BCV Group at 30 September: the market weighed on results

As for the whole banking sector, the third quarter of this year was marked for the BCV Group by lower results, caused essentially by decreases in value recorded on securities portfolios. On the operating level, the performance was globally satisfactory. While it is difficult to predict where full-year gross profit will stand, being sensitive to stock market fluctuations, one should nevertheless expect a fall of around 30% compared with last year's record high results.

On the occasion of a meeting with the media taking place today, BCV is releasing the Group's financial statements at 30 September 2001. These show a balance sheet total almost unchanged compared with 31 December 2000. On the liabilities side, the decline in savings and cash bonds slowed down sharply and, overall, deposits and borrowings rose 1.3% over the first nine months of the year. On the assets side, the volume of credits remained stable, the increase in mortgage loans having been offset by a fall in other amounts due from customers. As regards its loan portfolio, which is still marked by the economic slump that the Canton of Vaud experienced in the nineties, BCV is armed with an efficient system to identify credit risks. However, it noted that the total of non-performing loans did not fall at the desired pace. Consequently, the Bank decided to analyse, in agreement with the Swiss Banking Commission, its method of provisioning and to carry out a study, undertaken jointly with its external auditors and another specialised firm, to be completed by the end of this year. Roughly speaking, it aims at laying firmer foundations for the development of its businesses and a valorisation of its stock on the market that reflects the bank's true potential. Depending on the study's conclusions, the measures that might be taken as a result of the study will be decided in the framework of the closing operations for fiscal 2001.

Assets under deposit suffered from bearish stock markets and, with a total of 53.1 billion francs, were down 16% from a year earlier, in line with the general trend in the banking sector. The slight rise in the number of securities deposits indicates that there was no loss in customers.

As far as results are concerned, income from interests continued its advance (+6%, against 30 September 2000, to 324 million). Commissions recorded a decline of 13% to 219 million francs. The fall reached somewhat more than 20% in the area of wealth management, but was partially offset by a sharp increase in commissions on loan operations, thanks to the expansion of documentary credits. Trading operations showed negative results of 51 million and other ordinary results, amounting to 84 million, came in below the financial statements at 30 June by 50 million. These two movements can be explained by the stock market downturn that marked the third quarter and, more particularly, the month of September. Total income came in at 576 million (-19%), while operating expenses, which totalled 381 million francs, were up 2.9%. Gross profit came in at 195 million, down 43% from the first three quarters of 2000.

For 2002, the BCV Group forecasts a marked improvement in results, within an economic and financial environment that will pick up in the course of the year. Interest margins will probably remain close to the levels of 2001. Commissions, as well as trading in securities, currencies and derivatives, should perform far better than this year. Only other ordinary results, which have registered an extraordinary income this year, will be lower in 2001. As for expenses, they should rise modestly, allowing gross profit to cross the CHF 400 million mark again.

Lausanne, 20 November 2001