Economic performance and shareholder value

Relevance of the topic

Ever since its foundation in 1850, Luzerner Kantonalbank has been synonymous with proximity to its clients, high quality of service and continuity. As an attractive employer and training institution, it also makes an important contribution to the regional economy and society.

Both the Act and the Articles of Association require LUKB to pursue a ‘for-profit operation of a full-service bank that conducts the usual banking business in accordance with recognised banking principles. The bank pays particular attention to the needs of the people and the economy of the Canton of Lucerne.’

In addition to the Canton of Lucerne as the majority shareholder, more than 33,000 other shareholders also benefit from LUKB's sustained profitability. The benefits that LUKB creates for its shareholders are of major importance for the Lucerne economic region: 61.5 % of the shares in the bank are owned by the Canton of Lucerne. A further 38.5 % of the share capital is widely distributed among the public (free float). At the end of 2025, 80.4 % of this free float was owned by natural persons (60.9 %) and legal entities (19.5 %) domiciled in Switzerland. 47.4 % of the free float is held by natural persons and legal entities domiciled in the Canton of Lucerne. Detailed information on the shareholder structure can be found in ‘LUKB share’ in the ‘About LUKB’ section of the 2025 Annual Report.

Responsible and up-to-date corporate governance forms the basis for long-term economic success in line with ethical principles. Corporate governance comprises the principles and structures according to which the company is managed and supervised by its governing and executive bodies. These bodies of LUKB include the General Meeting, the Board of Directors, the Executive Board and the auditors. As the supreme management body, the Board of Directors is responsible for strategic management as well as for supervision and control. The Executive Board is responsible for the operational management of the company and ensures the implementation of the strategy set by the Board of Directors. Detailed information on LUKB's corporate governance can be found in the ‘Corporate Governance Report’ of the LUKB Annual Report 2025.

Principle

By continuously and steadily generating value, LUKB plays a positive part in the sustainable development of Lucerne as a place to live and do business. In order to create long-term added value for its stakeholders, LUKB is guided by the principles of modern, efficient and responsible corporate governance.

It has an efficient organisational structure with clearly defined responsibilities, effective checks & balances between management and supervision, and a balanced composition of the top management bodies. This is complemented by market-oriented and moderate incentive systems as well as a transparent and reliable information policy.

With regard to the appropriation of profits, LUKB strives to strike an even long-term balance between self-financing and distributions to shareholders. The equity base is intended to ensure the sustainable growth and stability of the company at all times.

LUKB also maintains an ongoing and open dialogue with its shareholders.

Targets

As LUKB's principal shareholder, the Canton of Lucerne has formulated its objectives and expectations for LUKB in an Ownership Strategy¹⁾. This is revised every four years. The current Ownership Strategy was published in April 2025.

1) https://www.lukb.ch/eignerstrategie (in German)

As a broad-based full-service bank with regional roots, LUKB strives to achieve continuous growth in its business activities with as little volatility as possible. It attaches particular importance to a high level of financial stability. To implement this orientation, LUKB works with multi-year strategies and target systems with a five-year planning horizon. The bank discloses its long-term financial objectives transparently in advance and provides regular updates on the progress made towards achieving these objectives. Detailed information on the strategy and strategic objectives can be found in ‘Business model and strategy’ in the ‘About LUKB’ section in the 2025 Annual Report.

In the area of corporate governance, LUKB continues to pursue the goal of positioning itself in the top half of the ranking list of more than 160 Swiss publicly traded companies in the annual corporate governance rating of Inrate AG (zRating study).

Status in 2025

Value creation

The following value-added statement shows that LUKB's economic performance was once again outstanding in 2025. In 2025, LUKB increased its operating income by 6.2 % to 691 million Swiss francs.

Net value added in the 2024 financial year amounted to 558.3 million Swiss francs. Of this, 31.6 million Swiss francs came from the gain on the disposal of the real estate component of Fundamenta and 526.7 million Swiss francs from the ordinary operating business. In the 2025 financial year, the net value added from the operating business increased to 552.2 million Swiss francs (+ 25.5 million Swiss francs or + 4.8 %). Together with extraordinary value added of 0.2 million Swiss francs, net value added totalled 552.4 million Swiss francs in the 2025 financial year.

