BCV's capital increase

Private shareholders purchased roughly 10% of the shares made available during BCV's recapitalization, which came end on 30 July. Vaud Canton therefore now holds around 68% of the Bank's share capital.

The timing of BCV's capital increase subscription period was rather unfortunate, as the markets were unremittingly unfavorable during the period. Private investors purchased 176,788 new shares at CHF 125. - nominal value. This represented 9.4% of the 1,881,552 shares available to them. The total amount brought in by these subscriptions thus came to CHF 30 million, or 4.7% of the issue total.

A combination of factors is behind this result. First, panicky markets and negative sentiment as regards stock-market investments in general never let up during the issue period. Second, BCV released its first-half results just before the issue, and they were significantly below expectations. The combined effect of these two factors pushed BCV's share price below the issue price of CHF 170.-, where it stayed for practically the entire subscription period. Investors therefore bought shares on the market rather than via the issue.

As agreed on 25 June 2002, Vaud Canton subscribed for 3,595,692 shares, for a total of CHF 611.3 million. Vaud Canton's total stake in BCV now amounts to 5,762,252 shares, or 67.89 % of BCV's share capital. It should be pointed out, however, that the cantonal government has made it known that Vaud does not intend to keep its entire stake in BCV indefinitely. The Canton's long-term goal is to hold only the majority stake of 50.12% it has held until recently, and Vaud has thus earmarked the 1,508,026 extra shares as an investment to be sold once market conditions are propitious.

Lausanne, Switzerland.
9 August 2002