BCV (Parent Company) in H1 2002

RESULTS LOWER THAN EXPECTED

As of 30 June 2002, BCV's income from interest operations did not vary considerably from that posted in H1 2001 (down 2%, to CHF 205 million). These numbers are in line with forecasts, and show an improvement in the interest margin, to 1.19%. Interest operation business has been stable throughout the year. Commission income came to CHF 110.8 million, down 4% y-o-y. This is mainly due to the skittishness of investors faced with unfavorable conditions on the markets. Trading income was markedly superior to that for 2001, at CHF 32.3 million, on the back of lower capital losses and excellent performance in forex operations. Other ordinary income dropped considerably in H1 2002, to CHF 34.5 million. Finally, BCV has succeeded in controlling operating expenses, which dropped by 7%, to CHF 223.7 million, in the period under review. This mainly reflects a decline in personnel expenses.

Gross profits for BCV's Parent Company in H1 2002 thus amount to CHF 159 million, as against CHF 225.5 million in H1 2001. The decline of 29% is essentially due to the non-recurrent nature of the profit-taking on the Orange Communication stake in 2001 and the bearishness of the markets in 2002.

The Bank made a net loss of CHF 81.9 million in H1 2002, as increased provisioning needs entailed an allocation to the item "valuation adjustments, provisions and losses," bringing this item to CHF 197.9 million. This net loss may be explained by two unexpected developments: first, there was the impact of the RBG Resources Plc / Allied Deals Plc affair, which the Bank has already made public; second, the Bank's local borrowers, borrowers who had in fact already been identified by the Bank as being problematic, have seen their situation worsen. The Bank has had to take account of this unforeseen situation by increasing provisions to levels above what had been expected.

Balance Sheet
As of end-June 2002, the balance sheet total had dropped 3%, to CHF 34.48 billion, compared with end-2001.

On the assets side, this is due to marked declines in the items "Cash" and "Due from Banks." Lending to clients, both in commercial credit and mortgage loans, also fell, by 4% to CHF 24.7 billion. This may be explained by the generally gloomy economic climate.

On the liabilities side, savings continue to decline. The "Due to clients" item has thus dropped by 3% to CHF 16.3 billion, while the "Due to banks" item declined sharply, by 27%, to CHF 2.6 billion.

Forecast for 31 December 2002
The information provided by the Bank relative to its capital increase, which begins on 18 July, included the prediction that there will be a small net profit on the current fiscal year. However, given the results in H1, BCV'S net full-year results will be in the red by CHF 90 million. This will also affect the shareholders' equity ratio at 31 December 2002, which should correspond to about 110% of Swill legal requirements, on a consolidated basis. The objective to cover a ratio 120% is maintained.

Capital Increase
The capital increase will take place within the set conditions and deadlines, Deutsche Bank acting as BCV's global coordinator. In addition, the Vaud Government has committed itself to buying back all preferential subscription rights not exercised by shareholders.

Lausanne, 17 July 2002