New strategy, new organization: BCV moves ahead ambitiously

Based on its model as a universal bank with a strong community presence and in line with its ambitions and corporate mandate, BCV plans to move forward by focusing on its traditional strengths: banking services for local residents and SMEs, and private and institutional asset management. Backed by a clear vision, the Bank intends to win market shares and will therefore adapt its organization through four increasingly customer-oriented front-line divisions and set up a single division dedicated to credit underwriting.

Solid foundations

BCV has recovered well following the crisis it experienced in 2001 and 2002. After improving the structure of our balance sheet, strengthening our financials, and divesting all of our foreign holdings, we upgraded our retail network, restored our image and increased customer loyalty. In a highly competitive environment, the CroisSens growth project launched in 2006 enabled the Bank to offset market-share losses stemming from the crisis and lay the foundations for sustainable growth. Having successfully completed its financial and strategic turnaround, BCV will now focus on business expansion.

The right business model

After considering various alternatives, the Bank's top management has concluded that the business model of a universal bank with solid local roots – offering core banking services enhanced by certain diversified activities like trade finance and e-SIDER.COM – is most appropriate to ensure profitable growth in the coming years. BCV therefore intends to strengthen its position as a full-service bank in the Vaud region and be recognized as a leading financial institution in Switzerland, particularly for private and institutional asset management.

Clear development priorities

The Bank has set priorities within its business lines in order to enhance growth and optimize its risk profile. We are targeting:

• renewed impetus in retail banking, particularly mortgage lending, by improving commercial efficiency and tapping into the potential inherent in our large client base;
• growth in private wealth management, primarily in Vaud Canton, and institutional asset management countrywide;
• a greater role for SME-related activities;
• a significant reduction in proprietary risk-taking in trading activities, which will now center on customer-driven business volumes. We are withdrawing from proprietary equity-derivatives trading;
• an improvement in the profitability of the Trade Finance and Large Corporations business lines together with the development of their activities in keeping with the Bank's risk profile.

The pace at which these strategic initiatives are implemented will be influenced by the economic environment.

Improved execution for customers

Quality of execution is a key factor of differentiation and success in a mature services industry such as banking. With this in mind, BCV will launch a series of internal initiatives to simplify processes, develop its employees' skill sets, improve customer service and revitalize its commercial approach. These improvements, which will affect all the Bank's business lines, will take place over several years.

Stable and high dividend, equity optimization

The new strategy will allow the Bank to achieve sustainable growth and improved stability in its financial results. We aim to distribute a stable ordinary dividend, set to rise slightly depending on business growth, with the payout ranging from CHF 20 to CHF 25 per share over the coming years.
As active capital management is one of the cornerstones of its new strategy, the Bank will optimize its equity by making an additional annual distribution of CHF 10 per share.
Barring any significant changes in the economic environment or the Bank's financial situation, BCV intends to maintain this distribution level for the next five to six years. This should enable us to bring our SFBC capital adequacy ratio to 145%.
With its new strategy, the Group aims to expand revenues by 4-5% and gross profit by 5-8% per year. Over the long term, the Bank is targeting a return on equity of 13-14%, a cost/income ratio of 57-59% and a Tier 1 capital ratio of 12% (in the current regulatory environment). As the ongoing financial and economic crisis is likely to have a short-term effect on these indicators and on our results, particularly in 2009-10, these objectives should be viewed from a long-term perspective.

Customer-oriented organization

As dictated by the logic of the Bank's strategy, front-line operations will be organized in four divisions with a resolutely client-oriented approach. A private banking division* will be created; its specific focus on private clients will facilitate business acquisition and development. An asset management/trading division* will also be formed, encompassing activities related to asset management and the Bank's investment policy, together with operations handled by the current Trading Division. A new credit division*, to be headed by the Bank's Chief Credit Officer, will take over responsibility from the Corporate Banking Division for analyzing and administering credit business. As a result, credit operations will have direct representation on the Bank's Executive Board; this underscores the importance of credit decisions in the new organization.

Two new Executive Board members

The Board of Directors has appointed Serge Meyer to the Executive Board as head of the new credit division, while Thomas W. Paulsen, the Bank's Chief Risk Officer, has been named Chief Financial Officer and Executive Board member responsible for the Finance & Risks Division. Mr. Meyer and Mr. Paulsen will take up their new posts on 1 January 2009. BCV has not yet named the heads of the private banking and asset management/trading divisions, which will be formed once the new appointees commence their duties. Christopher E. Preston, Executive Board member and head of the current Wealth Management Division, will remain with the Group; he will take over as CEO of subsidiary Banque Piguet & Cie SA at the end of March 2009 with the mission of significantly expanding business volumes. Olivier Cavaleri, Executive Board member and current head of the Bank's Trading Division, has chosen to leave BCV and pursue a new career path. The Board of Directors and Executive Board extend their thanks to both Mr. Preston and Mr. Cavaleri for their service to the Bank and wish them every success in their future endeavors.

* The new division names are provisional.

Lausanne, 25 November 2008

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; only the French version is authoritative.

Enclosures:

Serge Meyer, head of the new credit division
Mr. Meyer joined BCV as Chief Credit Officer in March 2005. He is in charge of credit analysis and decision-making relative to both private and corporate clients, financial institutions and international trading companies. He also oversees all credit-issuing activities. Before moving to BCV, Mr. Meyer held key positions at SBC and UBS in Switzerland and abroad, including the USA. A French-Swiss national, he is 54 years old and holds an economics degree from Lausanne University and an MBA from INSEAD in Paris.

Thomas W. Paulsen, new CFO
Mr. Paulsen joined BCV in July 2002 as Chief Risk Officer (CRO), creating the Bank's risk management department and driving the improvement of the Bank's risk management with regard to its risk governance, as well as its risk methods and systems. He also initiated and piloted BCV's admission to the Internal Ratings-Based (IRB) approach under the Basel II agreement. Mr. Paulsen started his career in 1992 as head of energy controlling at Elektrowatt (Laufenberg). From 1995 to 2002, he worked as a consultant for McKinsey & Company (Geneva), where he managed a large number of projects for various financial institutions. Within McKinsey, he was a member of the steering committee of the European risk management practice. Mr. Paulsen is 43 years old and holds a master's degree in economics from the London School of Economics and a PhD in economics from Lausanne University.

Christopher E. Preston, new CEO of subsidiary Banque Piguet & Cie SA
Mr. Preston has been a member of BCV's Executive Board and head of the Wealth Management Division since 1 January 2004. He began his career in 1976 at Camper & Nicholson Ltd, working in the UK and Monaco. He joined Bank of America in 1980, working in London in the areas of lending, capital markets and trading. In 1988, he was appointed General Manager of BA Finance (Suisse) SA before becoming Country Manager for Switzerland in 1989. He was Manager and Country Treasurer for Germany between 1992 and 1993. In 1994, Mr. Preston joined the Executive Board of Rothschild Bank AG, Zurich, initially as Chief Financial Officer and subsequently as Head of the Private Banking Division. He moved to Citigroup Private Bank in 2001, where he held the posts of Chairman of Citigroup Suisse SA and Head of the Private Banking Division for Europe and the Middle East. Mr. Preston, a dual Swiss and British citizen, is 54 years old and has a law degree from the University of Southampton (UK) and an MBA from Cranfield School of Management and INSEAD.

Organization chart