Letter from the Board of Directors and the Executive Board

Dear Shareholders
Dear Readers

2025 was an important year for LUKB. We concluded our 2021-to-2025 strategy period and clearly exceeded all long-term targets. At the same time, we celebrated our 175th anniversary with the people of Lucerne.

With consolidated profit of 295.5 million Swiss francs in 2025, we achieved the best annual result in our history. In 2025, we achieved a 3.1 % improvement versus the 2024 annual result (286.6 million Swiss francs). Over the entire five-year strategy period, with cumulative net profit of 1,370.5 million Swiss francs, we exceeded the corresponding target range of 1,260 to 1,330 million Swiss francs, which was increased twice during the strategy period.

This achievement is all the more remarkable in view of the high market volatility, geopolitical uncertainties and low key interest rates of the past year.

Challenges of the zero-interest-rate environment successfully mastered

The extraordinary market and interest rate environment had a substantial influence on our Bank's results. This is particularly evident in the interest business. The fact that, despite the worst conceivable scenario with zero interest rates since last June, net interest income grew by 3.2 % to 458 million Swiss francs (2024: 444 million Swiss francs) is primarily thanks to our very active and successful interest rate management and the growth in loans to clients (+6.9 %).

Although this growth is above the original growth target of 2.0 % to 3.75 %, it is well aligned with the new regulatory requirements of Basel III final (capital requirements). In 2025, for example, we increased the total capital ratio from 18.5 % to 20.6 % and the Common Equity Tier 1 (CET1) ratio from 13.9 % to 14.7 %.

Non-interest business further strengthened

Our aim is to diversify income more broadly. For 2025, we had set ourselves the goal of generating non-interest income of at least 215 million Swiss francs. We were successful in achieving this goal. Compared to the previous year, we posted strong growth in the commission and service business (+10.1 % to 143 million Swiss francs) and in trading income (+34.5 % to 76 million Swiss francs). Both operating income components were boosted by the volatile markets and the generally positive developments on many stock exchanges over the year. With income from non-interest business totalling 233 million Swiss francs (2024: 207 million Swiss francs) we clearly exceeded our ambitious target of 215 million Swiss francs.

Cost discipline remains high

We reported operating income of 691 million Swiss francs (+6.2 %) for the past year. Operating expenses rose by 6.5 % to 326 million Swiss francs in the same period. As a result, the cost-income-ratio for the 2025 financial year was unchanged from the previous year at 46.1 %. This demonstrates once again that our Bank is highly efficient and is well below its own strategic target of a maximum of 50 %, making it one of the most efficient full-service banks in Switzerland.

Higher distribution proposed

LUKB's strong performance was recognised by the capital markets in 2025. Recording a gain of around 45 %, our share was one of the top performers in the Swiss Performance Index.

As shareholders, you should also benefit from the excellent annual result for 2025. At the Annual General Meeting of 13 April 2026, the Board of Directors will propose increasing the distribution from 2.60 Swiss francs to 2.70 Swiss francs per LUKB registered share – half as a dividend and half as a tax-free distribution from capital contributions. This underscores our policy of distributing 43 % to 50 % of profit to shareholders, while at the same time securing sufficient equity capital for our future growth. Together with the taxes and compensation for the state guarantee, the Canton of Lucerne will receive more than 100 million Swiss francs for the first time, with its 61.5 % stake.

Celebrating our bond with Lucerne

Around 30,000 visitors celebrated the bond between the people of Lucerne and our bank at five events. Almost 100 associations and businesses from Lucerne were involved as partners in the attractive anniversary programme. This commitment to our home canton is an expression of our gratitude for our 175-year success story as well as a promise for the future.

Smooth transition to the new strategy period

Thanks to the extremely successful conclusion of the anniversary year and the five-year strategy period, we are starting the new strategy period from a strong position. Our business model, which combines the accessibility of a cantonal bank with the networked expertise of a large bank, offers considerable potential for growth and scaling. Many of the strategic investments made in recent years will only take full effect in the years to come.

Consolidated profit for 2026 above previous year's level

In spite of the zero-interest-rate environment and significant investments, we expect consolidated profit to be above the previous year's level for the current year (2025: 295.5 million Swiss francs).

Among other things, we want to increase income from non-interest business to at least 240 million Swiss francs in 2026 (2025: 233 million Swiss francs). The growth we are pursuing in asset advisory and asset management mandates of at least 1.2 billion Swiss francs will make an important contribution to this. Overall, we expect these earnings figures to be able to compensate well for the planned expenditure increase.

True to the principle that results follow effort, we will make significant investments in 2026 to launch our new five-year strategy. You will be able to see one of these investments at the Annual General Meeting on 13 April 2026 in the form of an updated brand image.

Watch this space!

Yours sincerely

Markus Hongler

Chair of the Board of Directors

Daniel Salzmann

CEO

Lucerne, 12 March 2026