolio) and financing of companies
in climate-exposed sectors.
Physical climate risks are significantly less important for Zürcher Kantonalbank’s risk profile than
transition risks. Areas that are potentially affected by physical climate risks include:
– the mortgage portfolio: The value of individual properties in the mortgage portfolio
could be reduced, for example, as a result of flooding or landslides.
– banking operations: The accumulation of extreme weather events could impact bank
operations in a very adverse flooding scenario.
– the investment business: Loss of wealth due to substantial damage could have a neg-
ative impact on investment assets and thus the income base in the business area.
Exclusion criteria and financing conditions are applied in the financing business. The exclusion
criteria include project financing for coal mining, oil / gas extraction and fossil power plants
fuelled with coal or oil. The following exclusion criteria and conditions apply to commercial
loans:
– Commodity companies: These must demonstrate that they are aligning their business
model with the scientifically required net-zero target for 2050 (phase-out of thermal
coal by 2030 in OECD countries and by 2040 in non-OECD countries, in accordance with
the IEA’s net-zero roadmap) and at the same time are promoting commodities (through
extraction, processing, transport, storage, trading) that are necessary to implement the
energy transition.
– Energy producers: As a regionally anchored bank, Zürcher Kantonalbank generally
finances Swiss energy producers – which mainly produce renewable energy. Reserve
power plants fuelled by oil or gas are supported only to the extent that they are intended
by the Swiss government for national supply in the event of electricity shortages or if
they are back-up technologies fuelled by oil or gas for renewable energy producers.
The following exclusions apply in commodity trading finance (CTF): thermal coal, crude and
heavy oil, bitumen / asphalt, asbestos, uranium, precious woods, live goods, diamonds, rare-earth
elements, perishable goods and non-certified palm oil. In the case of commodity trading clients,
the bank systematically reviews sector-specific ESG risks and opportunities during onboarding
as part of due diligence and on an annual basis. This review is based on reported data or data
collected through the bank’s own questionnaires.
Fig. 17: Overview from the qualitative assessment of climate-related
financial risks
177
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Zürcher Kantonalbank is guided by the internationally established United Nations Environ-
ment Programme Finance Initiative (UNEP FI) and the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) on the disclosure of transition risks from credit
exposure to climate-sensitive and, as a subset thereof, carbon-related industries. TCFD defines
carbon-related as industries associated with the energy and utilities sectors, according to the
Global Industry Classification Standard, excluding water supply and renewable power genera-
tion. Zürcher Kantonalbank more comprehensively describes as climate-sensitive those indus-
tries that are exposed to higher transition risks due to their greenhouse gas emissions. Zürcher
Kantonalbank bases its delimitation on emission statistics and uses the Swiss or European
industry classification. The commodity trade finance (CTF) sub-portfolio is reported separately,
irrespective of the industry, and is subject to the aforementioned restrictions under the bank’s
sustainability policy.
Figure 18 shows the unsecured loans and advances in the corporate clients portfolio in
line with this classification. In terms of the total balance sheet exposure in this portfolio, at the
end of the year climate-sensitive sectors accounted for around 6.1 percent (2023: 7.8 percent).
This includes most of the energy sector, which, however, consists predominantly of financing
for sustainable energy sources. In addition to the components manufacturing and repair, the
automotive sector also includes, in particular, selling and financing vehicles. The transport sector
mainly includes passenger transport in the tourist sector and local transport as well as freight
transport by road.
In accordance with the aforementioned exclusion criteria in the sustainability policy,
Zürcher Kantonalbank does not provide project financing in the coking and petroleum refining
industry, which TCFD designates as carbon-related.
Fig. 18: Unsecured loans and advances in the corporate clients portfolio
by “climate-sensitive” and other industries
31.12.2024
31.12.2023
Balance sheet
exposure in
CHF million
as % of
unsecured
exposure
as % of
unsecured
exposure
as % of balance
sheet exposure
as % of balance
sheet exposure
› Industry designation
Mining / crushed rock and earth
8
0.1 %
0.0 %
0.0 %
Metal production / processing
9
0.1 %
0.0 %
0.0 %
Sewage and waste disposal and elimination of environmental pollution
56
0.9 %
0.1 %
0.2 %
Agriculture, hunting and related activities
87
1.3 %
0.2 %
0.3 %
Glass / ceramics / cement
88
1.4 %
0.2 %
0.4 %
Transport (incl. mountain railways, but excluding rail passenger transport
and goods trains)
259
4.0 %
0.7 %
0.6 %
Chemical products
419
6.4 %
1.1 %
0.9 %
Energy supply
424
6.5 %
1.1 %
1.2 %
Automotive
519
8.0 %
1.3 %
2.5 %
CTF (commodity trade finance)
529
8.1 %
1.3 %
1.7 %
Total climate-sensitive sectors
2,398
36.8 %
6.1 %
7.8 %
Total other sectors
4,114
63.2 %
10.4 %
9.9 %
Total corporate clients portfolio unsecured
6,512
100.0 %
16.5 %
17.7 %
Real estate financing
31,843
–
80.8 %
79.3 %
Other products
1,078
–
2.7 %
3.1 %
Total balance sheet exposure companies
39,433
–
100.0 %
36,247
178
Zürcher Kantonalbank Annual Report 2024
› Financial Report
m) Multi-year comparison
All figures in the multi-year comparison are based on the accounting rules for banks, securities firms, financial
groups and conglomerates.
2024
2023
2022
2021
2020
›Key figures
in %
Return on equity (RoE)
8.0
9.3
8.4
7.8
7.2
Cost / income ratio (CIR) 1
55.0
51.8
57.5
58.7
60.1 2
Common equity Tier 1 ratio (CET1) 3
16.8
17.4
16.8
17.0
17.4
Risk-based capital ratio (going concern) 3
17.9
18.7
18.2
18.5
18.9
Risk-based capital ratio (gone concern) 3
7.8
8.0
4.3
4.0
3.2
Risk-based TLAC ratio 3 / 4
25.7
26.8
22.5
22.5
22.1
Leverage ratio (going concern) 3
6.8
6.6
6.2
6.2
6.2
Leverage ratio (gone concern) 3
3.0
2.8
1.5
1.3
1.1
TLAC Leverage Ratio 3 / 4
9.8
9.4
7.7
7.5
7.3
Liquidity coverage ratio (LCR) 5
142
147
146
160
160
Net stable funding ratio (NSFR) 6
116
117
124
118
–
›Income statement
in CHF million
Net result from interest operations
1,680
1,821
1,403
1,248
1,218
Result from commission business and services
1,024
940
926
926
806
Result from trading activities and the fair value option
353
415
409
347
459
Other result from ordinary activities
32
19
15
24
29
Operating income
3,088
3,194
2,752
2,544
2,513
Operating expenses
– 1,731
– 1,679
– 1,594
– 1,517
– 1,580
Value adjustments on participations and depreciation and
amortisation of tangible fixed assets and intangible assets
– 72
– 75
– 101
– 104
– 117
Changes to provisions and other value adjustments
and losses
– 8
28
2
28
– 14
Operating result
1,277
1,469
1,059
951
801
Extraordinary result
12
1
8
0
25
Changes in reserves for general banking risks
–
– 225
–
–
46
Consolidated profit before taxes
1,289
1,246
1,067
951
873
Taxes
– 168
– 7
– 8
– 9
– 8
Consolidated profit
1,120
1,238
1,059
942
865
› Balance sheet
(before appropriation of profit)
in CHF million
Total assets
202,594
201,259
199,791
192,105
188,364
Mortgage loans
106,600
100,874
96,838
91,847
87,679
Amounts due in respect of customer deposits
106,980
101,452
103,351
96,777
92,582
Shareholders’ equity
14,862
14,268
13,299
12,674
12,650
1
Calculation: Cost / income ratio (excl. changes in default-related value adjustments and losses from interest operations).
2
Excludes the CHF 46 million non-recurring personnel expense related to the anniversary payment made to employees.
3
In accordance with the provisions for systemically important banks.
4
TLAC = Total Loss Absorbing Capacity
5
A simple average of the end-of-day values on business days during the quarter under review.
6
Effective since 1 July 2021.
179
Zürcher Kantonalbank Annual Report 2024
› Financial Report
2024
2023
2022
2021
2020
›Participation of the canton and
municipalities
in CHF million
Dividend to cover actual costs to the canton
21
18
11
11
11
Dividend for the canton
184
340
320
280
297 7
Dividend for municipalities
170
170
160
140
148 7
OECD minimum tax to the canton
156
–
–
–
–
Compensation for state guarantee
31
30
28
27
23
Total participation of the canton and
municipalities
562
558
519
458
479
›Additional services
in CHF million
Payments from public service mandate
140
161 8
140
141
126
›Further information
Number
Total customers’ assets
(managed assets and assets with custody services)
520,811
450,789
399,965
409,190
361,658
Headcount after adjustment for part-time employees,
as at the reporting date
5,779
5,539
5,249
5,145
5,180
Branches 9
53
53
53
57
60
›Rating agencies
Rating
Fitch
AAA
AAA
AAA
AAA
AAA
Moody’s
Aaa
Aaa
Aaa
Aaa
Aaa
Standard & Poor’s
AAA
AAA
AAA
AAA
AAA
7
Including special coronavirus dividend.
8
Includes CHF 25 million for the establishment of the ZKB Philanthropy Foundation.
9
Including branches of Zürcher Kantonalbank Österreich AG in Salzburg and Vienna.
180
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Ernst & Young Ltd
Maagplatz 1
P.O. Box
CH-8010 Zurich
Phone:
+41 58 286 31 11
www.ey.com/en_ch
Report of the statutory auditor to the Cantonal Parliament of Zurich
on our audit of the consolidated financial statements
as of 31 December 2024 of
Zürcher Kantonalbank, Zürich
Zurich, 27 February 2025
Report of the statutory auditor
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of Zürcher Kantonalbank and its
subsidiaries (the Group), which comprise the consolidated balance sheet as at 31 December
2024, the consolidated income statement, the consolidated statement of changes in equity
and the consolidated cash flow statement for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements (pages 104 to 177) give a true and fair
view of the consolidated financial position of the Group as at 31 December 2024 and of its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with the applicable financial reporting framework for banks and comply with
Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing
(SA-CH). Our responsibilities under those provisions and standards are further described in
the “Auditor's responsibilities for the audit of the consolidated financial statements” section of
our report. We are independent of the Group in accordance with the provisions of Swiss law
and the requirements of the Swiss audit profession, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the “Auditor's responsibilities for the audit of
the consolidated financial statements” section of our report, including in relation to these
matters. Accordingly, our audit included the performance of procedures designed to respond
181
Zürcher Kantonalbank Annual Report 2024
› Financial Report
to our assessment of the risks of material misstatement of the consolidated financial
statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the consolidated
financial statements.
