BCV Group delivered solid 2016 results in a challenging environment. Due to persistently negative interest rates and lackluster financial markets, revenues declined 6% to CHF 967m and operating profit dropped 4% to CHF 383m. As expected, net profit came in below the 2015 figure, which was pushed up by non-recurring items. It fell 8% to CHF 310m, which is nevertheless higher than in 2013 and 2014. At the next Annual Shareholders’ Meeting, the Board of Directors will propose an ordinary dividend of CHF 23 per share and a special distribution of CHF 10 per share out of paid-in reserves, in accordance with the Bank’s distribution policy. If the proposals are approved, the Group will pay out a total of CHF 284m to shareholders.
Revenues down in a difficult environment
Total revenues fell 6% year on year to CHF 967m despite slightly higher business volumes. In an environment marked by continued negative interest rates, which the Bank does not pass on to the great majority of its customers, net interest income before loan impairment charges/reversals edged down 1% to CHF 483m. Net interest income dropped 3% to CHF 478m owing to new provisions for credit risk. Commission and fee income decreased 7% to CHF 308m, reflecting a contraction in client trading volumes caused by lackluster financial markets, the end of BCV’s online brokerage partnership with PostFinance, and a realignment of the Bank’s cross-border wealth management business on a select group of countries. Net trading income, which derives mainly from client forex trading activities, remained solid at CHF 139m. This figure is down 7% from 2015 due to a spike in business in January and February 2015 after the Swiss National Bank (SNB) dropped the EUR/CHF currency floor. Other ordinary income came in at CHF 42m, a 20% year-on-year decrease attributable to a one-off dividend payment by SIX Group in 2015.
Firm cost control; operating profit of CHF 383m
Operating expenses were down 1% to CHF 509m. Personnel costs were flat at CHF 338m, while other operating expenses fell 4% to CHF 171m. Depreciation and amortization decreased 4% to CHF 72m, and other provisions and losses dropped 93% to CHF 3m. At CHF 383m, operating profit was down 4% on 2015 but was up versus 2013 and 2014, attesting to the Group’s earnings stability.
Net profit of CHF 310m
Extraordinary income was CHF 7m, down CHF 22m on the 2015 figure, which included proceeds from the sale of the Bank’s stake in Swisscanto. Net profit came in at CHF 310m, down 8% from 2015 but higher than in 2013 and 2014.
Growth in the balance sheet
Total assets expanded 2% to CHF 44.1bn. Cash and cash equivalents, which mainly comprise SNB sight deposits, totaled CHF 7.5bn (+9%). Mortgage lending rose 2%, or CHF 515m, to CHF 25.0bn. Other loans fell 2% to CHF 4.8bn as part of the Bank’s treasury management activities.
On the liabilities side, customer savings and investment accounts grew further, rising 1%, or CHF 368m, to CHF 29.2bn.
Continued new fund inflows
The Group’s assets under management decreased 3% to CHF 85.4bn as a result of the transfer of assets managed by Swisscanto following its acquisition by ZKB. Net new money totaled CHF 2.3bn, with an inflow of onshore funds (+CHF 3.3bn) offsetting the expected outflow of offshore funds (-CHF 1.0bn).
Solid financial position
The Bank’s CET1 capital ratio stands at 16.8% and shareholders’ equity amounted to CHF 3.4bn at end-2016, attesting to BCV's financial solidity. Standard & Poor's and Moody's reaffirmed their respective AA and Aa2 ratings for BCV, both with a stable outlook.
Key events in 2016
Peter Ochsner appointed to Board of Directors
Peter Ochsner took up his position on BCV's Board of Directors on 1 July 2016. Mr. Ochsner, who was appointed by the Vaud Cantonal Government, gained extensive experience in corporate auditing primarily at PricewaterhouseCoopers S.A. and has deep knowledge of the banking sector. He took the reins from his predecessor, Stephan A.J. Bachmann, as Chair of the Audit and Risk Committee.
Jack Clemons appointed to Board of Directors
At the Annual General Meeting on 21 April 2016, shareholders approved Jack Clemons’ appointment to BCV’s Board of Directors for a four-year term of office. Mr. Clemons, who succeeded Pierre Lamunière, lives in Arzier, Vaud, and is a dual citizen of the UK and Switzerland. After working in auditing as a partner at Deloitte, he went on to hold managerial positions in the consumer goods and retail sectors, most notably as the CEO of a multinational until 2015.
New head of the Business Support Division
BCV’s Board of Directors appointed Christian Meixenberger to the Bank’s Executive Board as head of the Business Support Division. Mr. Meixenberger holds an engineering degree and has broad expertise in banking technology and back-office operations. Prior to joining BCV, he was a member of the Executive Board and head of the Services Division of Banque Cantonale de Fribourg. He took up his position on 1 January 2017, replacing Aimé Achard, who has retired.
Stakeholder in TWINT
BCV took a stake in the new company TWINT S.A., alongside Switzerland’s largest banks – UBS, Credit Suisse, Raiffeisen, Zürcher Kantonalbank and PostFinance – as well as financial infrastructure operator SIX. TWINT S.A. merges Swiss mobile payment systems Paymit and TWINT to provide a mobile payment solution specifically designed for the Swiss market. BCV’s decision to become a shareholder was in keeping with its strategic objective of achieving greater integration across its customer touch points and enhancing its digital banking services.
Proposed CHF 284m payout
At the next Annual Shareholders’ Meeting, the Board of Directors will propose an ordinary dividend of CHF 23 per share and a special distribution of CHF 10 per share out of paid-in reserves, in accordance with the Bank’s distribution policy. If these proposals are approved, BCV will return CHF 284m to its shareholders; the Canton of Vaud will receive CHF 190m in distributions together with CHF 57m in cantonal and municipal taxes for 2016, for a total of CHF 247m.
Barring a significant deterioration in the financial markets and/or the overall economic situation, FY 2017 results are expected to trend along the same lines as in prior years.
Lausanne, 16 February 2017
28 March Publication of the 2016 Annual Report (on www.bcv.ch)
27 April Annual Shareholders’ Meeting in Lausanne
2 May Ex-dividend date
3 May Dividend record date
4 May Dividend payment
17 August Half-year 2017 results
Christian Jacot-Descombes, Press Officer
Tel.: +41 79 816 99 30
Gregory Duong, Investor Relations
Tel.: +41 21 212 20 71
Note to editors:
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 text is authoritative.