BCV Group's business volumes remained on an upward trend in H1 2013. The low-interest-rate environment and the Bank’s voluntary cap on growth in mortgage lending continued to weigh on revenues, but earnings remained in line with previous years thanks to firm cost control. Operating profit was down slightly to CHF 237m (–2%) and net profit declined 4% to CHF 151m.*
Revenues down slightly in a challenging environment
Total revenues edged down 2% year-on-year to CHF 498m. Interest income fell 6% to CHF 248m, reflecting the Bank’s prudent liquidity management, its voluntary cap on growth in mortgage lending, the continuing low-interest-rate environment, and the cyclical downtrend in trade finance activities. Fee and commission income held steady at CHF 173m, with strong traction in wealth management driven by rising financial markets and client transaction volumes offsetting the decline in trade finance activities. Trading income climbed by 6% to CHF 59m, mainly thanks to increased structured product issuance.
Operating profit at CHF 237m
To limit the impact of the decline in revenues, the Group held down operating expenses, resulting in a decrease of 2% to CHF 261m. Personnel costs dropped 2% to CHF 166m (–CHF 4m) and other operating expenses were down 1% to CHF 95m. Operating profit fell 2% to CHF 237m; this slight decrease reflected both the Group’s stringent cost control and the downward pressure on revenues.
Net profit at CHF 151m
Depreciation and write-offs were stable at CHF 44m. Value adjustments, provisions and losses amounted to CHF 8m, including CHF 6m for BCV’s share of the payment set out in the tax agreement between Switzerland and the UK. Extraordinary income came in at CHF 10m, reflecting a real-estate disposal in connection with the relocation of Group subsidiary Piguet Galland & Cie SA’s activities to a single site in Geneva. Net profit declined 4% to CHF 151m. The cost/income ratio held steady at 61%.
Continued growth in customer-driven business volumes
Total assets expanded 1% to CHF 40.4bn. Mortgage lending rose 1% (+CHF 246m) to CHF 23.1bn, in line with the Bank’s controlled growth target in this area. Other loans increased by 4% to CHF 5.3bn.
On the liabilities side, the expansion in customer savings and investment accounts continued, with a strong 3% rise (+CHF 386m) to CHF 12.7bn. Other customer accounts grew by 5% (+CHF 808m) to CHF 15.7bn.
Rise in AuM and inflows of CHF 1.1bn in onshore funds
Group assets under management (AuM) were up 3% (+CHF 2.7bn) to CHF 84.4bn. Net new funds amounted to CHF 0.54bn for the period. This figure reflects onshore fund inflows of CHF 1.1bn and offshore fund outflows, as anticipated (–CHF 0.56bn).
CHF 275m paid out to shareholders
In accordance with the capital-management strategy set for the next 5 years, BCV returned a total of CHF 32 per share, or CHF 275m, to its shareholders in May.
Solid financial position
Equity capital remained at a comfortable CHF 3.2bn, equating to a CET1 ratio of 17.8%, which attests to the Bank’s financial solidity. Following its decision to upgrade Vaud Canton’s rating to AAA, Standard & Poor’s announced in its 14 June press release that it was upgrading the Bank’s outlook from negative to stable and kept BCV's long-term credit rating at AA. This cemented BCV's position as one of the world’s best-rated financial institutions.
Successful transfer of IBM employees
As announced in December 2012, 80 IBM specialists were transferred to BCV on 1 July 2013 to continue working on maintenance and development of the Osiris platform. This will help to slightly reduce IT costs and give the Bank more control over platform development. IBM will remain BCV’s provider of IT hosting services as well as certain other projects and consulting.
Barring a significant deterioration in the financial markets and the overall economic situation, business development in H2 2013 is expected to trend along the same lines as in the first half.
Lausanne, Switzerland, 22 August 2013
* Unaudited figures.
Christian Jacot-Descombes, Press Officer
Phone +41 79 816 99 30
Gregory Duong, Investor Relations Officer
Phone + 41 21 212 20 71
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.