Determination of value adjustments and provisions for default risks on
loans to clients
Area of
focus
Zürcher Kantonalbank discloses loans to clients, consisting of amounts
due from customers and mortgage loans, at nominal value less any
necessary value adjustments.
For default risks on impaired loans, individual value adjustments are
made. For default risks on non-impaired loans value adjustments and
provisions for expected losses are recognized.
For the measurement of value adjustments and provisions for default
risks, valuation models are used. In addition, this requires making
estimates and assumptions which, by definition, involve judgments and
may vary depending on the valuation.
As of 31 December 2024, Zürcher Kantonalbank discloses client loans
totaling CHF 118.2 billion. As of the balance sheet date, individual value
adjustments and provisions for impaired loans amounted to CHF 361.2
million and value adjustments and provisions for expected losses
amounted to CHF 505.1 million. With 58.4%, loans to clients represent a
material part of the assets of Zürcher Kantonalbank, and we consider the
determination of value adjustments and provisions for default risks on
loans to clients as a key audit matter.
The significant accounting principles for determining value adjustments
and provisions for default risks are described by Zürcher Kantonalbank
on pages 112 to 114, 118, 119 as well as on pages 158 to 165 of the
bank’s annual report. Furthermore, we refer to notes 2 and 16 on pages
122, 123 and 133 in the notes to the consolidated financial statements.
Our audit
response
We audited the processes and key controls in connection with granting
and monitoring loans as well as with regard to the methods for identifying
and determining individual value adjustments and provisions for default
risks on loans to clients. Moreover, we evaluated the concept for the
determination of value adjustments and provisions for expected losses.
Finally, we performed sample tests on the impairment of selected client
loans, and evaluated the compliance of significant accounting principles
as well as the appropriateness of the disclosures in the notes to the
consolidated financial statements.
Our audit procedures did not lead to any reservations concerning the
determination of value adjustments and provisions for default risks on
loans to clients.
182
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Fair value measurement of financial instruments
Area of
focus
Fair value is defined as the amount for which an asset is exchanged or a
liability settled between knowledgeable, willing parties in an arm’s length
transaction. This amount corresponds to the price requested in a price-
efficient and liquid market or, if this is missing, to the price determined on
the basis of a valuation model. Valuation models are significantly affected
by the assumptions that are used, including interest, forward and swap
rates, spread curves and the volatility and estimates of future cash flows.
There is a significant degree of judgment involved in making these
assumptions.
Zürcher Kantonalbank discloses financial instruments at fair value
measurement in different balance sheet items. As of 31 December 2024,
the fair value of positive replacement values of derivative financial
instruments amounts to CHF 2.7 billion, while that of the negative
replacement values amounts to CHF 1.0 billion. Furthermore, as of 31
December 2024, Zürcher Kantonalbank discloses liabilities from other
financial instruments at fair value measurement totaling CHF 4.4 billion
that were determined using a valuation model.
As a result of the scope of judgment and the significance of the listed
balance sheet items in the consolidated financial statements of Zürcher
Kantonalbank, the valuation of these items represents a key audit matter.
The corresponding accounting and valuation principles are described by
Zürcher Kantonalbank on pages 114, 115, 120 as well as on pages 165
to 170 of its annual report. Furthermore, we refer to notes 3, 4 and 14
on pages 123 to 125 and 131 in the notes to the consolidated financial
statements.
Our audit
response
We audited the processes and key controls with regard to fair value
measurement, validation and application of valuation models.
Moreover, we assessed the assumptions made in connection with the
valuation and their appropriateness on the basis of sample testing and
evaluated the measurement of financial instruments by means of
independent valuation models. On the basis of sample testing and a
comparison with third-party sources, we assessed the fair values used
and directly available from an active market. Moreover, we evaluated the
appropriateness of the disclosures in the notes to the consolidated
financial statements.
Our audit procedures did not lead to any reservations concerning the
fair value measurement of financial instruments.
183
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Other information
The Board of Directors is responsible for the other information. The other information
comprises the information included in the annual report, but does not include the
consolidated financial statements, the stand-alone financial statements and our auditor’s
reports thereon.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Board of Directors’ responsibilities for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial
statements, which give a true and fair view in accordance with the applicable financial
reporting framework for banks and the provisions of Swiss law, and for such internal control
as the Board of Directors determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern, and using the going concern basis of accounting unless the
Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss
law and SA-CH will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on EXPERTsuisse’s website at: https://www.expertsuisse.ch/en/audit-
report. This description forms an integral part of our report.
184
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Report on other legal and regulatory requirements
In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal
control system exists, which has been designed for the preparation of the consolidated
financial statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
Ernst & Young Ltd
Bruno Patusi
Bruno Taugner
Licensed audit expert
Licensed audit expert
(Auditor in charge)
185
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Financial statements
of the parent company
186
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Income statement
in CHF million
Notes
2024
2023
Change
Change
in %
›Result from interest operations
Interest and discount income
4,325
4,004
322
8.0
Interest and dividend income from financial investments
40
32
8
24.0
Interest expense
– 2,631
– 2,170
– 461
21.2
Gross result from interest operations
33
1,734
1,865
– 131
– 7.0
Changes in value adjustments for default risk and losses from
interest operations
– 57
– 49
– 8
16.1
Subtotal net result from interest operations
1,677
1,816
– 139
– 7.7
›Result from commission business
and services
Commission income from securities trading
and investment activities
874
798
76
9.5
Commission income from lending activities
77
72
5
7.1
Commission income from other services
115
127
– 12
– 9.5
Commission expense
– 171
– 150
– 22
14.5
Subtotal result from commission business
and services
894
847
47
5.6
›Result from trading activities
Result from trading activities
and the fair value option
32
336
383
– 47
– 12.2
›Other result from ordinary activities
Result from the disposal of financial investments
10
7
3
47.3
Income from participations
41
41
0
0.0
– of which, participations valued using the equity method
–
–
–
–
– of which, from other non-consolidated participations
–
–
–
–
Result from real estate
8
8
– 1
– 7.7
Other ordinary income
30
31
– 1
– 3.9
Other ordinary expenses
– 6
– 16
10
– 60.2
Subtotal other result from ordinary activities
82
71
11
15.2
Operating income
2,989
3,117
– 128
– 4.1
›Operating expenses
Personnel expenses
34
– 1,174
– 1,139
– 35
3.1
General and administrative expenses
35
– 486
– 481
– 5
1.0
Subtotal operating expenses
– 1,660
– 1,620
– 40
2.5
Value adjustments on participations and depreciation and
amortisation of tangible fixed assets and intangible assets
– 70
– 75
5
– 6.4
Changes to provisions and other value adjustments and losses
– 8
27
– 35
– 129.9
Operating result
1,252
1,450
– 198
– 13.7
Extraordinary income
36
18
4
15
404.6
Extraordinary expenses
36
– 0
–
– 0
–
Changes in reserves for general banking risks
36
–
– 225
225
– 100.0
Result of the period before taxes
1,270
1,229
41
3.4
Taxes
39
– 158
–
– 158
–
Result of the period
1,112
1,229
– 116
– 9.5
187
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Appropriation of profit
in CHF million
2024
2023
Change
Change in
%
Result of the period
1,112
1,229
– 116
– 9.5
Profit carried forward
4
4
1
26.6
Distributable profit
1,117
1,232
– 115
– 9.4
Appropriation of profit
Dividend paid to cover actual costs for the canton
21
18
3
17.4
Dividend for the canton
184
340
– 156
– 45.8
Dividend for the municipalities
170
170
–
0.0
Total profit distribution
375
528
– 153
– 28.9
Allocation to voluntary retained earnings reserve
740
700
40
5.7
Total profit retained
740
700
40
5.7
Profit carried forward
2
4
– 3
– 57.3
The profit distribution takes place on the basis of the provisions in § 26f of the Cantonal Banking Act on Zürcher Kantonalbank of 28 September 1997 in the version applicable
at the time, and has no direct link to the endowment capital.
The appropriation of profit was approved by the Board of Directors on 30 January 2025.
Approval of the annual financial statements by the Cantonal Parliament is scheduled for 25 May 2025.
