BLKB Undertakes Major Restructuring, Liquidates Legacy Investments After Radicant Failure
Basel-Landschaft, Switzerland – The Basellandschaftliche Kantonalbank (BLKB) is aggressively dismantling a portfolio of investments linked to its former CEO, Johannes Häfelfinger, signaling a significant shift in strategy and a reckoning with past ventures. The move, announced today, comes as the bank delays its annual report publication by twenty days, citing “regulatory deadlines” related to the ongoing liquidation of the failed neobank, Radicant.
The BLKB is undergoing a period of significant change, shedding projects tied to its previous leadership. (Image credit: Kenneth Nars)
Radicant’s Rapid Demise and the Broader Clear-Out
Radicant, once touted as BLKB’s foray into the digital banking world, was shuttered last November after attempts to find a buyer proved unsuccessful. The liquidation is expected to cost BLKB an additional 60 million francs. However, Radicant isn’t the only casualty. The bank is also dissolving Servicehub, a bancassurance platform designed to cross-sell insurance products to mortgage holders. Despite positive reports from a University of Lucerne professor, Servicehub failed to gain traction, ultimately costing BLKB a “low single-digit million amount.” The project, launched in 2018, was effectively abandoned in 2021 when its IT partner departed, but the formal liquidation is only now underway.
Beyond Radicant and Servicehub: A Portfolio Under Review
The BLKB’s reassessment extends to other ventures. Inqbator, a company aimed at supporting startups in northwestern Switzerland, has seen BLKB sell its third stake, though the selling price remains undisclosed. A stake in Swisspeers, a Zurich-based SME credit platform, is also under scrutiny, though no immediate changes are planned. Swisspeers, currently unprofitable, is subject to ongoing review.
True Wealth: A Bright Spot in a Sea of Red
Amidst the liquidations, one investment stands out: True Wealth, an online wealth manager. BLKB holds a 40% stake in the company and serves as one of its custodian banks. True Wealth has seen significant growth, managing assets worth two billion francs for 35,000 customers. This success offers a stark contrast to the fate of Radicant, which BLKB once hoped would achieve similar results. This highlights a key lesson in fintech investment: not all digital disruption is created equal.
The Importance of Strategic Alignment in Banking
The BLKB’s current situation underscores the critical importance of strategic alignment in the banking sector. Cantonal banks, often deeply rooted in their regional economies, face unique challenges when venturing into new markets or technologies. Diversification is important, but it must be coupled with rigorous due diligence and a clear understanding of market demand. The failure of Servicehub, despite favorable academic assessments, demonstrates that even well-researched projects can falter without real-world adoption. This also speaks to the broader trend of banks reassessing their fintech investments in the current economic climate, prioritizing profitability and sustainable growth over speculative ventures.
The BLKB’s actions are a clear signal that the bank is prioritizing stability and profitability. By shedding underperforming assets and focusing on successes like True Wealth, BLKB aims to navigate the evolving financial landscape and deliver value to its stakeholders. The delayed annual report and the ongoing liquidation process are undoubtedly challenging, but they represent a necessary step towards a more focused and sustainable future for the Basellandschaftliche Kantonalbank. Stay tuned to Archyde for further updates on this developing story and in-depth analysis of the Swiss banking sector.
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