In accordance with the proposal submitted to the 2026 AGM, the amount of 133.9 million Swiss francs of the net value added will be distributed to shareholders. LUKB paid a total of 38.5 million Swiss francs in the form of direct taxes to the public sector (municipalities, cantons and the federal government) and an additional 11.2 million Swiss francs in the form of compensation for the state guarantee to the Canton of Lucerne. The total amount paid to the Canton of Lucerne and the municipalities of the Canton of Lucerne amounts to around 110 million Swiss francs for the 2025 financial year based on the proposal for the appropriation of profit to the 2026 AGM.

Out of the remaining 380.0 million Swiss francs, 218.4 million Swiss francs are comprised of personnel expenses and 161.6 million Swiss francs of the allocation to reserves and profit carried forward.

Consolidated value-added statement	Unit	2020	2021	2022	2023	2024	2025
Generation of value added
Company performance (= operating income)	CHF thousand	531,092	581,303	585,722	614,856	650,517	690,972
General and administrative expenses	CHF thousand	– 71,092	– 70,897	– 75,456	– 80,187	– 86,770	– 96,771
Compensation for the state guarantee to the canton of Lucerne	CHF thousand	– 8,183	– 9,282	– 9,502	– 10,167	– 10,779	– 11,183
Extraordinary income	CHF thousand	4,400	0	4,281	0	31,580	212
Extraordinary expenses	CHF thousand	0	0	0	0	0	0
Gross value added	CHF thousand	456,217	501,124	505,045	524,502	584,547	583,231
Impairments of investments and depreciation and amortisation of property, plant and equipment and intangible assets	CHF thousand	– 26,208	– 38,055	– 33,554	– 35,443	– 28,913	– 30,349
Changes in provisions, other impairments and losses	CHF thousand	– 3,633	– 2,444	418	6,759	2,711	– 488
Net value added	CHF thousand	426,376	460,625	471,909	495,818	558,345	552,393
Distribution of value added
Employees (personnel expenses)	CHF thousand	171,733	177,944	183,010	192,342	208,991	218,405
Shareholders	CHF thousand	106,122	106,075	106,116	123,364	128 917	133 875¹⁾
of which to the canton of Lucerne (majority shareholder)	CHF thousand	65,241	65,212	65,237	75,841	79 255	82 303¹⁾
Government (direct taxes)	CHF thousand	35,771	36,297	37,294	38,079	37,711	38,491
of which federal taxes	CHF thousand	18,304	18,355	18,996	18,690	18,692	21,323
of which cantonal taxes canton Lucerne	CHF thousand	7,838	7,944	7,659	8,139	8,002	7,276
of which municipal taxes canton Lucerne	CHF thousand	9,238	9,409	9,749	10,298	9,920	8,789
of which state and municipal taxes other cantons	CHF thousand	391	588	891	952	1,097	1,103
Addition to reserves and profit carried forward (self-financing; including allocation to reserves for general banking risks)	CHF thousand	112,750	140,309	145,489	142,033	182,725	161,622
Distributed value added	CHF thousand	426,376	460,625	471,909	495,818	558,345	552,393
Value-added metrics
Gross value added per full-time equivalent	CHF thousand	438	472	468	474	504	489
Net value added per full-time equivalent	CHF thousand	410	434	437	448	481	464
Full-time equivalents (annual average)	FTE²⁾	1,041.1	1,061.7	1,079.3	1,106.4	1,160.0	1,191.7

1)As proposed to the 2026 Annual General Meeting

2)Full-time Equivalents, FTE

The above value-added statement does not include tax paid by LUKB employees or other indirect taxes and duties paid by LUKB.

LUKB's comprehensive commitment to the region is described in detail in the ‘Commitment to the region’ section. In 2025, as in the previous year, LUKB disbursed a total of around 1.9 million Swiss francs in sponsorships in support of sport, cultural events, social initiatives and art.

Further information can be found in the ‘About LUKB’ section of the 2025 Annual Report.

Corporate governance

In the 2025 corporate governance ratings issued by Inrate Ltd (zRating study), LUKB scored 74 out of a possible 100 points (previous year: 72 out of 100 points) and was ranked 24th out of 162 Swiss public limited companies assessed (previous year: 32nd out of 164 companies). It has thus clearly achieved its rating target and is once again among the top companies in the financial services sector.

LUKB's corporate governance is described in detail in the ‘2025 Corporate Governance Report’ of the 2025 Annual Report. The notes to the consolidated financial statements also contain detailed information on risk management at LUKB.