Additional participation
in CHF million
2024
2023
Change
Change in
%
OECD minimum tax to the canton
156
–
156
100.0
Compensation for state guarantee to the canton
31
30
1
3.6
Total additional participation canton
187
30
157
520.2
Total participation canton und municipalities
562
558
4
0.7
188
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Balance sheet
in CHF million
Notes
2024
2023
Change
Change
in %
›Assets
Liquid assets
32,410
39,524
– 7,114
– 18.0
Amounts due from banks
3,382
3,387
– 5
– 0.2
Amounts due from securities financing transactions
1
25,349
25,740
– 390
– 1.5
Amounts due from clients
2
11,553
11,177
376
3.4
Mortgage loans
2
106,600
100,874
5,725
5.7
Trading portfolio assets
3
11,334
10,007
1,327
13.3
Positive replacement values of derivative financial instruments
4
2,802
1,060
1,742
164.3
Other financial instruments at fair value
3
–
–
–
–
Financial investments
5
5,197
5,558
– 361
– 6.5
Accrued income and prepaid expenses
565
691
– 126
– 18.2
Participations
468
458
9
2.0
Tangible fixed assets
494
531
– 37
– 6.9
Intangible assets
–
2
– 2
– 100.0
Other assets
10
398
519
– 121
– 23.3
Total assets
200,552
199,530
1,022
0.5
Total subordinated claims
333
292
41
14.0
– of which, subject to conversion and/or debt waiver
128
96
32
33.4
›Liabilities
Amounts due to banks
39,731
35,441
4,290
12.1
Liabilities from securities financing transactions
1
8,008
14,095
– 6,087
– 43.2
Amounts due in respect of customer deposits
106,791
101,409
5,382
5.3
Trading portfolio liabilities
3
2,862
3,224
– 363
– 11.2
Negative replacement values of derivative financial instruments
4
1,005
2,458
– 1,453
– 59.1
Liabilities from other financial instruments at fair value
3,14
2,550
2,288
262
11.5
Cash bonds
260
288
– 27
– 9.5
Certificate of deposits
50
632
– 582
– 92.1
Bond issues
10,994
10,547
447
4.2
Central mortgage institution loans
11,162
11,558
– 396
– 3.4
Accrued expenses and deferred income
1,269
1,353
– 83
– 6.1
Other liabilities
10
829
1,784
– 955
– 53.6
Provisions
16
177
175
2
1.4
Reserves for general banking risks
16
4,755
4,755
–
–
Bank’s capital
17,21
2,425
2,425
–
–
Statutory retained earnings reserve
21
1,213
1,213
–
–
Voluntary retained earnings reserve
21
5,354
4,654
700
15.0
Profit carried forward
21
4
4
1
26.6
Result of the period
21
1,112
1,229
– 116
– 9.5
Shareholders’ equity
21
14,863
14,279
585
4.1
Total liabilities
200,552
199,530
1,022
0.5
Total subordinated liabilities
3,346
3,035
311
10.2
– of which subject to conversion and/or debt waiver
3,346
3,035
311
10.2
›Off-balance-sheet transactions
Contingent liabilities
2
4,054
3,771
283
7.5
Irrevocable commitments
2
15,978
15,947
31
0.2
Obligations to pay up shares and make further contributions
2
349
353
– 5
– 1.3
Credit commitments
2
–
–
–
–
189
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Statement of changes in equity
in CHF millions
Bank’s capital
Statutory
retained
earnings
reserve
Reserves
for general
banking risks
Voluntary
retained
earnings
reserve and
profit
carried
forward
Result of
the period
Total
equity
›2023
Total equity as at 31.12.2022
2,425
1,213
4,530
4,105
1,044
13,316
Capital increase
–
–
–
–
–
–
Capital decrease
–
–
–
–
–
–
Other contributions /
other capital paid in
–
–
–
–
–
–
Capital costs of endowment capital
–
–
–
–
– 11
– 11
Allocation to the canton from
previous year’s profit
–
–
–
–
– 320
– 320
Allocation to municipalities from
previous year’s profit
–
–
–
–
– 160
– 160
Allocation to (transfers from) the
reserves for general banking risks
–
–
225
–
–
225
Allocation to (transfers from)
the Voluntary retained earnings
and profit carried forward
–
–
–
553
– 553
–
Result of the period
–
–
–
–
1,229
1,229
Total equity as at 31.12.2023
2,425
1,213
4,755
4,658
1,229
14,279
›2024
Total equity as at 31.12.2023
2,425
1,213
4,755
4,658
1,229
14,279
Capital increase
–
–
–
–
–
–
Capital decrease
–
–
–
–
–
–
Other contributions /
other capital paid in
–
–
–
–
–
–
Capital costs of endowment capital
–
–
–
–
– 18
– 18
Allocation to the canton from
previous year’s profit
–
–
–
–
– 340
– 340
Allocation to municipalities from
previous year’s profit
–
–
–
–
– 170
– 170
Allocation to (transfers from) the
reserves for general banking risks
–
–
–
–
–
–
Allocation to (transfers from)
the Voluntary retained earnings
and profit carried forward
–
–
–
701
– 701
–
Result of the period
–
–
–
–
1,112
1,112
Total equity as at 31.12.2024
2,425
1,213
4,755
5,358
1,112
14,863
190
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Under § 36 of the Swiss Ordinance on Banks and Savings Banks (BankO), institutions that draw
up consolidated financial statements are exempt from disclosing certain information in the
individual financial statements. For reasons of clarity, the same numbering has been used for
the required tables as in the consolidated financial statements. The portrait details, explana-
tions relating to risk management, identification of default risks and definition of the need for
value adjustments, valuation of coverage and details of business policy on the use of derivative
financial instruments as well as on the use of hedge accounting in the group also apply to the
parent company. This is also the case for material events occurring after the balance sheet date.
Accounting and valuation principles
Accounting, valuation and reporting are based on the provisions of the Code of Obliga-
tions and Swiss banking law, the accounting rules for banks, securities firms, financial groups
and conglomerates according to the Accounting Ordinance (RelV-FINMA) and FINMA Circular
2020 / 1 as well as the Cantonal Banking Act on Zürcher Kantonalbank (Zürcher Kantonalbank
Act) in the version in force at the time and the regulations based on it. The statutory financial
statements of the parent company are prepared in compliance with the provisions of § 25 section
1 a) Banking Ordinance (“Reliable assessment statutory single-entity financial statements”).
They are generally based on the accounting and valuation principles of the group and
changes made to them during the financial year, with the following exceptions: In the statutory
single-entity financial statements, all participations are recognised at the lower of cost or market.
Goodwill from acquisitions is included under participations. The reserves for general banking
risks are shown as a separate item in the balance sheet. At group level, retained earnings re-
serves include reserves for general banking risks created before 2018.
Notes to the financial
statements of
the parent company
191
Zürcher Kantonalbank Annual Report 2024
› Financial Report
i) Information on the balance sheet
1
Breakdown of securities financing transactions
in CHF million
2024
2023
Book value of receivables from cash collateral delivered in connection with securities borrowing
and reverse repurchase transactions
25,349
25,740
Book value of obligations from cash collateral received in connection with securities lending
and repurchase transactions
8,008
14,095
Book value of securities lent in connection with securities lending or delivered as collateral
in connection with securities borrowing as well as securities in own portfolio transferred in
connection with repurchase agreements
4,162
4,262
– of which, with unrestricted right to resell or pledge
4,162
4,262
Fair value of securities received and serving as collateral in connection with securities lending or
securities borrowed in connection with securities borrowing as well as securities received in connection
with reverse repurchase agreements with an unrestricted right to resell or repledge
72,700
62,711
– of which, repledged securities
8,506
6,506
– of which, resold securities
43,746
41,384
2
Overview of collateral for loans / receivables and off-balance-sheet transactions,
as well as impaired loans / receivables
Overview by collateral
Type of collateral
in CHF million
Mortgage
collateral
Other
collateral
Unsecured
Total
›Loans (before netting with value adjustments)
Amounts due from customers
24
2,055
9,749
11,827
Mortgage loans
– Residential property
86,995
7
8
87,011
– Office and business premises
13,466
–
5
13,471
– Commercial and industrial premises
2,648
0
18
2,666
– Other
3,866
–
4
3,870
Total mortgage loans
106,975
7
35
107,017
Total loans 2024 (before netting with value adjustments)
106,999
2,062
9,784
118,845
Total loans 2023 (before netting with value adjustments)
101,254
1,867
9,580
112,701
Total loans 2024 (after netting with value adjustments)
106,616
2,059
9,477
118,152
Total loans 2023 (after netting with value adjustments)
100,891
1,863
9,297
112,051
›Off-balance-sheet
Contingent liabilities
39
275
3,741
4,054
Irrevocable commitments
3,637
233
12,108
15,978
Obligations to pay up shares and make further contributions
–
–
349
349
Credit commitments
–
–
–
–
Total off-balance-sheet transactions 2024
3,676
508
16,197
20,381
Total off-balance-sheet transactions 2023
3,203
484
16,384
20,072
192
Zürcher Kantonalbank Annual Report 2024
› Financial Report
2
Overview of collateral for loans / receivables and off-balance-sheet transactions,
as well as impaired loans / receivables (continued)
Information on impaired loans
in CHF million
Gross debt
amount
Estimated
liquidation
value of
collateral
Net debt
amount
Individual
value
adjust-
ments 1
›Impaired loans
2024
516
222
294
271
2023
487
201
286
249
1
Individual value adjustments of 100 percent of the net debt amount are normally made. Individual value adjustment rates may apply in the case of major positions.
3
Trading portfolios and other financial instruments at fair value
in CHF million
2024
2023
›Assets
Debt securities, money market securities / transactions
4,473
5,122
– of which, listed 1
3,810
4,273
Equity securities
4,199
2,536
Precious metals and commodities
2,628
2,235
Other trading portfolio assets
33
114
Total trading transactions
11,334
10,007
Debt securities
–
–
Structured products
–
–
Other
–
–
Total other financial instruments at fair value
–
–
Total assets
11,334
10,007
– of which, determined using a valuation model
697
963
– of which, securities eligible for repo transactions in accordance with liquidity requirements
1,426
1,948
›Liabilities
2024
2023
Debt securities, money market securities / transactions
2,830
3,213
– of which, listed 1
2,699
3,100
Equity securities
25
5
Precious metals and commodities
5
5
Other trading portfolio liabilities
2
1
Total trading portfolio liabilities
2,862
3,224
Debt securities
–
–
Structured products
2,550
2,288
Other
–
–
Total liabilities from other financial instruments at fair value
2,550
2,288
Total liabilities
5,412
5,512
– of which, determined using a valuation model
2,681
2,401
1
Listed = traded on a recognised exchange.
193
Zürcher Kantonalbank Annual Report 2024
› Financial Report
4
Derivative financial instruments (assets and liabilities)
Trading instruments
Hedging instruments
in CHF million
Positive
replacement
values
Negative
replacement
values
Contract
volume 1
Positive
replacement
values
Negative
replacement
values
Contract
volume 1
›Interest rate instruments
Forward contracts including FRAs
11
11
12,991
–
–
–
Swaps
13,394
13,107
672,541
550
200
21,652
Futures
–
–
25,152
–
–
–
Options (OTC)
68
47
4,650
–
–
–
Options (exchange-traded)
–
–
1
–
–
–
Total
13,473
13,166
715,335
550
200
21,652
›Foreign exchange / precious metals
Forward contracts
4,756
4,254
417,461
–
–
–
Combined interest rate / currency swaps
294
412
1,676
14
88
2,332
Futures
–
–
148
–
–
–
Options (OTC)
45
28
4,755
–
–
–
Options (exchange-traded)
0
0
4
–
–
–
Total
5,095
4,694
424,044
14
88
2,332
›Equity securities / indices
Forward contracts
–
–
–
–
–
–
Swaps
59
21
1,988
–
–
–
Futures
–
–
2,967
–
–
–
Options (OTC)
126
41
4,040
–
–
–
Options (exchange-traded)
245
253
11,659
–
–
–
Total
430
316
20,655
–
–
–
›Credit derivatives
Credit default swaps
2
3
161
–
–
–
Total return swaps
–
–
–
–
–
–
First-to-default swaps
–
–
–
–
–
–
Other credit derivatives
–
–
–
–
–
–
Total
2
3
161
–
–
–
›Other 2
Forward contracts
–
–
–
–
–
–
Swaps
–
–
–
–
–
–
Futures
–
–
388
–
–
–
Options (OTC)
–
–
–
–
–
–
Options (exchange-traded)
4
4
213
–
–
–
Total
4
4
600
–
–
–
›Total before netting agreements
2024
19,004
18,181
1,160,795
565
288
23,984
– of which, determined using a valuation
model
19,004
18,181
–
565
288
–
2023
21,090
22,033
1,078,495
737
304
26,248
– of which, determined using a valuation
model
21,090
22,033
–
737
304
–
1
The contract volume shows the amount of underlying on which a derivative is based or the notional amount underlying the derivative in accordance with the requirements
of FINMA Circular 2020 / 1, irrespective of whether the derivative is traded long or short. The contract volume is determined differently depending on the type of contract and
does not permit any direct conclusions to be drawn about the risk exposure.
