Strong first-half results Gross profit up 9%*

BCV Group has posted strong half-yearly financials, with increases in both revenues and gross profit. The increase in revenues (+5% YoY to CHF 592m) combined with rigorous cost control underpinned a 9% rise in gross profit (to CHF 308m). Net profit fell slightly (-7%) as a result of the expected decline in extraordinary non-recurring items, including tax-credit carry-forwards. The bottom line nevertheless held strong at CHF 318m.

Revenues up 5%

First-half revenues amounted to CHF 592m, a rise of 5% YoY. Most of the Bank’s revenue streams posted gains. In a very competitive environment, net interest income – the Bank’s main revenue source – rose by 6% to CHF 255m. Fee and commission income was up 7% to CHF 193m on the back of favorable stock market conditions. Trading income increased by 5% to CHF 54m. Other ordinary income held steady at CHF 90m.

Gross profit up 9%

In spite of growth in business volumes, total operating expenses were well under control during the reporting period, rising only 1.5% to CHF 284m. Personnel costs declined by 1% YoY to CHF 185m, while other operating expenses rose 6% to CHF 99m. The significant increase in revenues combined with effective cost control drove gross profit up 9% to CHF 308m and led to an improvement in the cost/income ratio (from 58% to 56%).

Net profit down 7%

Value adjustments, depreciations and write-offs held steady during the period, but extraordinary income was down compared with H1 06. This stems from the expected decrease in impaired-loan reductions, which led to a 29% YoY decline (to CHF 90m) in provisions released to the income statement in H1 07. In addition, as the tax credit relating to the losses posted in 2001 and 2002 has now been drawn down, the Bank’s tax liability has increased by CHF 12m (to CHF 23m) compared with H1 06. As expected, these factors led to a decrease in net profit, which fell slightly 7% YoY but nevertheless stood at a strong CHF 318m.

Growth in total assets and AuM

Total assets increased by 6% to CHF 35bn, mainly as a result of the growth in lending and trading activities.

Among items on the assets side, mortgage lending expanded by 1.1% (or CHF 186m) to CHF 16.7bn. Excluding the reduction in impaired loans, mortgage lending was up 1.4% (CHF 235m). Commercial loans rose 5.0% (or CHF 250m); excluding impaired-loan reductions, this item was up 7% (or CHF 386m). Growth in trading activities and favorable stock market trends were behind a CHF 494m increase in trading portfolio assets as well as a rise of CHF 555m in the replacement values of derivative financial instruments (carried under “Other assets”).

On the liabilities side, customer accounts were up by 4.4% or CHF 824m. Savings deposits showed a slight decline (down 2.3% to CHF 8.3bn), which reflected growing interest in other forms of investment such as investment funds and structured products. Mirroring developments on the assets side, the item “Other liabilities” registered an increase of CHF 66m as a result of rises in the replacement values of derivative instruments.

The Group's assets under management grew by 5.4% to CHF 85.2bn, with net new funds amounting to CHF 1.74bn.

Favorable outlook

Barring major changes in the economic environment or in the direction of financial markets, BCV confirms its guidance of a YoY improvement in gross profit for 2007. However, the year-end percentage increase should be smaller than those achieved in H1 07 and in FY 06.

Lausanne, Switzerland

21 August 2007

Contact(s)

Christian Jacot-Descombes, Press Officer
Phone + 41 21 212 28 61
E-mail

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

This press release is being issued outside the trading hours of the SIX, Swiss Exchange in order to comply with the principles of ad hoc disclosure pursuant to the SIX listing rules.

The above text is a translation of the original French document entitled “Communiqué de presse – Groupe BCV: très bons résultats au 30 juin 2007 avec une augmentation du bénéfice brut de 9%*.” Only the French version is authoritative.

*Unaudited figures