Price performance of the BKB participation certificate
The BKB participation certificate recorded a price loss of 19.20% or CHF 14.40 to CHF 60.60 over the course of 2020. Taking the dividend into account, this corresponds to a price loss of 15.7%.
Attractive dividend for participation certificate holders
Holders of BKB participation certificates participate in the solid 2020 business result: On 4 May 2021, they will be paid a constant dividend of CHF 3.10 (gross), equivalent to a dividend yield of 5.1%.
Broadly diversified participation certificate capital
The BKB participation certificate of Basler Kantonalbank is a security similar to shares and represents a non-voting co-ownership in the Bank. It has been listed on the SIX Swiss Exchange since 1986 (security number 923646). Since 2007, the participation certificate capital of CHF 50.2 million has comprised 5.9 million participation certificates with a nominal value of CHF 8.50. Almost 86% of these were held by third parties and 14% by BKB itself at the end of 2020.
Endowment capital
Around 86% or CHF 304 million of the total share capital is in the hands of the Canton of Basel-Stadt in the form of endowment capital. The endowment capital is made available by the canton for an unlimited period and, along with the participation certificate capital, forms the central pillar of the equity capital. The canton is compensated by ordinary interest on the endowment capital and a profit transfer.
High capital strength provides security
The Bank’s risk culture changed significantly with the introduction of value-based management in 2015. Since then, earnings and risk have been weighed against each other in every business decision, with the result that earnings did not go hand in hand with higher risk in the 2020 financial year either. At the same time, Basler Kantonalbank strengthened its capital base by 1.1% to CHF 3.4 billion during the reporting year. With a total capital ratio of 19.0% and a common tier 1 capital ratio of 18.6%, Basler Kantonalbank has a capital strength that is well above what is required by regulation (12.0%). The high surplus of regulatory capital has both a confidence-building and a price-supporting effect.
Excellent credit rating
In December 2020, Standard & Poor’s (S&P) confirmed BKB’s excellent AA+ rating. The short-term rating (A-1+) and the outlook (‘stable’) were also confirmed. BKB is thus one of the most robust banking institutions in Switzerland. BKB’s very high capital strength, resilience and strong market position are mentioned positively. S&P attests to BKB’s high level of resilience, despite the recession caused by the COVID-19 pandemic. The following factors were decisive for Basler Kantonalbank’s first-class rating: The very strong capital and liquidity base, supported by the stable earnings situation. Furthermore, the high market penetration in the Basel home market and the close relationship with the Canton of Basel-Stadt due to its majority shareholding and the state guarantee contributed to the excellent rating. S&P’s outlook for BKB’s rating development is stable. In its assessment, the rating agency refers, among other things, to the future-proof and robust positioning of BKB with its subsidiary Bank Cler and to the high equity and liquidity base.
Solid equity capitalisation in the foreground
BKB distributes the annual profit remaining after the formation of reserves. The amount of the profit distribution is based on the capital requirements of the Bank. A solid equity base is a priority to enable further value creation, absorb any risks and secure the strategic ability to act. BKB holds a certain reserve beyond the fulfilment of the equity capital requirements in order to ensure above-average solidity.
Canton and participation certificate holders benefit from good result
For 2020, an unchanged dividend of CHF 3.10 (gross) per participation certificate will be distributed. In addition to compensation for the state guarantee, the canton will receive interest on the endowment capital and a profit transfer. For 2020, the canton will receive a total of CHF 77.0 million, the same amount as in the previous year. According to the canton’s owner strategy, a delivery of at least CHF 45.0 million per year is expected for the years 2017–2020.