2
Includes commodities and hybrid derivatives.
194
Zürcher Kantonalbank Annual Report 2024
› Financial Report
4
Derivative financial instruments (assets and liabilities) (continued)
in CHF million
Positive
replacement values
(cumulative)
Negative
replacement values
(cumulative)
›Total after netting agreements 3
2024
2,802
1,005
2023
1,060
2,458
›Breakdown by counterparty
Positive replacement values
(after netting agreements)
Central
clearing houses
Banks and
securities firms
Other
customers
2024
154
264
2,384
3
For over-the-counter (OTC) transactions, the positive and negative replacement values of derivative financial instruments as well as the related cash collateral are offset
(netting). For this purpose, a relevant bilateral agreement with the affected counterparties must be in place. This agreement must be proven to be recognised and legally
enforceable.
5
Financial investments
in CHF million
Book value
Fair value
2024
2023
2024
2023
Debt securities
4,710
5,252
4,787
5,147
– of which, intended to be held to maturity
4,710
5,252
4,787
5,147
– of which, not intended to be held to maturity (available for sale)
–
–
–
–
Equity securities
134
112
261
233
– of which, qualified participations 1
5
8
8
14
Precious metals
349
187
349
187
Real estate
4
7
4
7
Cryptocurrencies
–
–
–
–
Total financial investments
5,197
5,558
5,402
5,574
– of which, securities eligible for repo transactions in accordance with
liquidity requirements
4,659
4,710
4,737
4,609
1
At least 10 percent of the capital or voting rights.
in CHF million
Counterparties by
rating
Moody’s
Aaa – Aa3
A1 – A3
Baa1 – Baa3
Ba1 – Ba3
Lower
than Ba3
Unrated
Standard & Poor’s, Fitch
AAA – AA-
A+ – A-
BBB+ – BBB-
BB+ – B-
Below B-
Unrated
Debt securities: Book values
2024
4,588
51
–
–
–
71
All debt instruments without a rating fulfil the conditions of high-quality liquid assets (HQLA) according to the Liquidity Ordinance (LiqV).
If two ratings exist with different risk weightings, the rating with the lower risk weighting is used.
If more than two ratings exist with different risk weightings, those ratings which correspond to the two lowest risk weightings are taken into consideration.
The higher of the two risk weightings is used. Top priority is given to the issue rating and second priority to the issuer rating.
195
Zürcher Kantonalbank Annual Report 2024
› Financial Report
10
Other assets and liabilities
in CHF million
Other assets
Other liabilities
2024
2023
2024
2023
Compensation account
0
–
159
361
Deferred income taxes recognised as assets
–
–
–
–
Amount recognised as assets in respect of employer
contribution reserves
–
–
–
–
Amount recognised as assets relating to other assets
from pension schemes
–
–
–
–
Negative goodwill
–
–
–
–
Settlement accounts
368
492
549
1,308
Indirect taxes
24
22
110
106
Other
5
6
10
9
Total
398
519
829
1,784
11
Assets pledged or assigned to secure own commitments,
and assets under reservation of ownership
in CHF million
2024
2023
Book value
Effective
commitment
Book value
Effective
commitment
›Pledged / assigned assets
Liquid assets
245
245
236
236
Amounts due from banks
2,931
2,913
2,149
2,118
Amounts due from customers
1,114
1,044
2,252
2,238
Mortgage loans
13,715
11,162
14,393
11,558
Trading portfolio assets
597
597
593
593
Financial investments
380
332
123
97
Total pledged / assigned assets
18,984
16,294
19,746
16,840
No assets are subject to reservation of ownership.
Note 1 shows instruments serving as collateral for which a right of resale or pledging has been granted in connection with securities financing.
12
Liabilities relating to own pension schemes and number and nature
of equity instruments of the bank held by own pension schemes
in CHF million
2024
2023
Change
›Liabilities to own pension schemes from
balance-sheet transactions
Amounts due in respect of customer deposits
53
47
7
Cash bonds
0
0
0
Negative replacement values of derivative financial instruments 1
0
63
– 63
Accrued expenses and deferred income
0
0
0
Other liabilities
0
0
0
Total
53
110
– 56
Own pension schemes do not hold any of the bank’s equity instruments.
1
After taking netting agreement into account.
196
Zürcher Kantonalbank Annual Report 2024
› Financial Report
13
Information on pension schemes
a)
Employer contribution reserves (ECR)
Zürcher Kantonalbank does not have any employer contribution reserves.
b)
Economic benefit / obligations and the pension expenses
in CHF million
Over- /
underfunding
Economic interest
of the bank
Change in
economic
interest versus
previous year
Contribu-
tions paid
Pension expenses
in personnel expenses
End
2024
2024
2023
2024
2024
2024
2023
Employer-sponsored funds / em-
ployer-sponsored pension schemes
–
–
–
–
–
–
–
Pension plans without
overfunding / underfunding
–
–
–
–
2
2
111
Pension plans with overfunding
1
–
–
–
115
115
–
Pension plans with underfunding
–
–
–
–
–
–
–
Pension schemes without own
assets
–
–
–
–
–
–
–
Total
1
–
–
–
117
117
111
14
Issued structured products
Book value
Total
Valued as a whole
Valued separately
in CHF million
Booked in
trading
portfolio
Booked in
other
financial
instruments
at fair value
Value of
the host
instrument
Value of the
derivative
Underlying risk of the embedded derivative
Interest rate instruments
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Equity securities
With own debenture component
–
2,380
–
–
2,380
Without oDC
–
–
–
–
–
Foreign currencies
With own debenture component
–
167
–
–
167
Without oDC
–
–
–
–
–
Commodities / precious metals
With own debenture component
–
2
–
–
2
Without oDC
–
–
–
–
–
Loans
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Real estate
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Hybrid instruments
With own debenture component
–
–
–
–
–
Without oDC
–
–
–
–
–
Total 2024
–
2,550
–
–
2,550
Total 2023
–
2,288
–
–
2,288
197
Zürcher Kantonalbank Annual Report 2024
› Financial Report
16
Presentation of value adjustments and provisions, reserves for
general banking risks, and changes therein during the current year
in CHF million
Balance
at end of
2023
Changes to
scope of
consolida-
tion
Use in
conformity
with
designated
purpose
and reversals
Reclassifi-
cations
Currency
differences
Past due
interest,
recoveries
New
creations
charged
to income
Releases to
income
statement
Balance
at end of
2024
Provisions for deferred
taxes
–
–
–
–
–
–
–
–
–
Provisions for pension
benefit obligations
–
–
–
–
–
–
–
–
–
Provisions for default risks
149
–
– 2
–
–
–
116
– 111
151
– of which,
provisions for
expected loss
57
–
–
–
–
–
68
– 64
61
Provisions for other
business risks 1
13
–
– 1
–
–
–
1
– 0
13
Provisions for restructuring
–
–
–
–
–
–
–
–
–
Other provisions 2
13
–
– 0
–
–
–
2
– 1
13
Total provisions
175
–
– 4
–
–
–
118
– 112
177
Reserves for general
banking risks
4,755
–
–
–
–
–
–
–
4,755
Value adjustments for
default and country risks
676
–
– 10
–
–
2
300
– 249
718
– of which, value
adjustments
for default risks
in respect of
impaired loans /
receivables 3
249
–
– 10
–
–
2
89
– 59
271
– of which, value
adjustments
for expected loss
427
–
–
–
–
–
210
– 190
447
1
Provisions for other business risks relate to provisions for settlement risks, for example, which cover identifiable risks as at the balance sheet date.
2
The other provisions include, among other things, provisions for litigation and provisions for employees’ holiday credits.
3
Default risks consist primarily of counterparty risks, for which value adjustments of 100 percent of the net debt amount are generally made.
Individual value adjustment rates may apply in the case of major positions.
Recoveries from amounts due derecognised in previous periods are reported directly in Changes in value adjustments for default risk and losses from interest operations
(2024: CHF 2 million / 2023: CHF 1 million).
For more details on the management of credit risks, operational risks and legal and compliance risks, please refer to section I) Risk report.
17
Presentation of the bank’s capital
in CHF million
Total par value
2024
Total par value
2023
Endowment capital
2,425
2,425
Total bank’s capital
2,425
2,425
Zürcher Kantonalbank’s capital consists of endowment capital in the amount of CHF 2,425 million. On 2 November 2020, the Cantonal Parliament decided to increase the endowment
capital ceiling, which has an indefinite time limit, by CHF 425 million to CHF 3,425 million. The endowment capital of CHF 1,000 million (endowment capital reserve), which has been
approved by the Cantonal Parliament and has not yet been called on, has been reserved in full for the Bank’s contingency plan by resolution of the Board of Directors and will be counted
towards the gone concern capital component. As a result, the endowment capital reserve can only be called on by order of FINMA or a FINMA-appointed restructuring official.
198
Zürcher Kantonalbank Annual Report 2024
› Financial Report
18
Number and value of equity securities or options on equity securities
held by all executives and directors and by employees, and disclosures
on any employee participation schemes
Zürcher Kantonalbank does not have an employee participation scheme.
19
Amounts due from / to related parties
in CHF million
Due from
Due to
2024
2023
2024
2023
Holders of qualified participations
21
15
734
463
Group companies
351
379
355
368
Linked companies
323
330
604
864
Transactions with members of governing bodies
12
16
31
30
Other related parties
–
–
–
–
Affiliated companies are public-law institutions of the respective canton or public-private enterprises in which the canton holds qualified participations. On- and off-balance-sheet
transactions with related parties are conducted at usual market conditions, with the exception of loans to members of governing bodies. Loans to governing bodies are granted on
employee terms in some cases.
This primarily involved the usual balance sheet banking business, i.e. it was mainly amounts due from and due to customers.
The totals above also include securities items and claims and liabilities from transactions in derivatives (positive and negative replacement values). The off-balance-sheet transactions
with related parties in the amount of CHF 2,870 million (2023: CHF 3,242 million) primarily include irrevocable loan commitments, in particular the keepwell agreement with Zürcher
Kantonalbank Finance (Guernsey) Ltd., and other contingent liabilities.
20
Disclosure of holders of significant participations
Zürcher Kantonalbank is an independent public-law institution of the Canton of Zurich.
