The BCV Group in 2000

ANOTHER SUCCESSFUL YEAR

The BCV Group had a very positive financial year 2000. Operating income - interest and commission - saw a gratifying advance both at the bank and in its affiliate companies. Despite the rise in expenses over 1999, gross income improved 12%, allowing increased provision needs to be covered while leaving net earnings up over 9%.

A brisk rise in income
Total net income came in at CHF 978 million, 12% up on the figure for 1999. Income from interest operations (+12.6% to 412.7 million) reflects the increase in the volume of business on the balance sheet, together with the continued slow improvement in the margin in percentage terms. The increase in revenue from commission operations (+19.9% to 331.2 million) comes partly from the strong expansion of international commodity trade financing business, and partly from the growing success of the asset management business within the Group. The investment fund management company Gérifonds and banks Piguet & Cie and Galland & Cie, in particular, had a very successful fiscal year. Trading operations turned in a result considerably lower than in 1999 (-44.3% to 89.3 million) as a result of the sharp drop in gains on securities portfolios. However, income from forex and derivatives operations was up strongly. Other ordinary income, which came in at CHF 145 million (+105.7%), comprised mainly the profit on sale of shares held for a long period in financial investments. Operating expenses totaled 504.8 million, 12% more than in 1999, under the impact of the increase in the Group’s staff numbers, the profit-related variable component of wages, and IT costs.

Gross profit came in at CHF 473.7 million last year, 12% up on the previous year. After deduction of depreciation and write-offs (+3.1% to 97 million), valuation adjustments, provisions and losses (+17.7% to 220 million) and taxes (+13% to 39.6 million), and addition of a net extraordinary income of 48.5 million, the Group’s net profit stood at CHF 165.7 million (+9.2%) for fiscal 2000. The proposed distribution of profits, to be put before the general meeting of shareholders on 21 June 2001, is as follows: payment of an unchanged dividend of CHF 17.50 per share and allocation of 74 million to reserves, versus 48 million in 1999. The Board of Directors’ aim is to reinforce equity with a view to providing for the Group’s development.

The balance sheet continues to expand
The balance-sheet total increased by CHF 2.98 billion, or 8.5%, to 37.96 billion. Part of this increase is linked to short-term movements in interbank operations. Business with non-bank clients increased less substantially. Deposits and borrowings increased by 1.46 billion, or 5.5%, overall, and stood at CHF 27.7 billion at 31 December. The drop back in savings (-7% to 8.64 billion) accelerated over 1999, as in the banking system as a whole, whereas cash bonds (-16.3% to 657 billion) fell more moderately on account of the interest rise effect. Conversely, sight and term deposits increased substantially (+20.1% to 8.64 billion), as did borrowings on the capital markets (+8.8% to 9.77 billion). Total loans (+2.2% to 26.24 billion) saw a modest increase, in line with the general trend on the Swiss market. Mortgage loans dipped slightly (-0.5% to 15.55 billion), as new business was offset by the volume of amortisations and reimbursements. Other amounts due from clients increased by CHF 647 million, or 6.4%, totalling CHF 10.69 billion at the end of the fiscal year.

BCV’s first official rating
In the second half of 2000, BCV applied to Standard & Poor’s for an official rating for its short- and long-term debt. On the basis of the evaluation procedure conducted by this company, it granted the bank an A- ranking for its long-term liabilities and A-2 for short-term ones. This rating can be considered balanced inasmuch as it takes into account the substantial improvement in ROE over recent years, but also the absence of a State guarantee and the need to complete the process of upgrading the loan portfolio.

Outlook 2001
Given the current economic and financial uncertainties, caution is in order. The horizon could, however, brighten in the coming months with the expected fall in interest rates in the US, then in Europe, which will improve the economic outlook and the stock-market climate. In this context, BCV’s business and results should continue on a positive trend, albeit with growth rates below those of last year.

Lausanne, 20 March 2001