Stock Analysis & Valuation Valiant Holding AG (0QPU.L)

• Previous Close: £155.29
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	321.70	107
Intrinsic value (DCF)	44.74	-71
Graham-Dodd Method	127.20	-18
Graham Formula	549.70	254

Strategic Investment Analysis

Company Overview

Valiant Holding AG is a Swiss financial services provider specializing in retail banking, SME financing, and wealth management solutions. Headquartered in Lucerne and founded in 1824, the bank operates across 14 Swiss cantons, offering a comprehensive suite of services including savings accounts, real estate financing, business loans, consumer credit, digital payment solutions via its mobile banking app, and retirement planning. With a market capitalization of approximately CHF 1.88 billion, Valiant combines regional expertise with modern digital banking capabilities, catering to private clients, affluent individuals, self-employed professionals, and small-to-medium enterprises (SMEs). As a niche player in Switzerland's highly competitive banking sector, Valiant differentiates itself through localized service, conservative risk management (evidenced by a low beta of 0.31), and a focus on community-based banking. The bank’s 2023 financials reflect steady performance with CHF 848 million in revenue and CHF 150 million net income, supported by a robust dividend yield (CHF 11.3 per share).

Investment Summary

Valiant Holding AG presents a stable, low-volatility investment profile within the Swiss regional banking sector, appealing to income-focused investors with its consistent dividend payouts (CHF 11.3/share in 2023) and prudent financial management. The bank’s regional focus and SME lending specialization provide defensive qualities, though growth may be constrained by Switzerland’s saturated banking market and ultra-low interest rate environment. Key risks include exposure to Switzerland’s real estate market (44% of its loan portfolio) and margin pressure from prolonged low rates. With a diluted EPS of CHF 9.52 and a moderate P/E ratio (~12.3x based on 2023 earnings), Valiant is priced as a steady performer rather than a high-growth opportunity. Investors should weigh its reliable yield against limited upside potential.

Competitive Analysis

Valiant Holding AG occupies a middle ground in Switzerland’s banking landscape, positioned between global giants like UBS and hyper-local cantonal banks. Its competitive advantage lies in a hybrid model combining regional intimacy (14-canton coverage) with digital efficiency (mobile banking adoption). Unlike larger peers, Valiant avoids investment banking risks, focusing instead on retail/SME lending—a segment with stable demand but thinner margins. The bank’s CHF 11.8 billion debt load reflects its deposit-funded model, typical for Swiss regional banks, though this also limits balance sheet flexibility. While Valiant’s mobile app modernizes its offering, it lacks the technological edge of neobanks like Neon. Its real estate loan concentration (44% of portfolio) mirrors industry norms but increases sensitivity to Switzerland’s property market corrections. Competitively, Valiant outperforms smaller cantonal banks in digital capabilities but trails larger rivals in product diversity and cross-border services. The bank’s 2023 net interest margin of ~1.5% (implied from revenue/loan book) lags behind Raiffeisen’s 1.7%, suggesting room for operational efficiency gains. Strengths include a sticky SME client base and low customer churn; weaknesses are geographic concentration and reliance on domestic economic conditions.

Major Competitors

• UBS Group AG (UBSG.SW): UBS dominates Swiss banking with global investment banking and wealth management scale, far surpassing Valiant’s regional focus. Post-Credit Suisse acquisition, UBS’s ~CHF 1.6 trillion balance sheet dwarfs Valiant’s (CHF 11.8 billion debt), offering clients broader services but with higher complexity. UBS’s international reach contrasts with Valiant’s localism, though the latter avoids UBS’s regulatory scrutiny and volatility risks.
• Raiffeisen Schweiz (RAHN.SW): Raiffeisen’s cooperative model and 3.9 million members make it Valiant’s closest peer in regional banking. With ~1.7% NIM (2023), Raiffeisen outperforms Valiant’s margin, aided by lower funding costs from its member deposits. However, Valiant’s corporate structure allows for clearer shareholder returns, whereas Raiffeisen reinvests profits. Both share real estate exposure (~50% of Raiffeisen’s loans), but Raiffeisen’s larger network (800+ branches) grants superior local penetration.
• Banque Cantonale Vaudoise (BCVN.SW): This state-backed regional bank mirrors Valiant’s SME focus but with stronger public-sector ties in Vaud canton. BCV’s 2023 CHF 10.4 billion mortgage portfolio (vs. Valiant’s ~CHF 5.2 billion) shows deeper regional concentration. Valiant’s wider geographic spread diversifies risk, but BCV benefits from cantonal guarantees. Both banks face similar margin pressures, though BCV’s 15% ROE (2023) edges Valiant’s ~10%, suggesting better capital efficiency.
• Zurich Cantonal Bank (ZURN.SW): Switzerland’s largest cantonal bank (CHF 200 billion assets) overshadows Valiant in scale and Zurich’s affluent client base. ZKB’s AA+ credit rating (Moody’s) and state backing provide funding advantages, but Valiant’s leaner structure allows quicker SME decision-making. ZKB’s international private banking competes indirectly with Valiant’s wealth services, though the latter targets mass affluent rather than high-net-worth individuals.