21
Disclosure of own shares and composition of equity capital
in CHF million
2024
2023
Reserves for general banking risks
4,755
4,755
Bank’s capital
2,425
2,425
Statutory retained earnings reserve
1,213
1,213
Voluntary retained earnings reserve
5,354
4,654
Profit carried forward
4
4
Result of the period
1,112
1,229
Total equity
14,863
14,279
The bank does not hold any of its own shares. The statutory retained earnings reserve cannot be distributed.
199
Zürcher Kantonalbank Annual Report 2024
› Financial Report
22
Disclosures in accordance with the Ordinance against Excessive Compensation
with respect to Listed Stock Corporations and Article 663c para. 3 CO for banks
whose equity securities are listed
The requirements are not applicable for Zürcher Kantonalbank.
26
Breakdown of total assets by credit rating of country groups
(risk domicile view)
2024
Net foreign exposure
2023
Net foreign exposure
Rating system
ZKB’s own country rating
Moody’s
in CHF million
Share as %
in CHF million
Share as %
A
Aaa / Aa1 / Aa2 / Aa3
24,349
85.9
21,224
87.6
B
A1 / A2 / A3
1,603
5.7
1,173
4.8
C
Baa1 / Baa2 / Baa3
682
2.4
436
1.8
D
Ba1 / Ba2
1,254
4.4
854
3.5
E
Ba3
4
0.0
12
0.1
F
B1 / B2 / B3
319
1.1
250
1.0
G
Caa1 / Caa2 / Caa3 / Ca / C
138
0.5
266
1.1
Total
28,350
100.0
24,215
100.0
j) Information on off-balance-sheet transactions
28
Contingent liabilities and contingent assets
in CHF million
2024
2023
Guarantees to secure credits and similar
466
434
Performance guarantees and similar
2,169
2,139
Irrevocable commitments arising from documentary letters of credit
1,419
1,198
Other contingent liabilities
–
–
Total contingent liabilities
4,054
3,771
Contingent assets arising from tax losses carried forward
–
–
Other contingent assets
–
–
Total contingent assets
–
–
Zürcher Kantonalbank is jointly and severally liable for all obligations in connection with the val-
ue added tax (VAT) of companies belonging to the VAT group of Zürcher Kantonalbank in Switzerland.
200
Zürcher Kantonalbank Annual Report 2024
› Financial Report
30
Breakdown of fiduciary transactions
in CHF million
2024
2023
Fiduciary investments with third-party companies
1,066
983
Fiduciary investments with group companies and linked companies
–
–
Fiduciary loans
–
–
Fiduciary transactions arising from securities lending and borrowing
(in the bank’s own name for the account of customers)
–
–
Fiduciary crypto currencies held for customer's accounts
21
–
Other fiduciary transactions
–
–
Total
1,087
983
31
Breakdown of managed assets and presentation of their development
a)
Breakdown of managed assets
in CHF million
2024
2023
›Type of managed assets
Assets in collective investment schemes managed by the bank
168,799
139,186
Assets under discretionary asset management agreements
103,392
86,458
Other managed assets 3
180,335
165,898
Total managed assets (including double counting) 1 / 3
452,526
391,543
– of which, double counting
92,597
72,903
Assets with Custody Services 2 / 3
63,534
55,003
Total client assets (including double counting)
516,060
446,546
1
The assets under management shown include all client assets of an investment nature held with Zürcher Kantonalbank, as well as client assets held with third-party banks that
are managed by Zürcher Kantonalbank. Zürcher Kantonalbank also includes client deposits that are not of an investment nature in its reported assets under management.
Non-inclusion of accounts that do not have an investment element would lead to greater volatility in the assets under management shown and thus distort the meaningfulness
of reported trends in assets under management. Assets held in custody at Zürcher Kantonalbank that are managed by third parties (custody-only holdings) are not included in
either assets under management or total client assets. Holdings of banks and significant investment fund companies (including their collective pension fund foundations, invest-
ment trusts, pension foundations and pension funds) and other institutions for which Zürcher Kantonalbank acts exclusively as custodian bank are treated as custody-only.
2
Assets of clients who receive additional custody services from Zürcher Kantonalbank in addition to pure custody are shown as assets with custody services.
3
In the 2024 reporting year, Zürcher Kantonalbank clarified the criteria for distinguishing between assets under management and assets with custody services. The disclosure
was refined accordingly and the comparative figures adjusted. As at 31 December 2023, this led to a reclassification in the previous year from assets under management to
assets with custody services in the amount of CHF 55,003 million, as well as to a reduction in net new money of CHF 9,354 million and in fluctuations in prices and exchange
rates, interest and dividend payments of CHF 1,460 million.
b)
Presentation of the development of managed assets
in CHF million
2024
2023
Total managed assets (including double counting) at beginning
391,543
351,889
+ / – net new money inflow or net new money outflow 3 / 4
29,847
27,236
+ / – price gains / losses, interest, dividends and currency gains / losses 3 / 4
32,333
13,850
+ / – other effects
– 1,197
– 1,431
Total managed assets (including double counting) at end 3
452,526
391,543
4
The net new money inflow / outflow corresponds to the development of managed client assets adjusted for fluctuations in prices and exchange rates, interest and dividend
payments, fees and expenses charged to clients, and reclassification of assets. Changes due to acquisitions / disposals of subsidiaries are not included. The interest billed to loan
clients is included in the change in net new money inflow / outflow.
201
Zürcher Kantonalbank Annual Report 2024
› Financial Report
k) Information on the income statement
32
Breakdown of the result from trading activities and
the fair value option
a)
Breakdown by business area (in accordance with the organisation
of the bank / financial group)
in CHF million
2024
2023
Result from trading in foreign exchange, bank notes and precious metals
147
155
Result from trading in bonds, interest rate and credit derivatives
93
153
Result from trading in equities and structured products
62
26
Result from other trading activities 1
34
48
Total
336
383
1
The result from other trading activities includes results from securities lending and borrowing as well as positions
for which the Executive Board or Asset Management is responsible.
b)
Breakdown by underlying risk and based on the use of the fair value option
Result from trading activities from:
in CHF million
Foreign
exchange
and bank
notes
Precious
metals
Securities
lending
and
borrowing
Bonds,
interest
rate and
credit
derivatives
Equities
and equity
derivatives
Commodi-
ties and
commodity
derivatives
Other
products 2
2024
Result from trading in foreign exchange, bank notes
and precious metals
147
129
10
–
8
–
–
–
Result from trading in bonds, interest rate and
credit derivatives
93
15
–
– 13
92
1
–
–
Result from trading in equities and structured products
62
– 3
– 7
0
13
59
– 0
0
Result from other trading activities
34
– 0
– 0
35
0
– 0
0
– 1
Total
336
140
2
22
114
59
0
– 1
– of which, from fair value option on assets
–
–
–
–
–
–
–
–
– of which, from fair value option on liabilities
– 242
– 3
– 1
–
–
– 238
– 0
0
2
The trading result from other products includes hybrid products and real estate derivatives.
202
Zürcher Kantonalbank Annual Report 2024
› Financial Report
33
Disclosure of material refinancing income in the item interest
and discount income as well as material negative interest
During financial year 2024, refinancing income from trading activities of CHF – 369.5 mil-
lion (previous year: CHF – 435.6 million) was included in the item Interest and discount income.
The item Interest and discount income also includes the result of currency swaps in the amount
of CHF 1,141.9 million (previous year: CHF 987.4 million), which were entered into solely for the
purpose of engaging in interest arbitrage. Negative interest on lending business is shown as a
reduction in the interest and discount income. Negative interest on deposit-taking business is
shown as a reduction in interest expenses.
in CHF million
2024
2023
Negative interest on lending business (reduction in interest and discount income)
0
0
Negative interest on deposit-taking business (reduction in interest expenses)
1
2
34
Breakdown of personnel expenses
in CHF million
2024
2023
Salaries and benefits
942
927
– of which, alternative forms of variable compensation
–
–
AHV, IV, ALV and other social security contributions
195
179
Changes in book value for economic benefits and obligations arising from pension schemes
–
–
Other personnel expenses
36
33
Total
1,174
1,139
35
Breakdown of general and administrative expenses
in CHF million
2024
2023
Office space expenses
31
31
Expenses for information and communications technology
187
175
Expenses for vehicles, equipment, furniture and other fixtures, as well as operating lease expenses
2
2
Fees of audit firms
4
4
– of which, for financial and regulatory audits
4
4
– of which, for other services
0
0
Other operating expenses
262
269
– of which, compensation for state guarantee
31
30
Total
486
481
203
Zürcher Kantonalbank Annual Report 2024
› Financial Report
36
Explanations regarding material losses, extraordinary income and expenses,
reserves for general banking risks and value adjustments and
provisions no longer required
in CHF million
2024
2023
›Extraordinary income
Reversal of impairment on other participations
8
3
Income from sale of other real estate / bank premises
9
–
Income from sale of participations
0
–
Other
1
0
Total
18
4
›Extraordinary expenses
Losses from sale of other real estate / bank premises
–
–
Losses from disposal of participations
–
–
Other
0
–
Total
0
–
›Changes in reserves for general banking risks
Creation of reserves for general banking risks 1
–
225 1
Release of reserves for general banking risks
–
–
Total
–
225
1
Allocation to strengthen the bank’s capital.
37
Disclosure of and reasons for revaluations of participations and tangible
fixed assets up to acquisition cost at maximum
in CHF million
2024
2023
Participations
Registered office
CLS Group Holdings AG
Lucerne
0
0
TWINT Ltd.
Zurich
1
0
Zürcher Kantonalbank Österreich AG
Salzburg
6
2
Total
7
3
Appreciation is applied to non-listed participations in accordance with the mean value method and, for listed participations, in accordance with the market value method.
39
Presentation of current taxes, deferred taxes, and disclosure of tax rate
in CHF million
2024
2023
Creation of provisions for deferred taxes
–
–
Reversal of provisions for deferred taxes
–
–
Recognition of deferred taxes on losses carried forward
–
–
Recognition of other deferred taxes
–
–
Reversal of other deferred taxes
–
–
Expenses for current income and capital taxes
– 156 1
–
Expenses for property gains taxes
– 2
–
Total
– 158
–
Unrecognised tax reductions on losses carried forward, and tax credits
not recognised under the principle of prudence
–
–
Hypothetical deferred income taxes calculated at theoretical tax rates
on revaluations of investments not relevant for tax purposes
–
–
Figures in table: minus = expense; plus = income
1
Of which OECD minimum tax CHF 156 million
Average weighted tax rate (basis: operating result): 12.6 %
204
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Pawnbroking agency
of Zürcher Kantonalbank
Zürcher Kantonalbank is required to operate a pawnbroking agency (§ 7 section 3 of the Zürcher
Kantonalbank Act). Since 1872, the pawnbroking agency has been granting loans in return for
the depositing of pledged items. It is managed as an independent business operation in Zurich,
at Zurlindenstrasse 105. The following section shows the balance sheet, income statement and
loan transactions of the pawnbroking agency.
