2003 Results

BCV GROUP'S NEW STRATEGY BEARS FRUIT: 157 MN NET PROFIT FOR 2003

BCV Group posted very encouraging financial results for the 2003 reporting period. Total income rose 9.9% YoY and stood at CHF 943 mn, while expenses were tightly managed. Gross profit thus rose 21.6%, and amounted to CHF 389 mn. With net provisioning needs sharply down from the year-earlier period, the Group posted a net profit of CHF 157 mn. Several factors were behind these encouraging financial results: the progress made implementing the Bank's strategy, the renewed trust of its customer-base, an uptrend on the financial markets and the committed efforts of the Bank's staff. BCV's Board will thus be able to propose to the AGM that an ordinary dividend of CHF 2 be distributed on common stock, in addition to the preference dividend of CHF 3.33 per participation certificate.

The consolidated income statement for the 2003 financial year shows that the Group's overall situation is generally positive. The change in consolidation method concerning BCV's IT subsidiary Unicible, whose financial results were fully consolidated for the first time in the 2003 Group Financial Statements, did not influence the Group's net profit. Unicible became a wholly-owned subsidiary in June 2002. This change did, however, affect some items in the income statement. Constant scope year-on-year comparative data have thus been provided below to facilitate like-for-like (constant scope) comparisons.

Total Income Up 9.9%
Net interest income held up well in spite of the decline in mortgage lending rates and a voluntary strategic reduction in lending volumes in line with the Bank's re-alignment on core business areas. It amounted to CHF 419 mn during the period under review. Net fee and commission income fell 4.6%, to CHF 288 mn, essentially as a result of strategic withdrawals from ship and petroleum product financing activities as well as from lending to companies based outside Vaud Canton. Commissions and fees on wealth management activities were stable.

Net trading income was up 80.6% YoY and stood at CHF 109 mn for the reporting period, a performance driven by the stock-market upturn in the second half of 2003, improved risk management and better handling of market volatility. Finally, the 89% increase in the item "Other ordinary income" (to CHF 127 mn) relates mainly to the full consolidation of Unicible, which became a wholly-owned subsidiary in mid-2002. At constant scope this item rose 16% from the year-earlier figure.

BCV Group's total income for the 2003 financial year thus amounted to CHF 943 mn, a 9.9 % increase on the previous reporting period (up 5% at constant scope).

Expenses Under Control and Gross Profits Up
Operating expenses were tightly managed during the period under review. Although they were up 3% to CHF 554 mn, if the YoY comparison is made on a like-for-like basis (in terms of the scope of consolidation) they actually fell 2% in 2003. Personnel costs also fell, by 1% to CHF 373 mn (at constant scope): although there was an increase in the variable component of staff salaries in order to bring them in line with market standards, its effect on personnel costs was more than offset by reductions in the Group headcount. Other operating expenses fell 5% and stood at CHF 182 mn.

The Group employed a total workforce of 2,483 full-time equivalents (FTEs) as of 31 December 2003, or 196 (7.3%) fewer than the year-earlier figure. The parent company's staff numbered 1,863 FTEs at the end of the reporting period, which was 153 (or 7.6%) fewer than at end-2002. The parent company has thus attained its strategic staffing objective of no more than 1900 FTEs by end-2003.

Gross Profit Up 21.6%; Net Profit: CHF 157 mn
Increased revenues combined with effective cost control were behind a 21.6% rise in gross profit, which amounted to CHF 389 mn for the period under review. Provisioning needs were reduced, and totaled CHF 77 mn. Depreciation and write-offs were up 40%, to CHF 151 mn, mainly due to goodwill impairment charges on some of the parent company's holdings.

After two straight years of net losses, the Group posted a profit of CHF 157 mn for the 2003 reporting period. This represents a very encouraging performance, given the economic environment and the efforts entailed by the Bank's strategic re-alignment

Ordinary Dividend of CHF 2 Per Common Share
The 2003 net profit is sufficient to allow the Board to propose that an ordinary dividend once again be distributed on common stock, after distribution of the preference dividend on the participation certificates (CHF 3.33 per certificate). The ordinary dividend proposed has been set at CHF 2 per common share.

Changes in the Balance Sheet in Line with Strategy
Total assets on the Group balance sheet fell 2.5% to CHF 34.3 bn, which was in line with Management's guidance predicting a decline in assets as a result of the Group's strategic re-alignment on core areas of business.

On the assets side, "Loans and advances to customers" declined the most (down 21%, to CHF 7.3 bn). The drop was due entirely to the Bank's strategic re-alignments and reductions in the volume of non-performing loans. Strategic withdrawals from international financing (oil), ship financing and lending to companies based outside Vaud Canton totaled roughly CHF 1.6 bn. The planned withdrawal from ship financing will soon be fully implemented, although the Bank will continue with government-guaranteed financing activities concerning the Swiss merchant marine. In addition, BCV succeeded in increasing its market share in the highly competitive local mortgage-lending sector in 2003.

On the liabilities side, the numbers brought positive proof that BCV's customer-base has renewed its trust in the Bank. Customer savings and investments accounts increased by 4.9%, and amounted to CHF 8.7 bn. In addition, the Bank was able take advantage of its limited re-financing needs and the ample liquidity brought in by the recent recapitalization to reduce borrowings by CHF 1.6 bn.

Lausanne, Switzerland, 9 March 2004

Contact(s)

Pascal Kiener, Chief Financial Officer
Phone +41 21 212 33 00
E-mail

Daniel Herrera, Head of Communications
Phone +41 844 228 228
E-mail

Wilhelm Blaeuer, Investor relations
Phone + 41 21 212 20 71
E-mail