Balance sheet (before appropriation of profit)
Assets
in CHF 1,000
2024
2023 Liabilities
in CHF 1,000
2024
2023
Liquid assets
326
358
Amounts due to banks
6,000
5,300
Amounts due from banks
538
395
Surplus from auctions
138
149
Accounts receivable
–
– Accounts payable
1
1
Loans
6,241
5,659
Provisions
125
115
Inventory
–
– Reserve fund
1,248
1,248
Furniture, IT system
0
0
Profit carried forward
0
0
Transitory assets /
accrued interest
246
217
Operating profit / -loss
– 161
– 184
Total assets
7,351
6,628
Total assets
7,351
6,628
Income statement
Expenses
in CHF 1,000
2024
2023 Income
in CHF 1,000
2024
2023
Operating expenses
879
890
Interest on loans
772
702
Refinancing expenses
114
81
Other income
101
84
Losses
30
0
Depreciation and
provisions
10
–
Operating profit
–
– Operating loss
161
184
Total
1,034
971
Total
1,034
971
Loan transactions
Items
in CHF
1,000
Items
in CHF
1,000
Total loans at 31.12.2023
3,751
5,659
New loans in 2024 (incl. renewals)
7,873
13,178
Repayments in 2024
7,675
12,512
Proceeds from auctions incl. inventory receipts
103
84
Total loans at 31.12.2024
3,846
6,241
205
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Ernst & Young Ltd
Maagplatz 1
P.O. Box
CH-8010 Zurich
Phone:
+41 58 286 31 11
www.ey.com/en_ch
Report of the statutory auditor to the Cantonal Parliament of Zurich
on our audit of the financial statements as of 31 December 2024 of
Zürcher Kantonalbank, Zürich
Zurich, 27 February 2025
Report of the statutory auditor
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Zürcher Kantonalbank (the Company), which
comprise the balance sheet as at 31 December 2024, the income statement and the
statement of changes in equity for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the financial statements (pages 186 to 204) comply with Swiss law and the
Law on Zürcher Kantonalbank.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing
(SA-CH). Our responsibilities under those provisions and standards are further described in
the “Auditor's responsibilities for the audit of the financial statements” section of our report.
We are independent of the Company in accordance with the provisions of Swiss law and the
requirements of the Swiss audit profession, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the “Auditor's responsibilities for the audit of
the financial statements” section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the financial statements. The results of
our audit procedures, including the procedures performed to address the matters below,
provide the basis for our audit opinion on the financial statements.
206
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Determination of value adjustments and provisions for default risks on
loans to clients
Area of
focus
Zürcher Kantonalbank discloses loans to clients, consisting of amounts
due from customers and mortgage loans, at nominal value less any
necessary value adjustments.
For default risks on impaired loans, individual value adjustments are
made. For default risks on non-impaired loans value adjustments and
provisions for expected losses are recognized.
For the measurement of value adjustments and provisions for default
risks, valuation models are used. In addition, this requires making
estimates and assumptions which, by definition, involve judgments and
may vary depending on the valuation.
As of 31 December 2024, Zürcher Kantonalbank discloses client loans
totaling CHF 118.2 billion. As of the balance sheet date, individual value
adjustments and provisions for impaired loans amounted to CHF 361.2
million and value adjustments and provisions for expected losses
amounted to CHF 508.1 million. With 58.9%, loans to clients represent a
material part of the assets of Zürcher Kantonalbank, and we consider the
determination of value adjustments and provisions for default risks on
loans to clients as a key audit matter.
The significant accounting principles for determining value adjustments
and provisions for default risks are described by Zürcher Kantonalbank
on pages 112 to 114, 118, 119 as well as on pages 158 to 165 of the
bank’s annual report. Furthermore, we refer to notes 2 and 16 on pages
191, 192 and 197 in the notes to the financial statements.
Our audit
response
We audited the processes and key controls in connection with granting
and monitoring loans as well as with regard to the methods for identifying
and determining individual value adjustments and provisions for default
risks on loans to clients. Moreover, we evaluated the concept for the
determination of value adjustments and provisions for expected losses.
Finally, we performed sample tests on the impairment of selected client
loans, and evaluated the compliance of significant accounting principles
as well as the appropriateness of the disclosures in the notes to the
financial statements.
Our audit procedures did not lead to any reservations concerning the
determination of value adjustments and provisions for default risks on
loans to clients.
207
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Fair value measurement of financial instruments
Area of
focus
Fair value is defined as the amount for which an asset is exchanged or a
liability settled between knowledgeable, willing parties in an arm’s length
transaction. This amount corresponds to the price requested in a price-
efficient and liquid market or, if this is missing, to the price determined on
the basis of a valuation model. Valuation models are significantly affected
by the assumptions that are used, including interest, forward and swap
rates, spread curves and the volatility and estimates of future cash flows.
There is a significant degree of judgment involved in making these
assumptions.
Zürcher Kantonalbank discloses financial instruments at fair value
measurement in different balance sheet items. As of 31 December 2024,
the fair value of positive replacement values of derivative financial
instruments amounts to CHF 2.8 billion, while that of the negative
replacement values amounts to CHF 1.0 billion. Furthermore, as of 31
December 2024, Zürcher Kantonalbank discloses liabilities from other
financial instruments at fair value measurement totaling CHF 2.6 billion
that were determined using a valuation model.
As a result of the scope of judgment and the significance of the listed
balance sheet items in the financial statements of Zürcher Kantonalbank,
the valuation of these items represents a key audit matter.
The corresponding accounting and valuation principles are described by
Zürcher Kantonalbank on pages 114, 115, 120 as well as on pages 165
to 170 of its annual report. Furthermore, we refer to notes 3, 4 and 14
on pages 192 to 194 and 196 in the notes to the financial statements.
Our audit
response
We audited the processes and key controls with regard to fair value
measurement, the validation and application of valuation models.
Moreover, we assessed the assumptions made in connection with the
valuation and their appropriateness on the basis of sample testing and
evaluated the measurement of financial instruments by means of
independent valuation models. On the basis of sample testing and a
comparison with third-party sources, we assessed the fair values used
and directly available from an active market. Moreover, we evaluated the
appropriateness of the disclosures in the notes to the financial
statements.
Our audit procedures did not lead to any reservations concerning the
fair value measurement of financial instruments.
208
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Other information
The Board of Directors is responsible for the other information. The other information
comprises the information included in the annual report, but does not include the
consolidated financial statements, the stand-alone financial statements and our auditor’s
reports thereon.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Board of Directors’ responsibilities for the financial statements
The Board of Directors is responsible for the preparation of the financial statements in
accordance with the applicable financial reporting framework for banks, the provisions of
Swiss law and the Law on Zürcher Kantonalbank, and for such internal control as the Board
of Directors determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern, and using the going concern basis of accounting unless the Board of
Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located
on EXPERTsuisse’s website at: https://www.expertsuisse.ch/en/audit-report. This description
forms an integral part of our report.
209
Zürcher Kantonalbank Annual Report 2024
› Financial Report
Report on other legal and regulatory requirements
In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal
control system exists, which has been designed for the preparation of the financial
statements according to the instructions of the Board of Directors.
Furthermore, we confirm that the appropriation of available earnings complies with Swiss law
and the Law on Zürcher Kantonalbank. We recommend that the financial statements
submitted to you be approved.
Ernst & Young Ltd
Bruno Patusi
Bruno Taugner
Licensed audit expert
Licensed audit expert
(Auditor in charge)
A
Assessment
Appraisal of a project,
a situation or participant.
Audit
The business unit Audit
(the Inspectorate) is responsible
for the group’s internal auditing.
In organisational terms, it reports
directly to the Board of Directors
and supports the latter in fulfilling
its supervisory and control tasks.
B
Bank guarantee
A bank guarantee serves as
a financial security instrument in
national and international business
transactions to protect against pay
ment and performance defaults.
Our bank provides various sureties,
bank guarantees and standby let
ters of credit to fulfil the different
security requirements of our clients.
Basel III
The reforms published by the
Basel Committee on Banking Super
vision in 2010, Basel III, include a
further revision of the Basel Capital
Accord. Besides stricter, risk-based
capital requirements with a coun
tercyclical effect, Basel III sets limits
on leverage for the first time (lever
age ratio). It also specifies a global
minimum liquidity standard.
Basel Committee
on Banking Supervision
The Basel Committee on
Banking Supervision was established
by the Bank for International Settle
ments (BIS) in 1974 and is made up
of representatives of central banks
and banking supervisory authorities
from 27 countries. Switzerland is
CO2e
CO2-equivalent (CO2e) is a
measure of the relative contribu
tion of a greenhouse gas to global
warming over a specific period
of time. It indicates the degree to
which a certain amount of a green
house gas contributes to global
warming compared to the same
amount of CO2. Carbon dioxide
(CO2) accounts for around 80 per
cent of global emissions, while
the other gases regulated by the
Kyoto Protocol are responsible for
the remaining 20 percent. These
include methane (CH4), nitrous
oxide (laughing gas, N2O), flu
orinated greenhouse gases (CFCs)
and sulphur hexafluoride (SF6).
Commodity trade finance
Financing for commodities
trading in the form of loans.
Compliance
Compliance involves ensur
ing that the conduct and actions of
the bank and its employees meet
applicable legal and ethical stand
ards. It also covers all organisation
al measures designed to prevent
violations of the law and breaches
of ethical norms by the bank.
Confidence level
Also known as confidence
interval or expectancy range. Indi
cates an interval for the accuracy
of the estimated position of a
parameter. The confidence interval
is the range that contains the true
position of the parameter with a
specific frequency (confidence
level) when random samples are
drawn an infinite number of times.
Core capital
This term was introduced
as part of the Basel Capital Accord
(Basel III) and refers to the equity
available to a company on a per-
represented by the SNB and FINMA.
The Basel Committee serves as a
forum for cooperation on banking
supervision issues and is the world’s
most important standard-setting
body for banking regulation. Of
particular importance is the Basel
Capital Accord, also known as
Basel I, Basel II and Basel III.
Bid-ask spread
Difference between the
buying and selling price of a
financial instrument or currency.
Business continuity
management
Business continuity manage
ment ensures a company’s critical
business functions are maintained
or restored in the case of internal
or external events.
C
Capital at risk
The maximum risk capital
specified by the Board of Directors,
divided between the various risk
categories of credit, market and
operational risks in order to limit
the various business activities.
Capital budgeting
Planning process for
determining the risk capital. The
available funds (risk capital) are
allocated to the various investment
opportunities (risk categories, risk
managers).
Clearing house
Financial sector institution
that ensures the orderly settlement
of financial transactions between
two counterparties by acting as a
central counterparty through which
financial transactions between
different parties are processed.
Glossary
210
Zürcher Kantonalbank Annual Report 2024
› Appendix
manent basis in order to cover
losses in its operations. It consists
primarily of paid-up corporate
capital or endowment capital,
as well as capital reserves and
profit reserves (Common Equity
Tier 1). Additional Tier 1 capital,
such as perpetual hybrid capital,
is also included.
Core capital ratio (Tier 1)
This term was introduced
as part of the Basel Capital Accord
(Basel III) and describes the level
of required core capital as a per
centage of risk-weighted assets.
Corporate governance
Corporate governance is
the totality of principles aimed at
safeguarding the owners’ interests;
it is intended to guarantee trans
parency and provide a proper
system of checks and balances at
the highest level of the company
while preserving decision-making
powers and efficiency.
Cost/income ratio (CIR)
The cost / income ratio is a
key measure of the efficiency of a
participant in the financial sector.
Countercyclical capital
buffer
The countercyclical capital
buffer is a preventive capital meas
ure within the Basel Ill framework
aimed at preventing excessive bank
lending. The level and implemen
tation timescale for the countercy
clical capital buffer are determined
by the Federal Council at the Swiss
National Bank’s (SNB) request,
with FINMA monitoring the imple
mentation of the measure at bank
level. The SNB can also confine
the countercyclical capital buffer
to just one sector of the credit mar
ket (e.g. residential mortgages).
Credit valuation
adjustment (CVA)
An additional capital require
ment to account for the risk of
a change in a counterparty’s credit
worthiness where OTC derivatives
are not settled via a central coun
terparty.
Creditworthiness
Ability and willingness of an
individual, company or country to
repay debts.
D
Documentary letter
of credit
A documentary letter of
credit is a payment instrument in
international trade. It includes
the obligation of a bank to pay the
seller (exporter) a certain amount
if the seller submits the required
delivery documents within a spe-
cified period.
Documentary collection
Documentation collection
is another instrument for payment
processing in international trade,
but it does not involve any pay
ment obligation on the part of
the bank towards the exporter. In
such transactions, the banks as
sume a transfer function so that
the importer receives the delivery
documents and ultimately the
goods only against payment of
the agreed amount.
E
Endowment capital
Equity made available to
Zürcher Kantonalbank, as a public-
law institution, by the canton, as
owner.
ESG
ESG describes the environ
mental, social and governance
criteria that are taken into account
in corporate management.
Exception to policy
Procedure or approach that
deviates from internal guidelines on
an exceptional basis.
Export financing
Export financing is a financing
instrument that helps our Swiss cli
ents to increase their export oppor
tunities by enabling them to grant
or arrange loans to their clients
abroad without having to restrict
their own liquidity. Export financing
also significantly reduces various
risks associated with foreign trade
transactions.
F
Fair value
Fair value is the amount for
which mutually independent know-
ledgeable business partners would
exchange an asset or repay a debt.
FATCA
The United States Foreign
Account Tax Compliance Act aims
to prevent US taxpayers from mini
mising their taxes, particularly
through using financial institutions
located abroad. The law came
into effect for financial institutions
worldwide on 1 July 2014.
FINMA
The Swiss Financial Market
Supervisory Authority (FINMA) is
responsible for supervising banks,
insurance companies, exchanges,
securities dealers, collective invest
ment schemes, as well as distribu
tors and insurance brokers. An
independent authority, it works
to protect creditors, investors and
policyholders, as well as to ensure
the stability and effectiveness of
the financial markets.
211
Zürcher Kantonalbank Annual Report 2024
› Appendix
I
Impairment
Decrease in value where the
book value of an asset (participa
tion, tangible fixed asset or intan
gible asset) exceeds the recoverable
amount (the greater of the net
market value or value in use).
IRB approach
The internal ratings-based
(IRB) approach is an institution-
specific modelling approach based
on internal ratings; it is used to
determine risk-based capital require
ments for credit risk. IRB approaches
are more risk-sensitive than the
standard approach and must be ap
proved by FINMA.
ISS ESG
The Institutional Shareholder
Services (ISS) Group evaluates com
panies and awards an ESG rating,
which measures the respective
company’s environmental (E),
social (S) and governance (G) risks.
Issuer
Issuers of securities such as
equities or bonds.
K
Key rate sensitivity
The degree of sensitivity
of an asset’s net present value to
minor changes in an interest rate,
e.g. the effect on the net present
value of a portfolio of financial in
vestments of a reduction in the
market interest rate by 0.01 per
cent.
Key risk takers
Key risk takers have a sus
tained influence on the bank’s busi
ness operations (risks, image, etc.),
on the group’s result and therefore
on the implementation of the
strategy.
L
LCR
The LCR (liquidity coverage
ratio) is a regulatory indicator that
compares the ratio of the portfolio
of assets classified as high quality
to the total net outflow over
the next 30 days. The LCR must be
determined using a predefined
stress scenario.
Letter of credit
The (documentary) letter of
credit is an instrument guarantee
ing the settlement of payment and
credit transactions in connection
with international trade. An import
er’s bank issues a written commit
ment in which it agrees to make
payment to the exporter of a good
upon receipt of the documents
specified in the letter of credit.
Leverage ratio
The leverage ratio is an un
weighted equity ratio and measures
a bank’s degree of indebtedness.
It defines the relationship between
equity and the sum of all assets
and various off-balance-sheet items.
Liquidity
A company’s ability to meet
its mandatory commitments in
full and on time without restriction.
The Swiss Banking Act requires
banks in Switzerland to have ade
quate liquidity. The money market
is central to the liquidity manage
ment of banks. The SNB provides
the money market with liquidity
to implement its monetary policy.
Long-term deferred
compensation
Unsecured deferred compen
sation in the form of a future allo
cation of a cash sum. It is deferred
for a period of three years and is
also subject to additional condi
tions, in particular the sustainable
success of the business.
M
Monte Carlo simulation
Stochastic process based on
very frequently conducted random
experiments. The aim is to use
probability theory to analytically
solve problems that are difficult
or impossible to solve.
MSCI ESG
Sustainability rating agency
that measures a company’s resil
ience to financially significant
environmental (E), social (S) and
governance (G) risks.
N
Negative emission
technologies (NET)
Biological and technical pro
cesses used to remove carbon from
the atmosphere and sequester it
permanently in forests, soils, wood
products or other carbon stores.
Negative
replacement value
The replacement value corre
sponds to the market value of out-
standing derivative financial instru
ments. Negative replacement val
ues constitute a financial obligation
and thus a liability.
Net new money inflow
The net inflow or outflow
of assets under management (net
new money) during a particular
period comprises new clients ac
quired, client departures, and the
inflow and outflow of investments
of existing clients. The term “net
new money” includes not only cash
inflows and outflows but also the
inflow and outflow of other invest
ments customary in the banking
business (e.g. securities or precious
metals). The inflow/outflow of
net new money is calculated at the
level of “total managed assets”,
212
Zürcher Kantonalbank Annual Report 2024
› Appendix
i.e. before the elimination of
double counting. Market-related
changes in asset values (e.g. price
changes, interest and dividend
payments) are not included as in
flows or outflows.
Net stable funding
ratio (NSFR)
The NSFR is a ratio estab
lished under Basel Ill. Compliance
with this ratio is intended to ensure
long-term liquidity. It is a supple
ment to the liquidity coverage ratio
(LCR). The NSFR is calculated by
dividing stable refinancing by long-
term liabilities (over one year).
Netting
The term netting describes
the offsetting of receivables and
payables under a netting agree
ment between two counterparties.
Netting agreements must be
enforceable under bankruptcy law.
As a result of netting, the level
of gross receivables/payables is re
duced to a net position.
O
OECD minimum taxation
The project was launched by
the Organisation for Economic
Co-operation and Development
(OECD) and the group of 20 major
industrialised and emerging eco
nomies (G20) with the aim of
ensuring that large, internationally
active companies pay at least
15 percent tax. Switzerland intro
duced the OECD minimum tax as
of 1 January 2024. In accordance
with the regulation, Zürcher
Kantonalbank (ZKB) also became
liable for tax. It was previously
tax-exempt as an institution under
public law. In contrast to other
companies, the OECD minimum
tax owed by ZKB goes in full to the
canton and is taken into account
when distributing the profit to the
canton and municipalities.
Open banking
Open banking is the opening
of banking data at the client’s re
quest so that, for example, account
or transaction data can be made
available for third-party software
solutions. If the client has accounts
with more than one bank, the bank
can also consolidate the client’s
other banking relationships in its
own e-banking system at the
client’s request. The bank fulfils
this client need by introducing
open and standardised interfaces
(API – application programming
interface).
OTC transaction
Transaction that takes place
over the counter (OTC), i.e. not
on an exchange but on a direct,
individual basis between two coun
terparties.
P
Positive replacement value
The replacement value
corresponds to the market value
of outstanding derivative financial
instruments. Positive replacement
values constitute a receivable and
thus an asset.
R
Repo (repurchase
agreement)
Financial transaction where
the borrower agrees to transfer
securities to the lender in return for
an agreed sum of money and re
deem them for payment plus inter
est at the end of the term.
Return on equity
(RoE)
The return on equity meas
ures the profitability of equity and
is calculated from the relationship
between net profit and equity.
Risk-adjusted pricing
Pricing where the price level
depends on the level of risk entered
into.
Risk capital allocation
The allocation of capital at
risk to the various risk categories (or
risk managers) as part of the plan
ning process.
Risk-weighted assets (RWA)
The term risk-weighted
assets was introduced as part of
the Basel Capital Accord (Basel II)
and constitutes the main basis
for measuring risk-based capital
ratios such as the core capital ratio.
Risk weighting assumes that not
every position entails the same level
of risk. For this reason, less risky
positions require less equity to un
derpin them than riskier ones.
S
Securities lending and
borrowing (SLB) transaction
SLB transactions involve
a lender transferring a security
to a borrower to use for a fixed or
indefinite, but callable period;
in return, they receive a fee from
the borrower.
SME
Small and medium-sized en
terprises with fewer than 250 em
ployees. Microbusinesses and small
enterprises are those with fewer
than 20 employees. Companies with
20 to 249 employees are considered
medium-sized enterprises.
Straight through processing
Straight through data pro
cessing in the sense that the in-
formation is processed without
manual intervention.
Systemically important banks
A bank or group of banks is
systemically important if it performs
213
Zürcher Kantonalbank Annual Report 2024
› Appendix
functions in the domestic lending
and deposit business and in the
payment transactions business that
are indispensable to the Swiss
economy and not substitutable at
short notice. Other criteria such
as size, risk profile and networking
are also taken into account. System
ically important banks in Switzer
land are subject to particularly strict
requirements (“too big to fail”).
T
TLAC
Total loss-absorbing capacity.
The TLAC is made up of the sum of
the going-concern and gone-con
cern capital requirements that an
institution must have according
to the financial market supervisory
authority.
U
Universal bank
A universal bank is a financial
institution that fundamentally con
ducts all banking transactions
and offers them to all client groups.
All banking transactions means
payment transactions, deposit busi
ness (accounts) and financing, as
well as investment, trading and
capital market business. All client
groups are private clients (Retail
Banking), high-net-worth individ-
uals (Private Banking), corporate
clients (Corporate Banking) and
large corporations (Investment
Banking). A universal bank gener
ates income from interest margin
business, commission business and
services (from securities and invest
ments), as well as trading activities.
V
Value at risk (VaR)
The maximum loss on a spe
cific risk position (e.g. a securities
portfolio) with a given probability
(e.g. 95 percent) over a given peri
od of time (e.g. ten days).
Volatility
Fluctuation, e.g. in the price
of a security.
214
Zürcher Kantonalbank Annual Report 2024
› Appendix
Locations
Canton of Zurich
We have a strong local base. With 51
branches and around 260 ATMs, we
have the densest network of branches
and ATMs in the Canton of Zurich.
Switzerland
International
Branches / Locations of Zürcher Kantonalbank
Büro Züri
Locations of Swisscanto Holding Ltd.
Representative offices
Locations of Complementa AG
Lausanne
St. Gallen
Luxembourg
Frankfurt
Munich
Mumbai *
Beijing *
Singapore *
Milan
Guernsey
São Paulo *
Vienna /
Salzburg
London
Eglisau
Feuerthalen
Andelfingen
Bülach
Dielsdorf
Kloten
Regensdorf
Dietikon
Schlieren
Höngg
Oerlikon
Wallisellen
Schwamendingen
Dübendorf
Volketswil Fehraltorf
Pfäffikon
Wetzikon
Hinwil
Wald
Rüti
Hombrechtikon
Stäfa
Männedorf
Meilen
Wädenswil
Richterswil
Horgen
Affoltern a.A.
Thalwil
Adliswil
Wollishofen
Wiedikon
Neumünster
Altstetten
Prime Tower
Unispital
City Klusplatz
Witikon
Stettbach
Küsnacht
Zumikon
Egg
Uster
Bauma
Bassersdorf
Turbenthal
Effretikon
Oberwinterthur
Winterthur
Eisengasse
215
Zürcher Kantonalbank Annual Report 2024
› Appendix
Branches
Adliswil
Albisstrasse 17
8134 Adliswil
Affoltern am Albis
Obere Bahnhofstrasse 25
8910 Affoltern am Albis
Andelfingen
Landstrasse 42
8450 Andelfingen
Bassersdorf
Postplatz 3
8303 Bassersdorf
Bauma
Bahnhofstrasse 8
8494 Bauma
Bülach
Kreuzstrasse 1
8180 Bülach
Dielsdorf
Wehntalerstrasse 45
8157 Dielsdorf
Dietikon
Zentralstrasse 19
8953 Dietikon
Dübendorf
Usterstrasse 1
8600 Dübendorf
Effretikon
Märtplatz 17
8307 Effretikon
Egg
Forchstrasse 138
8132 Egg
Eglisau
Obergass 8
8193 Eglisau
Fehraltorf
Grundstrasse 2
8320 Fehraltorf
Feuerthalen
Schützenstrasse 30
8245 Feuerthalen
Hinwil
Dürntnerstrasse 9
8340 Hinwil
Hombrechtikon
Grüningerstrasse 12
8634 Hombrechtikon
Horgen
Seestrasse 150
8810 Horgen
Kloten
Bahnhofstrasse 10
8302 Kloten
Küsnacht
Obere Wiltisgasse 48
8700 Küsnacht
Männedorf
Kugelgasse 21
8708 Männedorf
Meilen
Bahnhofstrasse 25
8706 Meilen
Pfäffikon
Turmstrasse 5
8330 Pfäffikon ZH
Regensdorf
Watterstrasse 57
8105 Regensdorf
Richterswil
Poststrasse 15
8805 Richterswil
Rüti
Bergstrasse 1
8630 Rüti
Schlieren
Zürcherstrasse 4
8952 Schlieren
Stäfa
Bahnhofstrasse 12
8712 Stäfa
Stettbach
Am Stadtrand 5
8600 Dübendorf
Thalwil
Gotthardstrasse 29
8800 Thalwil
Turbenthal
Tösstalstrasse 58
8488 Turbenthal
Uster
Webernstrasse 3
8610 Uster
Volketswil
Zentralstrasse 19
8604 Volketswil
Wädenswil
Zugerstrasse 12
8820 Wädenswil
Wald
Bahnhofstrasse 38
8636 Wald
Wallisellen
Bahnhofstrasse 23
8304 Wallisellen
Wetzikon
Bahnhofstrasse 188
8620 Wetzikon
Winterthur-
Oberwinterthur
Frauenfelderstrasse 30
8404 Winterthur
Winterthur-
Untertor
Untertor 30
8400 Winterthur
Zumikon
Dorfstrasse 61
8126 Zumikon
Zurich-Altstetten
Altstetterstrasse 142
8048 Zurich
Zurich-City
Bahnhofstrasse 9
8001 Zurich
Zurich-Höngg
Regensdorferstrasse 18
8049 Zurich
Zurich-Klusplatz
Witikonerstrasse 3
8032 Zurich
Zurich-Neumünster
Forchstrasse 5
8032 Zurich
Zurich-Oerlikon
Schaffhauserstrasse 331
8050 Zurich
Zurich
Prime Tower
Hardstrasse 201
8005 Zurich
Zurich-
Schwamendingen
Winterthurerstrasse 512
8051 Zurich
Canton of Zurich
216
Zürcher Kantonalbank Annual Report 2024
› Appendix
Zürcher
Kantonalbank
Finance (Guernsey)
Ltd.
Bordage House
Le Bordage
Saint Peter Port
Guernsey C. I. GY1 1BU
United Kingdom
ZKB
Securities (UK) Ltd.
Mutual House
Third Floor,
70 Conduit Street
London, W1S 2GF
United Kingdom
Zürcher
Kantonalbank
Österreich AG
Getreidegasse 10
5020 Salzburg
Austria
Zürcher
Kantonalbank
Österreich AG
Hegelgasse 6
1010 Vienna
Austria
International
Represen
tative Offices
Swisscanto
Zürcher
Kantonalbank
Representações Ltda.
São Paulo
Representative Office
Rua Pedroso Alvarenga,
n° 691, 4° andar
CJ 401–402 Itaim Bibi
CEP: 04531–011
São Paulo
Brazil
Zürcher
Kantonalbank
Beijing
Representative Office
Room 705, Tower 3
(Anlian Plaza)
International Centre
No. 38,
Do San Huan Bei Road
Chaoyang District
100026 Beijing
China
Zürcher
Kantonalbank
Mumbai
Representative Office
Office Suite # 1, 7th Floor,
B Wing
Supreme Business Park,
Hiranandani Gardens
Powai, Mumbai 400076
Zürcher
Kantonalbank
Singapore
Representative Office
9 Raffles Place # 25–03
Republic Plaza
Singapore 048619
Swisscanto
Holding Ltd.
Bahnhofstrasse 9
8001 Zurich
Swisscanto
Asset Management
International S. A.
6, route de Trèves
L-2633 Senningerberg
Luxembourg
Swisscanto
Asset Management
International S. A.
Bockenheimer
Landstrasse 92
60323 Frankfurt am Main
Germany
Swisscanto
Asset Management
International S. A.
Via Luigi Rossari 5
20121 Milan
Italy
Swisscanto
Fund Management
Company Ltd.
Bahnhofstrasse 9
8001 Zurich
Swisscanto
Pensions Ltd.
in liquidation
Bahnhofstrasse 9
8001 Zurich
Zurich-Unispital
Ramistrasse 100
8091 Zurich
Zurich-Wiedikon
Zweierstrasse 146
8003 Zurich
Zurich-Witikon
Witikonerstrasse 377
8053 Zurich
Zurich-Wollishofen
Albisstrasse 36
8038 Zurich
Switzerland
Lausanne location
Rue Centrale 10
1003 Lausanne
Complementa AG
Head office
Gaiserwaldstrasse 14
9015 St. Gallen
Zurich branch:
Eisengasse 16
8008 Zurich
Subsidiary
Germany
Complementa GmbH
Landsberger Strasse 302
DE– 80687 Munich
217
Zürcher Kantonalbank Annual Report 2024
› Appendix
Contacts
Zürcher Kantonalbank
Bahnhofstrasse 9
8001 Zurich
0844 843 823
zkb.ch
info@zkb.ch
For further information about
Zürcher Kantonalbank,
please don’t hesitate to contact us:
Retail clients
0844 843 823
Private banking
0844 843 827
Corporate clients
0844 850 830
Institutionals & Multinationals
044 292 87 00
Media
044 292 29 79
medien@zkb.ch
You can also find further information at zkb.ch
Imprint
Published by: Zürcher Kantonalbank, Zurich
Design and layout: Hej AG, Zurich
Photography: Christian Grund (pages 12, 44, 47, 51), Getty Images (Cover, page 20 top)
© 2025 Zürcher Kantonalbank
Legal information
The statements and forecasts contained in this document that relate to the Annual Report or other reports and to
the future development of Zürcher Kantonalbank and its business activities or that may influence these reflect estimates,
assumptions and expectations at the time the Annual Report or the respective report was prepared. By their nature,
they are subject to uncertainty, as risks, uncertainties and other factors may influence actual performance and results.
This means that actual performance may differ substantially from the estimates and expectations set out by Zürcher
Kantonalbank in this document and the respective report. In case of any deviations resulting from the translation,
the German version shall prevail. Zürcher Kantonalbank is not obliged to update the forward-looking statements in
this publication.
This document is for information purposes only. The statements and information
herein are neither an offer nor a recommendation to buy or sell financial instruments.
The amounts stated in this report have been rounded off. The total may therefore vary
from the sum of the individual values. The following rules apply to the tables:
0
(0 or 0.0) Figure that is smaller than half the unit of account used
–
Figure not available or not meaningful
Website addresses are provided in this report for information purposes only,
and ZKB does not integrate their content into this report.
218
Zürcher Kantonalbank Annual Report 2024
› Appendix
zkb.ch/annualreport